Key Takeaways

  • The Postal Service Health Benefits (PSHB) Program, launched in 2025, has replaced FEHB for USPS employees and annuitants, but it comes with unique cost structures, Medicare requirements, and plan designs.

  • Assuming PSHB and FEHB are virtually the same could leave you facing higher out-of-pocket expenses, tighter coordination rules with Medicare, and limited flexibility if you don’t understand the new system.

What Makes PSHB Different from FEHB in 2025

If you’re a current or retired Postal Service employee, you’ve likely heard that PSHB is simply the FEHB rebranded. It isn’t. While the new Postal Service Health Benefits Program shares structural similarities with FEHB—like Open Season timing and plan types—the fine print tells a very different story. PSHB introduces a distinct approach to cost sharing, eligibility, and Medicare coordination. Understanding these differences can make or break your experience with coverage in 2025 and beyond.

A Mandatory Shift for USPS Participants

As of January 1, 2025, all Postal Service employees and annuitants are required to enroll in a PSHB plan. This is not optional if you want to maintain your federal health benefits. You may have been automatically transitioned from FEHB, but that doesn’t mean your plan works the same way.

  • If you were enrolled in FEHB through USPS in 2024, your plan was replaced by a PSHB equivalent.

  • The transition took place during the Open Season from November to December 2024.

  • Unless you made changes, you were auto-enrolled—but auto-enrollment doesn’t mean it’s the right fit.

Cost Sharing Isn’t What You’re Used To

The most noticeable difference? How much you pay out-of-pocket. PSHB introduces new structures that may increase your financial responsibility even with in-network providers.

  • Deductibles under PSHB plans can be significantly higher than many former FEHB offerings, especially for high-deductible options.

  • Copayments for primary care, specialists, urgent care, and emergency services fall within a broader range, with higher costs at the upper end.

  • Coinsurance percentages are wider, with in-network rates often between 10% to 30%, and out-of-network rates reaching up to 50%.

These figures alone mean you need to reevaluate how much you budget annually for healthcare—even if you rarely use it.

New Out-of-Pocket Maximums That Matter

While FEHB plans offered protection through out-of-pocket caps, PSHB plans often have different—and sometimes higher—limits.

  • For 2025, the in-network out-of-pocket maximums under PSHB are capped at $7,500 for Self Only and $15,000 for Self Plus One or Self and Family.

  • Out-of-network caps can go even higher, depending on the plan’s structure.

This could put a strain on your finances if you experience a serious illness or need long-term specialty care. The purpose of these caps is still to protect you, but the threshold is higher, and you may reach it faster than you expect.

Medicare Part B Integration: No Longer Optional for Some

Unlike FEHB, PSHB makes enrollment in Medicare Part B a requirement for many annuitants and their covered family members. That alone signals a significant change.

  • If you are a Medicare-eligible annuitant and did not retire before January 1, 2025, you’re required to enroll in Medicare Part B to keep your PSHB coverage.

  • Medicare integration isn’t just encouraged—it’s enforced.

There are some exceptions, such as for overseas residents or individuals with VA or Indian Health Services coverage, but most annuitants need to enroll or risk losing part of their PSHB benefits.

This shift transforms how you approach healthcare in retirement. It’s not just about your PSHB plan anymore—it’s about how well it pairs with Medicare.

Prescription Drug Benefits Are Now Coordinated Through Medicare Part D

Another crucial difference: Medicare-eligible PSHB participants automatically receive prescription coverage through a Medicare Part D EGWP (Employer Group Waiver Plan) built into their PSHB plan.

This coverage is mandatory unless you opt out, which can come with serious trade-offs:

  • Opting out of the Part D component removes prescription coverage under PSHB.

  • Re-enrollment later may be restricted or unavailable, depending on circumstances.

Drug costs are now governed by Part D limits, which in 2025 include a $2,000 annual out-of-pocket maximum—a helpful feature, but one that only applies if you stay enrolled in the integrated Part D plan.

FEHB-Like Plan Types—But with PSHB-Specific Rules

The plan types under PSHB look familiar: Self Only, Self Plus One, and Self and Family. However, some rules have been adapted for the PSHB environment:

  • All eligible USPS employees and annuitants must choose a plan specifically from the PSHB marketplace.

  • If your spouse is a federal employee (but not USPS), you may remain on their FEHB plan. But if both are Postal, you must switch to PSHB.

  • PSHB plans have modified networks, benefits coordination policies, and may use different pharmacy benefit managers than their FEHB counterparts did.

You can’t assume the provider list or formulary is the same—review the 2025 plan brochure carefully.

Premiums Are Structured Differently, Even if Subsidized

The government still covers approximately 70% of the premium cost, but that doesn’t mean your share hasn’t changed. Many annuitants are paying more in 2025 compared to what they paid under FEHB in 2024.

Annuitant premium shares for 2025 are:

  • Self Only: $241.07/month

  • Self Plus One: $521.06/month

  • Self and Family: $567.02/month

The total cost of PSHB plans is rising faster than the subsidy can cover in some cases, which directly affects your wallet.

PSHB Enrollment Isn’t Year-Round

Another misconception is that you can switch PSHB plans anytime. You can’t.

  • Changes can only be made during Open Season, unless you experience a Qualifying Life Event (QLE) like marriage, divorce, or birth of a child.

  • Missed the window? You’re locked in until the next enrollment period.

This rule is the same as FEHB, but with more at stake in PSHB given the different Medicare and prescription drug coordination requirements.

Automatic Enrollment Doesn’t Mean Automatic Understanding

One of the biggest risks in 2025 is assuming the plan you were auto-enrolled into is right for your needs. That plan may not:

  • Include your preferred doctor

  • Cover your medications at the same tier or cost

  • Coordinate well with your Medicare benefits

Without actively comparing plan documents and verifying what’s covered, you could end up with higher bills, more prior authorization hurdles, and unnecessary confusion.

Planning Ahead Requires a Different Mindset

In the FEHB era, many retirees could delay Medicare Part B or rely on a single source of coverage. PSHB has restructured that landscape:

  • Medicare enrollment timing now impacts your eligibility.

  • Prescription coverage is tightly linked to the PSHB Part D model.

  • Costs like deductibles and coinsurance may demand a higher reserve of personal funds.

You need a dual-coverage strategy now: PSHB + Medicare. That makes it more important than ever to plan around enrollment deadlines, out-of-pocket protections, and how each piece of your coverage puzzle fits together.

Reviewing PSHB Annually Is No Longer Optional

Because PSHB is still new and plan structures may continue to evolve beyond 2025, passive enrollment is risky. You must review each year’s changes carefully:

  • Check the Annual Notice of Change (ANOC) every fall.

  • Compare costs, networks, and Medicare coordination rules.

  • Reassess whether your chosen plan fits your household’s evolving health needs.

Failing to do this could lead to serious coverage gaps or unexpected expenses.

What You Should Focus On Going Forward

To make the most of your PSHB benefits and avoid financial surprises, you should:

  • Understand your PSHB plan’s deductibles, copays, and coinsurance rates.

  • Confirm if your doctors and pharmacies remain in-network.

  • Make sure you’re enrolled in Medicare Part B and Part D if you’re required to be.

  • Track out-of-pocket costs throughout the year.

  • Prepare to re-evaluate your plan every fall before Open Season.

Small Differences, Big Consequences If Overlooked

PSHB may resemble FEHB on the surface, but its deeper requirements—especially regarding Medicare, cost sharing, and pharmacy coverage—make it a different system altogether. Assuming otherwise could leave you paying more, missing essential benefits, or scrambling during a health emergency.

If you’re unsure about what these changes mean for your personal situation, get in touch with a licensed agent listed on the website for professional advice tailored to your needs.