Key Takeaways

• The shift from FEHB to PSHB in 2025 is more than a name change. It introduces new rules, structures, and coordination requirements for health coverage specific to Postal Service employees and retirees.

• Medicare integration, premium contributions, and plan options all work differently under PSHB. Understanding these differences is essential to protect your coverage and costs.

Why the Shift to PSHB Happened

The Postal Service Reform Act of 2022 set this change in motion. As of January 1, 2025, all Postal Service employees, annuitants, and eligible family members are required to enroll in the Postal Service Health Benefits (PSHB) Program. This change ends participation in the Federal Employees Health Benefits (FEHB) Program for this group.

The reason? Lawmakers and postal leadership believed the USPS needed a tailored health benefits system that better aligned with its unique financial structure and workforce needs. With rising costs and a distinct employee demographic, the PSHB aims to manage long-term liabilities while offering stable, competitive health benefits.

What Makes PSHB Different From FEHB

Although the PSHB is administered by the U.S. Office of Personnel Management (OPM), just like FEHB, the structure, requirements, and costs of PSHB plans can differ significantly. Here are some of the most notable changes:

1. Separate Risk Pool

PSHB is now a completely separate risk pool from FEHB. That means premiums are determined based solely on the claims experience of the Postal population. In FEHB, Postal employees were part of a larger federal risk pool.

This separation means:

• Premiums may rise or fall based on the Postal-only experience.

• Cost-sharing structures may evolve independently of FEHB trends.

• Plan availability may change based on how carriers assess risk in the Postal population.

2. Medicare Part B Requirement

If you are a Medicare-eligible Postal Service annuitant or family member, you are now required to enroll in Medicare Part B to maintain PSHB coverage, unless you qualify for one of the official exemptions.

This new mandate applies to:

• Medicare-eligible annuitants and eligible family members retiring after January 1, 2025.

• Those who were under age 64 as of January 1, 2025, and later become Medicare-eligible.

Exemptions exist if you retired on or before January 1, 2025, were age 64 or older at that time, or qualify due to overseas residence or VA/Indian Health Service benefits.

The coordination between PSHB and Medicare Part B reduces cost-sharing, but it adds an extra monthly expense for those who weren’t previously enrolled.

3. Part D Integration for Prescription Drugs

Postal annuitants and eligible family members who are enrolled in both PSHB and Medicare will automatically receive prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP).

Key features include:

• A $2,000 annual out-of-pocket cap for prescription drugs in 2025.

• A $35 monthly cap on insulin.

• Wider pharmacy access.

If you opt out of Part D, you risk losing drug coverage under PSHB. Re-enrollment opportunities are extremely limited.

4. PSHB Enrollment Process

You no longer use the same FEHB platform for enrollment. USPS employees enroll through LiteBlue, while Postal retirees and annuitants use KeepingPosted.org.

Each year, Open Season runs from November to December, and that is the only time you can:

• Switch PSHB plans

• Add or remove dependents

• Update your coverage (unless you experience a qualifying life event)

5. Premium Contributions

Your share of premiums under PSHB is determined using a formula similar to FEHB, but the actual cost you pay can differ:

• Annuitants now face a weighted average monthly premium of about $241 for Self Only, $521 for Self Plus One, and $567 for Self and Family.

• Employees contribute a different share, with weighted monthly premiums around $861 for Self Only and over $2,000 for family coverage.

The government still covers about 72% of the total cost, but due to the PSHB-only risk pool, costs can diverge from FEHB plans.

What You Need to Do Now

Transitioning to PSHB isn’t automatic for all situations. Here’s what you should be doing now:

Confirm Your Enrollment

If you were already enrolled in FEHB as a Postal employee or annuitant in 2024, you were automatically transitioned to a comparable PSHB plan on January 1, 2025. But this only applies if:

• Your coverage was active in December 2024

• Your eligibility remained unchanged

You should still verify your new plan details and confirm your enrollment in your respective system (LiteBlue or KeepingPosted.org).

Enroll in Medicare Part B (If Required)

If you are Medicare-eligible and required to enroll in Part B under PSHB rules, you should already have completed this step. However, if you delayed or missed enrollment, limited special enrollment windows may apply.

Failure to enroll when required can lead to:

• Loss of PSHB eligibility

• Loss of drug coverage

• Higher out-of-pocket costs for services

Review Plan Benefits During Open Season

Even though many PSHB plans have similar names to their FEHB predecessors, the actual coverage terms, deductibles, coinsurance, and copayments may differ.

You should review:

• In-network vs. out-of-network cost sharing

• Annual deductibles ($350–$500 for low-deductible PSHB plans)

• Out-of-pocket maximums (up to $7,500 for individuals)

• Specialist and ER copayments

Small changes in plan details can mean large changes in your healthcare bills.

Medicare Coordination Under PSHB

When you’re enrolled in both PSHB and Medicare Parts A and B, you gain access to:

• Waived or reduced deductibles

• Lower copayments for hospital and outpatient services

• Enhanced prescription drug benefits

Many PSHB plans also offer Part B premium incentives. These may come in the form of partial reimbursement or lower monthly costs. However, each plan has its own rules, and the benefit is not guaranteed.

You cannot assume your costs will go down just because you enroll in Medicare. You must compare PSHB plans to see which offer the best integration features.

What Hasn’t Changed With the PSHB Transition

Despite the many new rules and structures, several aspects of your coverage remain familiar:

• The OPM still oversees plan administration.

• You still choose from a menu of available plans during Open Season.

• You retain access to national and regional options.

• You may still cover eligible spouses, children, and survivors.

FEDVIP (for dental and vision), FEGLI (life insurance), and FSAFEDS (flexible spending) are not affected by the PSHB change.

Key Dates to Keep in Mind

• January 1, 2025: PSHB coverage officially replaced FEHB for USPS employees and annuitants.

• Open Season (Annually, November–December): The only time to make changes unless you qualify for a special enrollment.

• April 1 to September 30, 2024: Special Medicare Part B enrollment period (already passed).

Missing these timelines can result in penalties, lapses in coverage, or fewer plan options in the future.

Common Questions You Might Still Have

Will I lose coverage if I don’t enroll in Medicare Part B?

If you are required to enroll in Part B and don’t, you may lose PSHB medical and drug coverage. There are exemptions, but they are very limited and must be approved.

Do PSHB plans still offer nationwide networks?

Yes, some PSHB plans offer national networks, but others are regionally focused. Review each plan’s provider directory to see what applies to you.

What happens to my spouse’s FEHB coverage if I move to PSHB?

If your spouse is a federal employee and not part of USPS, they may remain in FEHB. You must decide whether to stay on their plan (if eligible) or enroll separately in PSHB.

A New Era of Postal Healthcare Requires Your Attention

The transition from FEHB to PSHB is not just a routine policy update. It represents a complete restructuring of how your healthcare coverage is delivered, funded, and coordinated with Medicare.

If you haven’t reviewed your PSHB plan documents, Medicare requirements, or enrollment platform yet, now is the time. Getting this wrong could mean higher premiums, denied claims, or even loss of coverage.

For help evaluating your PSHB options or confirming your eligibility under new Medicare rules, get in touch with a licensed agent listed on this website.