Key Takeaways

• The shift from the Federal Employees Health Benefits (FEHB) Program to the Postal Service Health Benefits (PSHB) Program in 2025 isn’t just administrative. It directly affects your premiums, deductibles, Medicare requirements, and long-term coverage choices.

• If you’re not actively reviewing your PSHB plan and how it interacts with Medicare Part B, you risk paying more or losing key coverage.

A Change in Structure, Not Just a Name

On the surface, PSHB may look like a straightforward replacement for FEHB. But beneath the surface, it functions differently—especially for annuitants and Medicare-eligible enrollees.

Since January 1, 2025, all Postal Service employees and retirees must enroll in a PSHB plan to maintain their health insurance. This change is part of the 2022 Postal Service Reform Act, which created a separate risk pool for USPS participants. The goal? Control costs and modernize benefits. But for you, it introduces new layers of choice and responsibility.

Medicare Enrollment Is Now More Than a Choice

The most significant policy change for annuitants is the Medicare Part B requirement. If you’re a Medicare-eligible Postal retiree or family member, you now must enroll in Medicare Part B to stay fully covered under a PSHB plan. There are a few narrow exemptions:

• You retired on or before January 1, 2025 and are not already enrolled in Part B.

• You were an active Postal employee aged 64 or older as of January 1, 2025.

• You live abroad or receive benefits from the VA or Indian Health Services.

This new rule makes Medicare Part B integration a key component of your PSHB coverage, unlike FEHB where Part B enrollment was optional.

Prescription Drug Coverage Is No Longer Optional Either

Starting in 2025, Medicare-eligible Postal retirees and family members who enroll in PSHB are automatically enrolled in a Medicare Part D prescription drug plan called an Employer Group Waiver Plan (EGWP). You can opt out of this coverage, but doing so means you lose all drug benefits through your PSHB plan and won’t be able to re-enroll later unless a Special Enrollment Period opens.

The new structure includes:

• A $2,000 annual cap on out-of-pocket prescription costs

• Access to a broader pharmacy network

• Lower costs when paired with Medicare Part B

This is a major difference from FEHB, where prescription drug coverage was included in the same plan and did not involve a separate Medicare contract.

Open Season Is Still in Play, But the Stakes Are Higher

You still get an annual Open Season from November to December, just like under FEHB. During this time, you can change your PSHB plan or coverage type. However, the transition rules mean you were automatically enrolled in a corresponding PSHB plan unless you actively chose a different one during the 2024 Open Season.

That automatic enrollment may not be the best fit for your situation. For example:

• Your new PSHB plan may have different in-network providers

• Cost-sharing (like copays and deductibles) may not match what you’re used to

• Your Medicare enrollment status could change how much you owe monthly

You should revisit your plan annually and not assume that what carried over still works for you.

New Cost-Sharing Rules You Can’t Afford to Ignore

Cost-sharing under PSHB plans often looks familiar—but it isn’t identical. You may encounter:

• Copayments ranging from $20 to $150 depending on care type

• Coinsurance rates up to 50% for out-of-network services

• Deductibles between $350 and $2,000 depending on plan type

• Out-of-pocket maximums up to $15,000 for family plans

These figures can look deceptively similar to what you had under FEHB, but the shift in how they apply can make a big difference. Some plans waive deductibles entirely for Medicare-integrated enrollees, while others do not. You need to verify that based on your personal situation.

The Government Still Pays Most of the Premium—But Not All of It

Just like FEHB, the government covers roughly 70% of the total premium under PSHB. But because the Postal Service is now part of a separate pool, premium levels may diverge more sharply from those in other federal plans.

For example, monthly contributions for annuitants in 2025 average:

• $241 for Self Only

• $521 for Self Plus One

• $567 for Self and Family

While those averages remain manageable for many, they’re increasing more than they did under FEHB. And if you’re not enrolled in Medicare Part B, some plans will not cover certain services—meaning you may pay out-of-pocket despite having insurance.

Retiree Protections Still Exist, But They’re Narrower Now

FEHB allowed you to maintain lifelong coverage as long as you kept up premium payments and elected a survivor benefit if needed. That structure still exists under PSHB. However, the requirement to enroll in Medicare Part B for most retirees adds a permanent layer of eligibility maintenance.

This means:

• If you fail to enroll in Medicare Part B when required, you could lose full coverage under your PSHB plan.

• If you drop Part B later, your plan may limit or deny benefits.

• Opting out of Medicare Part D EGWP also carries long-term consequences.

Your eligibility and cost protections now depend on staying enrolled in multiple programs, not just one.

The Role of Medicare in Your Costs Has Shifted

Before 2025, Medicare Part B enrollment could reduce your FEHB plan’s out-of-pocket costs, but it wasn’t required. Under PSHB, not only is it required for most retirees, but many plans coordinate with Medicare to reduce your actual expenses.

Some PSHB plans:

• Waive deductibles when paired with Medicare

• Offer Part B premium reimbursements

• Have lower copays and coinsurance when you show Medicare primary status

This means your total health care costs now depend on how well your PSHB plan integrates with Medicare—and whether you’ve kept your Medicare enrollment up to date.

Enrollment Timing and Your Rights

Your ability to change plans or correct mistakes hasn’t disappeared. But PSHB has new enrollment timelines and rules:

• Annual Open Season: Occurs each November to December, just like FEHB.

• Qualifying Life Events (QLEs): Still allow mid-year changes (marriage, retirement, etc.).

• Special Enrollment Period (SEP) for Part B: Ran from April to September 2024 for those who had delayed Part B and now need it.

If you missed your SEP window, you may be subject to late enrollment penalties and delays in coverage. Unlike FEHB, you can’t rely on flexibility to correct oversights after the fact.

Dental and Vision Coverage Remain Separate

FEDVIP dental and vision coverage is still available to Postal employees and retirees under PSHB, but it is not integrated into your PSHB health plan. You must enroll separately and pay separate premiums.

Also:

• Former spouses are not eligible for FEDVIP under divorce unless they qualify independently.

• Premiums for FEDVIP continue to rise with age and enrollment tier.

This separation of coverage remains one of the few constants from FEHB.

What It Means for Your Future Planning

The FEHB to PSHB transition may have already happened on paper. But the real consequences show up in your wallet, your access to care, and your ability to stay enrolled in both PSHB and Medicare without gaps.

If you haven’t taken the time to:

• Review your current PSHB plan’s coordination with Medicare

• Compare deductible and cost-sharing structures

• Confirm your automatic enrollment still fits your needs

• Understand the new rules around Medicare Part B and Part D

…then you’re at higher risk of overpaying or falling into a coverage gap.

Preparing Yourself for What Comes Next

The shift from FEHB to PSHB is a structural change with ripple effects that touch every part of your health benefits. It’s not enough to assume continuity. What worked for you in 2024 might no longer work in 2025.

You need to reevaluate your coverage annually, track your Medicare status closely, and be proactive about plan selection. Getting in touch with a licensed agent listed on the website can help you sort through options, verify your Medicare alignment, and make sure you’re in a PSHB plan that suits your evolving needs.