Key Takeaways

  • The Postal Service Health Benefits (PSHB) program in 2025 replaces your former FEHB plan but does not mirror it exactly. Several critical changes affect premiums, Medicare integration, and prescription drug coverage.

  • Your participation in PSHB may come with new obligations, including mandatory Medicare Part B enrollment for some retirees, as well as automatic enrollment in a Medicare drug plan unless you opt out, with consequences.

The Shift from FEHB to PSHB: Why It Matters in 2025

If you’ve been covered under the Federal Employees Health Benefits (FEHB) Program, the arrival of the Postal Service Health Benefits (PSHB) Program in 2025 isn’t just a name change. It’s a policy shift with real impact on what benefits you get, how much you pay, and what’s expected of you as a postal employee or retiree.

The change affects all Postal Service employees and annuitants. If you are retired or retiring soon, the details of this transition could affect your coverage, your monthly budget, and your access to care.

What Is the PSHB Program?

The PSHB Program is a new, separate health benefits system established under the Postal Service Reform Act of 2022. It officially replaces your FEHB coverage as of January 1, 2025.

This change applies to:

  • All Postal Service employees and annuitants,

  • Covered family members, including spouses and children,

  • Survivors receiving annuitant benefits.

You now must enroll in a PSHB plan instead of a traditional FEHB plan during Open Season or at the time of a Qualifying Life Event (QLE).

FEHB vs. PSHB: Not a Mirror Image

Your former FEHB plan may not be available under PSHB. Even if the plan name looks familiar, the structure, benefits, and requirements may differ. Here’s what you need to keep in mind.

1. Plan Availability

Many FEHB carriers have submitted new PSHB offerings. But not all plans that existed under FEHB continue unchanged. Some plans have consolidated, renamed, or altered coverage. In some cases, what was once your preferred option may now be different in terms of:

  • Network size

  • Benefit tiers

  • Cost-sharing

If you didn’t actively select a PSHB plan during the Open Season from November to December 2024, you may have been automatically enrolled in a default PSHB plan chosen to match your previous FEHB coverage. But even then, the benefits are not guaranteed to be identical.

2. Premium Contributions

Premiums under PSHB have changed. While the federal government still contributes approximately 72% of the premium cost, your share may be higher than it was under FEHB due to plan pricing and design.

For 2025, average monthly annuitant premiums for PSHB plans are:

  • Self Only: around $241

  • Self Plus One: around $521

  • Self and Family: around $567

These are general averages and don’t reflect regional variation or plan-specific costs. They also do not include out-of-pocket expenses like deductibles or copayments, which may differ significantly.

The Medicare Part B Mandate for Some Retirees

A major difference between FEHB and PSHB is the requirement to enroll in Medicare Part B for some annuitants. Here’s what’s new:

  • If you are a Medicare-eligible annuitant (age 65 or older) and retired after January 1, 2025, you must enroll in Medicare Part B to maintain your PSHB coverage.

  • If you retired on or before January 1, 2025, you are exempt from this requirement. You can keep your PSHB plan without enrolling in Part B, though you may pay higher out-of-pocket costs if you skip it.

This mandatory Medicare Part B enrollment helps reduce costs for the PSHB program overall and coordinates better benefits. Plans often reduce or waive cost-sharing (deductibles, copayments, coinsurance) for members who have both PSHB and Medicare Part B.

Medicare Part D Prescription Drug Integration

Starting in 2025, Medicare-eligible PSHB enrollees are automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) unless they opt out.

  • This EGWP replaces your former prescription drug benefits.

  • It provides coverage through a nationwide pharmacy network.

  • It caps your out-of-pocket drug costs at $2,000 annually.

  • Insulin costs are limited to $35 per month.

If you opt out of this integrated Medicare drug coverage, you will lose all prescription drug coverage under PSHB, and re-enrollment may be restricted.

This marks a major departure from how FEHB handled drug coverage. Under FEHB, Medicare coordination was optional. Under PSHB, it is partially built-in.

Deductibles and Cost Sharing: How It’s Structured Now

Another difference you may notice is how deductibles, copayments, and coinsurance apply. While FEHB plans varied widely, many of them had modest deductibles and predictable copayments.

PSHB plans for 2025 offer a similar structure, but:

  • In-network deductibles may now range from $350 to $500 for standard plans.

  • High-deductible plans may have deductibles from $1,500 to $2,000.

  • Coinsurance for in-network care ranges from 10% to 30%, depending on the service.

  • Out-of-network services often involve higher deductibles and coinsurance (40% to 50%).

These amounts may be reduced for Medicare-enrolled participants, particularly those with Part B.

Out-of-Pocket Maximums and Financial Protection

PSHB maintains a cap on your annual out-of-pocket costs to help protect against financial hardship.

  • For Self Only coverage, the in-network out-of-pocket maximum is $7,500.

  • For Self Plus One and Self and Family, it is $15,000.

Out-of-network limits may be higher and are not always capped in the same way. Under FEHB, these caps were typically similar, but some plans varied widely in implementation.

How Open Season Enrollment Worked in 2024

The first Open Season for PSHB occurred from November 11 to December 9, 2024. You had to:

  • Choose a new PSHB plan,

  • Confirm any dependent information,

  • Coordinate with Medicare if applicable.

If you took no action, you were auto-enrolled in a comparable plan. But again, “comparable” does not mean “identical.” It’s still essential to review your plan’s details in 2025 to understand what you’re getting.

Special Enrollment for Medicare Part B

If you were subject to the new Medicare Part B requirement and hadn’t enrolled before, a Special Enrollment Period (SEP) was available from April 1 to September 30, 2024. Enrolling during this SEP allowed you to avoid lifetime late penalties.

Outside this SEP, standard Medicare enrollment rules now apply, and late penalties may affect your premiums if you delayed.

FEDVIP, FEGLI, and Other Benefits Stay Unchanged

It’s important to understand that only your health insurance moved to PSHB. Your other federal benefits remain under the same systems:

  • FEDVIP: Dental and vision benefits continue under the Federal Employees Dental and Vision Insurance Program.

  • FEGLI: Federal Employees’ Group Life Insurance remains unchanged.

  • FLTCIP: Long-term care insurance status has not been affected.

  • FSAFEDS: Flexible Spending Accounts still apply for active employees.

What to Do If Your Coverage Doesn’t Meet Your Needs

If you find that your PSHB plan for 2025 differs from what you expected under FEHB, you’re not alone. Here are steps you can take:

  • Review your plan brochure to understand all benefits and cost-sharing.

  • Confirm your Medicare enrollment status to ensure full coordination.

  • Track your prescription coverage, especially if you opted out of the integrated Medicare Part D benefit.

  • Call your plan or a licensed agent listed on this website to go over your options for the next Open Season.

The next Open Season will occur from November to December 2025, allowing you to make plan changes for coverage beginning January 1, 2026.

Why Paying Attention in 2025 Pays Off

This first year of the PSHB program is your opportunity to see how your new coverage functions and whether it fits your health care needs and financial reality. It may take some time to compare benefits, but failing to engage could mean higher out-of-pocket costs or missed savings from Medicare coordination.

If you’re approaching age 65 or have already retired, understanding your Medicare Part B responsibilities is essential. The penalties for missing enrollment windows can last for life and increase annually.

Getting the Right Advice Starts with the Right Source

PSHB brings a lot of change, and that change affects your bottom line, your access to care, and your future planning. You no longer have the FEHB safety net to fall back on. What you have now is a redesigned program tailored for Postal Service members, and it comes with new advantages, obligations, and limits.

To make sure your 2025 health plan works for you and your family, review your benefits carefully and ask questions if something doesn’t add up. For help comparing plans, understanding Medicare coordination, or preparing for the next Open Season, speak with a licensed agent listed on this website.