Key Takeaways

• The transition from FEHB to PSHB for Postal Service employees and retirees introduces key structural changes that affect premiums, Medicare coordination, and enrollment procedures.

• While many plan features appear similar at first glance, the PSHB system introduces new requirements and cost dynamics that you should fully understand before the next Open Season.

Why This Change Is More Than Cosmetic

The shift from the Federal Employees Health Benefits (FEHB) Program to the Postal Service Health Benefits (PSHB) Program in 2025 isn’t just a renaming effort. It fundamentally changes how your healthcare coverage is administered, particularly if you’re a current or retired Postal Service employee. While much of the structure appears familiar, critical differences impact your premium responsibilities, Medicare requirements, and drug coverage.

If you retired before January 1, 2025, or are turning 64 during 2024, you might have specific exemptions. But for everyone else, PSHB is now the new standard.

Origins of the Transition

The PSHB program was created under the Postal Service Reform Act of 2022 and officially takes effect January 1, 2025. The goal was to provide Postal Service employees with a separate healthcare pool from the broader FEHB group, which primarily serves federal employees.

This move allows USPS to better control costs and modernize its long-term healthcare obligations, particularly by aligning more retirees with Medicare Part B. However, these structural benefits to the USPS can result in new responsibilities for you.

Separate Risk Pools, Separate Rules

FEHB used to group Postal Service participants with all other federal employees and retirees. PSHB pulls them into a distinct pool. This change directly affects:

• Premium calculation: Your premiums are now based on the claims and costs of only PSHB participants.

• Plan design: While plans may look like their FEHB counterparts, PSHB offerings can diverge in benefits, provider networks, and cost-sharing.

• Government contributions: The federal government still covers roughly 70% of premiums on average, but the total premium amounts are now calculated independently for the PSHB pool.

This means the rates and benefits you saw under FEHB may not carry over exactly. Review your PSHB plan documents closely.

New Medicare Part B Requirements

This is one of the most consequential changes.

If you are a Medicare-eligible annuitant or a covered family member, you are now required to enroll in Medicare Part B in order to maintain full PSHB benefits. Exceptions are limited and include:

• Retiring on or before January 1, 2025

• Being age 64 or older as of January 1, 2025

• Residing overseas

• Having VA or Indian Health Service eligibility

Failing to enroll in Part B when required could lead to:

• Loss of full PSHB coverage

• Significant gaps in benefits

• Penalties if you try to enroll later without qualifying for a Special Enrollment Period

Integrated Prescription Drug Coverage

Under PSHB, Medicare-eligible enrollees automatically receive integrated drug coverage through an Employer Group Waiver Plan (EGWP) under Medicare Part D.

Key benefits include:

• An annual out-of-pocket cap of $2,000 for covered prescription drugs

• $35 monthly cap for insulin

• A broader network of participating pharmacies

If you opt out of this drug coverage, you may lose prescription benefits entirely unless you have other creditable coverage.

Coordination of Benefits Is Different

Under FEHB, many retirees chose to keep their plan as primary and use Medicare as secondary. In PSHB, that structure often flips. Plans are designed to work with Medicare Part B as primary coverage.

This impacts how:

• Deductibles apply

• Copayments are reduced or waived

• Coinsurance is calculated

If you’re enrolled in both PSHB and Medicare Part B, you may see lower out-of-pocket costs for many services. But if you’re only enrolled in PSHB without Part B when required, your cost-sharing could be significantly higher.

Automatic Enrollment for Current Participants

If you had FEHB coverage in 2024 and are still eligible, you are automatically enrolled in a comparable PSHB plan for 2025. You’ll receive a notification about your assigned plan prior to Open Season.

However, it’s critical to:

• Review your plan’s 2025 PSHB brochure

• Compare deductibles, copays, coinsurance, and drug tiers

• Make a change during Open Season if the assigned plan does not meet your needs

Open Season Enrollment and Changes

The PSHB Open Season occurs from November to December each year, just like FEHB. During this time, you can:

• Enroll in a PSHB plan for the first time

• Change plans

• Add or remove eligible family members

Outside of Open Season, changes are only allowed under Qualifying Life Events (QLEs), such as marriage, divorce, or birth of a child.

Deductibles and Out-of-Pocket Maximums

Under PSHB, there is a broader range of plan types, including low-deductible, high-deductible, and Consumer-Driven Health Plans (CDHPs). While some deductibles may seem modest at first glance, always assess them in relation to:

• Specialist copays

• Urgent care and ER fees

• Out-of-network penalties

Typical in-network deductibles under PSHB plans:

• Low-deductible plans: $350 to $500

• High-deductible plans: $1,500 to $2,000

Out-of-pocket maximums:

• Self Only: Up to $7,500

• Self Plus One/Family: Up to $15,000

These limits reset annually, so your spending may vary each year depending on plan utilization.

Coinsurance and Copay Differences

Even if premiums seem stable, PSHB plans have updated cost-sharing details:

• Primary care: Copays range from $20 to $40

• Specialists: Typically $30 to $60

• Urgent care: Around $50 to $75

• Emergency rooms: $100 to $150 per visit

• Out-of-network coinsurance: Often 40% to 50%

Be sure to understand whether the provider you want to see is in-network. Out-of-network costs can add up quickly.

FEDVIP and Other Benefits Still Apply

The PSHB transition does not impact your access to:

• FEDVIP dental and vision plans

• FEGLI life insurance coverage

• FSAFEDS flexible spending accounts

• FLTCIP long-term care insurance

You still enroll in these programs separately and keep them regardless of PSHB enrollment.

Where to Get Help

This transition introduces a lot of moving parts. Fortunately, you have several resources:

• LiteBlue for employees

• KeepingPosted.org for annuitants

• PSHB Navigator Help Line: 1-833-712-7742

In addition, a licensed agent listed on this website can help you review plan brochures, clarify Medicare integration rules, and guide your decision-making.

What This Means for Your Healthcare Planning

You may have assumed that moving from FEHB to PSHB would be seamless. But as you’ve seen, the rules, requirements, and structure of PSHB plans make it a distinct program that warrants close review.

Whether you’re planning for retirement, already Medicare-eligible, or evaluating how these changes affect your family’s coverage, you can’t afford to treat PSHB like just another version of FEHB.

Take the time to:

• Confirm if you’re required to enroll in Medicare Part B

• Understand how your plan integrates with Medicare

• Review Open Season materials carefully

• Assess annual costs, not just monthly premiums

For plan comparisons, policy details, and one-on-one help, reach out to a licensed agent listed on this website.