Key Takeaways

• Being a Postal Service employee or annuitant doesn’t guarantee you’re eligible for PSHB coverage in 2025. Several lesser-known rules and exceptions could delay or prevent your enrollment.

• Eligibility can depend on retirement date, Medicare Part B enrollment status, and the type of family coverage you’ve had—details that must be verified before assuming you’re automatically covered.

Who’s Expected to Transition to PSHB in 2025

The Postal Service Health Benefits (PSHB) Program officially replaces FEHB for postal employees and retirees starting January 1, 2025. The U.S. Office of Personnel Management (OPM) made it clear that the switch affects:

• All current career USPS employees

• All USPS annuitants

• Eligible family members covered under a USPS enrollee

If you’re in one of these groups, you may assume that means you’re set. But assuming you’re covered without reviewing the finer rules may leave you without health benefits or with the wrong type of coverage.

Enrollment Isn’t Always Automatic

You will not be automatically enrolled in PSHB unless you were enrolled in FEHB as of December 31, 2024. Even then, the auto-enrollment only places you into a corresponding PSHB plan from your FEHB carrier. You still need to:

• Verify your enrollment type (Self Only, Self Plus One, or Self and Family)

• Confirm that all eligible family members are properly listed

• Make plan changes during the Open Season if your assigned plan no longer meets your needs

And if you were not enrolled in FEHB prior to 2025, you are not automatically enrolled in PSHB. You’ll have to enroll during Open Season or through a Qualifying Life Event (QLE).

Retirement Date Plays a Major Role

If you are already retired or planning to retire soon, your retirement date affects your PSHB eligibility, especially when it comes to Medicare integration.

• If you retired on or before January 1, 2025, and you’re not enrolled in Medicare Part B, you are not required to enroll in it to keep your PSHB coverage.

• If you retire after January 1, 2025, and you are eligible for Medicare Part B, then you must enroll in Medicare Part B to remain eligible for PSHB benefits.

Failing to enroll in Medicare Part B could result in loss of drug coverage and higher out-of-pocket costs.

Medicare Eligibility Also Triggers Extra Requirements

Many annuitants wrongly assume that turning 65 automatically aligns them with PSHB Medicare integration. That’s not how it works.

If you’re a Medicare-eligible Postal Service annuitant or family member and:

• You are not yet enrolled in Medicare Part B,

• You retired after January 1, 2025,

• You were under age 64 as of January 1, 2025,

then you must enroll in Medicare Part B or risk losing critical parts of your PSHB coverage, including integrated pharmacy benefits.

Even if you’re already enrolled in a PSHB plan, your benefits could be downgraded if you fail to comply with this rule. Many plans offer enhanced coordination with Medicare Part B, but that only applies when you’re actively enrolled in both.

Spouses and Dependents May Not Automatically Qualify

Coverage for family members depends heavily on how you’ve been enrolled previously and whether they meet the PSHB criteria.

Eligible family members include:

• Your spouse

• Children under age 26

• Adult children incapable of self-support due to a disability (with proof)

However, former spouses are not eligible for PSHB—even if they were covered under your FEHB family plan previously. Similarly, family members who don’t meet the PSHB criteria must secure coverage elsewhere.

If your current dependent structure is based on a former marriage, stepchildren, or legal guardianship, you’ll need to verify each dependent’s eligibility through official channels.

Dual Federal and Postal Coverage Creates Confusion

If you are a federal employee married to a postal employee—or vice versa—there are special rules.

• Only one of you can be the primary enrollee in a PSHB plan.

• The PSHB plan will replace the FEHB plan for the postal enrollee.

• The non-postal spouse must decide whether to continue FEHB separately or join the PSHB plan under family coverage.

Coordination between dual federal households must be done carefully. Mistakes in primary designation could leave one spouse without full coverage.

Overseas Residents Have Limited Flexibility

If you live outside the U.S., your Medicare requirements may differ. In 2025, PSHB recognizes that some annuitants and family members permanently residing abroad may not enroll in Medicare Part B due to eligibility issues or lack of access.

You may qualify for an exemption only if you meet all the following:

• You retired on or before January 1, 2025

• You reside permanently outside the United States

• You’re not enrolled in Medicare Part B

If you later return to the U.S., you must enroll in Medicare Part B to continue full PSHB benefits.

Opting Out of Medicare Part D EGWP Has Serious Consequences

Many PSHB plans integrate their pharmacy benefits with a Medicare Part D Employer Group Waiver Plan (EGWP). If you’re eligible but choose to opt out of this feature:

• You may lose prescription drug coverage under PSHB

• You may face late enrollment penalties if you try to join Medicare Part D later

• Re-enrollment into the integrated pharmacy plan may be restricted

This is especially important in 2025, as the Part D out-of-pocket maximum is capped at $2,000—a significant cost-saving feature for those on high-cost medications. Opting out forfeits this benefit.

What Happens During Open Season Matters More Than Ever

The annual Open Season, which runs from November to December, is now your main opportunity to:

• Make corrections to your dependent information

• Elect a new PSHB plan

• Switch from Self Only to Self Plus One or Self and Family

• Confirm Medicare integration features if applicable

Outside of this window, you can only make changes if you experience a Qualifying Life Event (QLE), such as marriage, divorce, birth of a child, or loss of other coverage.

Don’t ignore Open Season just because you’re already in a plan. Any errors or overlooked eligibility details may lead to significant coverage issues the following year.

Retirees Must Monitor Premium Contributions Closely

Being a PSHB annuitant in 2025 means you now pay monthly premiums for your share of the plan. These are different from the biweekly payroll deductions used when you were actively employed.

Your premiums depend on your plan choice and enrollment type:

• Self Only

• Self Plus One

• Self and Family

While the government continues to pay roughly 70% of the premium, your share can still be significant. It’s important to verify that your payment method is set up through your retirement annuity and that you budget accordingly.

Missed payments or lapses could result in involuntary disenrollment.

The Transition to PSHB Isn’t Retroactive

The PSHB program begins January 1, 2025. If you didn’t have FEHB coverage before then, you won’t be retroactively added to a PSHB plan. This means:

• No backdating of benefits

• No retroactive premiums

• No recovery of past medical costs under a PSHB plan

You must enroll proactively and timely. If you miss the window, you’ll have to wait for the next Open Season or a QLE.

Last-Minute Surprises Can Jeopardize Your Healthcare

Even if you’ve been a USPS career employee for decades, eligibility is no longer just about tenure or job title. These extra rules in 2025 are catching many off guard. Be especially cautious if:

• You’re approaching retirement soon

• You’re turning 65 this year

• You’re covering adult dependents

• You’re relying on Medicare without confirming Part B enrollment

Carefully review OPM materials, use the PSHB Navigator, and speak with a licensed agent listed on this website to confirm your status.

Stay Proactive About Your Eligibility

Health coverage through PSHB isn’t something you can afford to assume. In 2025, eligibility is shaped by your retirement timing, Medicare decisions, dependent status, and how you handled your previous FEHB coverage.

Start early. Document everything. And seek advice if you’re unsure. Mistakes in enrollment or assumptions about eligibility can lead to denied claims and higher costs down the line.

If you’re uncertain about your specific situation, get in touch with a licensed agent listed on this website who can walk you through the eligibility process and help you make informed choices.