Key Takeaways

• While the Postal Service Health Benefits (PSHB) program looks similar to the Federal Employees Health Benefits (FEHB) program, it introduces changes that affect both current USPS employees and annuitants in significant ways.

• The biggest distinctions appear in Medicare integration, enrollment requirements, and how out-of-pocket costs can shift—especially when you hit certain milestones like age 65.

What Appears Familiar—But Isn’t Identical

At a glance, PSHB might look like a clone of FEHB. The structure of the plan types, the categories of enrollment (Self Only, Self Plus One, Self and Family), and government contribution percentages might seem familiar. However, that familiarity is only surface deep.

Similar Structure, Different Foundation

While PSHB inherits much of FEHB’s framework, it was built to be a standalone program specifically for Postal Service employees and annuitants. In 2025, it replaces FEHB for the entire USPS population, creating its own ecosystem of health plans, rules, and Medicare coordination.

• Enrollment options are similar but operate under a distinct program code.

• The PSHB premiums are separate from FEHB, even if plan names appear the same.

• PSHB includes its own prescription drug coverage arrangements.

This separation means that postal employees and retirees now operate within an entirely different benefits world—one that has its own rules and expectations.

Medicare Enrollment Isn’t Just Optional Anymore

One of the most impactful changes that differentiates PSHB from FEHB is how it treats Medicare Part B enrollment.

Mandatory Medicare Part B for Many

Starting in 2025, many postal annuitants and eligible family members must enroll in Medicare Part B to maintain their PSHB coverage. Specifically:

• If you’re Medicare-eligible and retired after January 1, 2025, you must enroll in Medicare Part B.

• If you were already retired before January 1, 2025, you’re exempt from this rule.

• If you are age 64 or older as of January 1, 2025, you are also exempt.

Failing to enroll in Part B when required means losing your PSHB coverage entirely.

This is a sharp contrast to FEHB, where Medicare enrollment has always been optional. Many annuitants under FEHB delay or skip Part B to avoid the additional monthly premium. Under PSHB, that choice disappears for many.

Coordination with Medicare Actually Matters More Now

If you’re already on Medicare or about to be, the way PSHB coordinates with it brings some benefits—but also new dependencies.

Enhanced Integration (If You Enroll in Medicare Part B)

PSHB plans in 2025 are designed to work in tandem with Medicare Parts A and B:

• Some PSHB plans waive deductibles and reduce copayments when Medicare is primary.

• Most offer lower coinsurance when services are billed through Medicare first.

• Prescription coverage under PSHB is linked to Medicare Part D through a special plan structure.

You’ll likely see better cost-sharing once Medicare is your primary coverage, but this only works if you actually enroll in Part B.

EGWP-Based Drug Coverage

All PSHB plans include Part D drug coverage through an Employer Group Waiver Plan (EGWP). This eliminates the need to separately enroll in a private Part D plan and ensures integrated pharmacy benefits. It also introduces a $2,000 out-of-pocket cap in 2025, thanks to the redesign of Medicare Part D.

However, if you decline Part D or opt out of EGWP drug coverage, you may lose your prescription benefits entirely under PSHB. That’s not something FEHB plans ever enforced.

Out-of-Pocket Costs Look the Same—Until You Look Closer

Both FEHB and PSHB plans include deductibles, coinsurance, and copayments, but the numbers and thresholds vary in subtle but meaningful ways.

Deductibles Can Be Steeper

Some PSHB plan deductibles—especially for high-deductible options—run higher than their FEHB counterparts. For example:

• In-network deductibles range from around $350 to $2,000.

• Out-of-network deductibles may reach $3,000 or more.

This structure means you might face higher initial costs before coverage kicks in.

Copayments for Everyday Services

Copayments under PSHB plans are generally in line with standard FEHB ranges:

• $20 to $40 for primary care

• $30 to $60 for specialists

• $100 to $150 for emergency care

However, PSHB plans often include additional tiers or service limits tied to Medicare coordination. Some cost-sharing benefits only activate if you’re enrolled in both PSHB and Medicare.

Maximum Out-of-Pocket Limits

Out-of-pocket maximums under PSHB are also more rigidly defined:

• $7,500 for Self Only

• $15,000 for Self Plus One and Self & Family

While this protects you from runaway costs, it also sets a higher cap than some of the most generous FEHB plans used to offer. If you have a year with heavy medical needs, it could be more expensive than you’re used to.

You’re Automatically Enrolled—But That Doesn’t Mean You Shouldn’t Check

In the fall of 2024, current FEHB enrollees who were postal employees or annuitants were automatically transitioned into a comparable PSHB plan. While this sounds convenient, it may leave you with a plan that doesn’t actually suit your evolving needs.

Why You Need to Review Your Plan

• You may have been defaulted into a plan that isn’t your first choice.

• Plan networks and covered services may differ under PSHB even if the name seems the same.

• Some plans may have stronger Medicare coordination benefits than others.

If you’re not proactive, you could end up with higher costs, fewer providers, or benefits that don’t match your needs—especially if your health changes or you’re entering Medicare eligibility soon.

There’s No More Mixing With Non-Postal Enrollees

One key operational shift: PSHB plans only serve Postal Service employees, retirees, and their families. You no longer share risk pools with the broader federal employee population.

What This Means for You

• Premiums are calculated based solely on the USPS population.

• There’s potential for more USPS-focused offerings, but also less insulation from premium hikes if health costs in the Postal population rise.

Under FEHB, your plan pool included millions of federal workers. Under PSHB, the pool is smaller, and the experience of postal employees carries more weight in cost-setting.

Vision and Dental? Still Through FEDVIP

If you’re wondering about your dental and vision coverage—those benefits didn’t move. Postal employees and annuitants continue to get their vision and dental through the Federal Employees Dental and Vision Insurance Program (FEDVIP).

• FEDVIP is unchanged by the PSHB transition.

• You enroll or make changes during the same Open Season.

It’s a separate enrollment from PSHB, and nothing about this changed in 2025. But it’s easy to overlook while focusing on the PSHB switch.

Transition Periods Are Over—This Is Now the Default

The implementation phase is done. As of January 1, 2025, PSHB is fully live. All Postal Service employees and annuitants are now under this program.

• You can no longer enroll in FEHB plans unless you are covered as a dependent under someone else’s federal employment.

• PSHB is now the permanent health benefits system for USPS employees and retirees.

If you haven’t reviewed your PSHB plan or compared it to other available options, this is the time to do it. Waiting until the next Open Season could cost you hundreds—or even thousands—in avoidable expenses.

You’re in a New System Now—Make Sure You Act Like It

Even if you were automatically moved into a PSHB plan, the responsibility to manage your coverage is entirely on you. That means:

• Reviewing how your plan works with Medicare

• Comparing premiums and out-of-pocket costs

• Understanding what you’re actually paying monthly

• Reassessing during each Open Season

This isn’t the same as FEHB, even if the plan names are familiar. Make time now to evaluate your situation and be ready to adjust.

Stay Informed, Stay Protected

Now that PSHB is your health benefits system, understanding how it works is essential to protecting your financial and health future. From mandatory Medicare enrollment to adjusted cost-sharing, the changes may be more impactful than they first appear. Be proactive, stay informed, and make use of Open Season reviews every year.

To learn more about how your plan compares or to explore whether your current coverage is still right for you, speak with a licensed insurance agent listed on this website.