Key Takeaways

• The Postal Service Health Benefits (PSHB) program officially replaces FEHB for USPS employees and annuitants starting January 1, 2025, and introduces some critical changes you need to prepare for.

• While PSHB retains many core features of FEHB, it comes with its own rules, especially regarding Medicare integration and prescription coverage, that can change how your health costs play out in retirement.

The Transition Timeline: What You Need to Know

The shift from the Federal Employees Health Benefits (FEHB) Program to the Postal Service Health Benefits (PSHB) Program is already in motion. As of January 1, 2025, all USPS employees and annuitants must be enrolled in a PSHB plan to maintain their health coverage. This transition is automatic for most but not passive in its consequences.

You received notification letters in 2024. If you didn’t actively select a new plan during the 2024 Open Season (which ran from November to December), you were auto-enrolled into a comparable PSHB plan. For many, that may work just fine. But for others, that auto-enrollment could mean higher costs or missed benefits.

If you’re a Postal retiree or family member eligible for Medicare, the PSHB program may require you to enroll in Medicare Part B, depending on your retirement date or age status as of January 1, 2025.

What’s Staying the Same?

Let’s start with what doesn’t change. PSHB is modeled closely after FEHB in structure and administration, and that means many elements will feel familiar:

• Same plan design process: PSHB plans are still OPM-approved.

• Payroll and annuity deductions: Your premium payments still come out of your paycheck or annuity.

• Federal contribution: The government continues to pay a large portion of your premium, covering around 70% on average.

• Eligibility rules: USPS employees, annuitants, and eligible family members remain covered, with no change in basic eligibility.

That said, even where the structure is similar, the details may not be. The shift to PSHB unlocks plan offerings that are exclusively for the Postal workforce. Some are better aligned with Medicare. Some have different cost structures. Some exclude things that were included under your previous plan.

What Improves Under PSHB?

PSHB introduces some enhancements that can benefit you if you understand and use them strategically.

1. Better Medicare Coordination

One of the most meaningful upgrades is the stronger alignment with Medicare. Many PSHB plans offer features such as:

• Part B premium reimbursements

• Waived deductibles for Medicare enrollees

• Lower copayments and coinsurance when Medicare is primary

These benefits can lead to real cost savings if you’re enrolled in both PSHB and Medicare Part B. But you only get them if you meet the program’s Medicare integration requirements.

2. Streamlined Drug Coverage for Medicare Enrollees

If you’re on Medicare, your PSHB prescription benefits now run through a Medicare Part D Employer Group Waiver Plan (EGWP). This gives you:

• An annual $2,000 out-of-pocket cap

• Access to expanded pharmacy networks

• Insulin cost limits and coverage for specialty drugs

These are upgrades over what many had under FEHB. However, if you opt out of the Medicare drug benefit, your PSHB plan will not provide any prescription coverage. Re-enrollment is limited.

3. Postal-Only Plan Designs

Because PSHB is exclusively for Postal employees and retirees, the plan offerings can be more targeted. For example, some plans tailor coverage to meet the needs of long-serving USPS workers and retirees, including:

• Simplified cost-sharing when using in-network providers

• Tiered service levels that reward Medicare enrollment

• Network adjustments that reflect Postal Service demographics

You might find that your PSHB plan covers services more efficiently or includes better cost control measures than what you had under FEHB.

What’s Changing That You Shouldn’t Ignore

1. Mandatory Medicare Part B for Some

Not everyone is required to enroll in Medicare Part B, but many are. You must enroll in Part B if:

• You’re a Postal annuitant eligible for Medicare,

• You turned 64 or younger as of January 1, 2025,

• You’re not exempt based on residency, VA/IHS eligibility, or specific retirement timing.

If you don’t enroll when required, you risk losing your PSHB coverage.

This is a significant departure from FEHB, which allowed more flexibility in whether to enroll in Medicare Part B. With PSHB, the integration is not optional for most new retirees.

2. Prescription Coverage Depends on Medicare Enrollment

Prescription coverage under PSHB for Medicare-eligible members is no longer built directly into your main plan. Instead, it comes through the EGWP Part D arrangement. This means:

• You must be enrolled in Medicare Part B to access the drug coverage.

• If you opt out of this coverage, there is no backup through PSHB.

• You can only re-enroll during limited special enrollment periods.

This is a sharp contrast to FEHB, where prescription benefits were more universally embedded.

3. New Enrollment Systems

Enrollment and account access for PSHB is now through:

• KeepingPosted.org for annuitants

• LiteBlue for current employees

These platforms have been updated to accommodate PSHB-specific tools and forms. While this streamlines some functions, it also requires learning a new interface and tracking new deadlines.

What Might Surprise You

1. Premium Contributions Have Shifted

You may notice your monthly contribution has increased, especially if you were auto-enrolled into a comparable PSHB plan without reviewing the options. Although the federal government still pays around 70% of the total premium, the portion you pay may be higher than before depending on plan changes.

Annuitants, for instance, now see average monthly premium shares around:

• Self Only: $241

• Self Plus One: $521

• Self and Family: $567

These figures reflect new cost-sharing structures and could surprise you if you didn’t actively compare plans during Open Season.

2. Coverage for Family Members

If you previously covered family members under a federal employee’s FEHB plan and that employee worked for USPS, your coverage may have changed. In most cases, you must now be enrolled in PSHB unless you’re covered under a non-postal family member’s FEHB plan.

Understanding how dependent coverage is handled in the PSHB structure is critical, especially for:

• Spouses

• Dependent children

• Adult children with disabilities

3. Limited Re-enrollment Windows

PSHB has stricter rules around re-enrollment, especially for those who decline Medicare drug coverage or disenroll. If you opt out and later change your mind, you may be stuck waiting until the next Open Season or risk lapses in coverage entirely.

Under FEHB, you had more flexibility to make changes as life events happened. Under PSHB, your enrollment decisions now carry longer-lasting consequences.

Getting Support with the Transition

This shift from FEHB to PSHB is a once-in-a-generation change for Postal workers and retirees. And like most large-scale benefit transitions, it comes with confusion, overlooked details, and potential financial consequences if you don’t understand what’s changing.

You should:

• Review your PSHB plan documents carefully

• Check if you are required to enroll in Medicare Part B

• Confirm that your prescription coverage is active

• Make sure your premium contributions match your plan selection

• Use KeepingPosted.org or LiteBlue to update preferences and contact info

If any of this feels unclear, you’re not alone. Many enrollees only discover the key details when they receive a bill or denial of service.

Why These Changes Deserve Your Attention Now

What might feel like a name change on paper has much deeper implications for your health costs and access. From Medicare Part B rules to how prescriptions are handled to how long you have to fix a missed enrollment, the PSHB program changes the retirement healthcare landscape for USPS workers in 2025.

To avoid unpleasant surprises, take the time to understand your current enrollment status and coverage details. Make sure your choices match your actual needs, especially if you are Medicare-eligible or close to retirement.

For support with reviewing your plan, comparing PSHB options, or getting clarity on Medicare Part B enrollment requirements, speak with a licensed agent listed on this website.