Key Takeaways

  • PSHB contributions in 2025 directly impact the quality and affordability of your healthcare throughout retirement. Understanding what these payments support helps you make smarter choices.

  • With the full transition from FEHB to PSHB now complete, retirees face new cost-sharing rules and Medicare coordination requirements that influence monthly premiums, copayments, and coinsurance responsibilities.

The Shift That Changed Everything

In 2025, the Postal Service Health Benefits (PSHB) program officially replaces the Federal Employees Health Benefits (FEHB) program for Postal Service retirees. While the shift brings familiar plan types and similar coverage levels, what fundamentally changes is how your contributions are structured—and what they ultimately buy you.

You’re no longer simply contributing to a generic federal plan. You’re now part of a new, tailored system with rules that prioritize Medicare coordination, enforce unique cost-sharing formulas, and hold you responsible for more financial decision-making than ever before. That’s why understanding where your contributions go in 2025 is not just important—it’s essential.

Your Monthly Premium: What Are You Actually Paying For?

Your monthly premium under PSHB covers far more than basic access to healthcare. Here’s a breakdown of what it supports:

  • In-network provider access: Plans maintain negotiated rates with doctors, hospitals, and specialists.

  • Preventive services: Screenings, vaccinations, and wellness visits are often covered in full.

  • Catastrophic protection: All PSHB plans include annual out-of-pocket maximums to cap your costs in case of major illness.

  • Medicare Part D drug coverage integration: If you’re Medicare-eligible, your plan includes a built-in Part D Employer Group Waiver Plan (EGWP), reducing drug costs and offering access to an expanded pharmacy network.

  • Medicare Part B coordination features: Plans may waive deductibles or reduce coinsurance if you’re enrolled in Medicare Part B.

These premium dollars go further when you’re enrolled in Medicare Part B—but for those who aren’t, you may find yourself covering higher out-of-pocket expenses.

How Government Contributions Work in 2025

The federal government continues to pay approximately 70% of the total premium, leaving you responsible for the remaining 30%. That cost-sharing applies across all three coverage tiers:

  • Self Only

  • Self Plus One

  • Self and Family

As a retiree, the amount deducted from your annuity depends on the plan and tier you choose. In 2025, annuitant contributions average over $500/month for family coverage, making plan selection a highly consequential financial decision.

Coinsurance and Copayments: Your Contribution Doesn’t End With the Premium

Paying your premium doesn’t mean your costs are covered. Many plans include:

  • Coinsurance: Often 10% to 30% for in-network services; higher for out-of-network care.

  • Copayments: Typical copays in 2025 are $20–$40 for primary care and $30–$60 for specialists.

  • Emergency room and urgent care costs: ER visits may come with a $100+ copay, while urgent care averages $50–$75.

These add up quickly. Frequent specialist visits or lab tests can push your annual expenses into the thousands if you’re not enrolled in Medicare Part B or don’t consider cost-sharing during plan selection.

Medicare Part B Enrollment: A Contribution That Changes the Game

In 2025, if you’re a Medicare-eligible Postal Service annuitant, your PSHB plan expects you to be enrolled in Medicare Part B. This rule applies unless:

  • You retired on or before January 1, 2025

  • You turned 64 before January 1, 2025

  • You live overseas or qualify for specific exceptions like VA or Indian Health Services care

If you are required to enroll in Part B and don’t, you’ll lose access to prescription drug coverage under PSHB. Your Medicare Part B premium is a personal expense, but it unlocks valuable cost-saving features within your PSHB plan—like reduced copays, waived deductibles, and better coinsurance rates.

Prescription Drug Costs: How Contributions Keep You Covered

Thanks to the integration of Medicare Part D EGWP plans into PSHB, Medicare-eligible enrollees benefit from:

  • A $2,000 annual out-of-pocket cap for prescriptions

  • $35 monthly insulin copay caps

  • An expanded network of pharmacies

  • The option to pay drug costs in monthly installments over the year

This prescription benefit is a major part of your contribution value, especially for those managing chronic conditions. However, it only applies if you maintain Medicare Part B enrollment.

Your Out-of-Pocket Maximum: The Safety Net You Pay Into

Each PSHB plan comes with an annual out-of-pocket maximum, which limits how much you’ll pay for covered services in a year. In 2025, these limits vary:

  • Self Only: Up to $7,500 in-network

  • Self Plus One / Family: Up to $15,000 in-network

These limits don’t include premiums but do include deductibles, copays, and coinsurance. Once you reach the cap, the plan covers 100% of in-network eligible costs for the rest of the year.

However, out-of-network charges may not count toward the limit. That’s why knowing the scope of your plan network—and staying within it—is crucial to controlling your contributions.

Are You Getting Your Money’s Worth?

Every dollar you contribute under PSHB should yield real healthcare value. But that doesn’t always happen automatically. To make sure your contributions are working for you, ask yourself:

  • Are you enrolled in Medicare Part B to unlock lower cost-sharing?

  • Does your plan reduce or waive deductibles for Medicare participants?

  • Are your providers in-network?

  • Do your medications fall under preferred drug tiers?

  • Have you reached or approached your out-of-pocket maximum?

Answering these questions helps ensure that your monthly and service-based contributions aren’t being wasted on mismatched coverage.

Annual Review: Why Contribution Awareness Isn’t One-and-Done

Every year from November to December, the PSHB Open Season gives you a window to switch plans. Since premiums, cost-sharing, and Medicare coordination features can change year to year, failing to review these changes could result in significantly higher contributions the following year.

Be sure to review the following each Open Season:

  • Updated premium shares

  • Changes in copayments or coinsurance

  • Adjusted deductibles or out-of-pocket caps

  • Any new Medicare Part B requirements or incentives

  • Shifts in prescription drug tiers or formularies

Even if you’re happy with your plan, changes beyond your control can affect your bottom line. Staying active in plan selection is the best way to ensure you’re not overpaying.

PSHB Contributions Are a Retirement Reality—Not Just a Payroll Line Item

For working Postal employees, healthcare contributions are deducted from paychecks automatically and often go unnoticed. But as a retiree, these costs become real monthly bills. Unlike when you were employed, there’s no more buffer—your annuity and Medicare are your main supports.

Understanding exactly what your PSHB contributions fund—down to copay structure and Medicare interactions—empowers you to protect your income and health.

Why This Information Matters for Every Postal Retiree

As the PSHB system takes full effect in 2025, retirees who fail to adapt may face escalating healthcare costs. But those who understand how their contributions tie into premiums, Medicare coordination, and cost-sharing can keep expenses under control while preserving access to high-quality care.

Don’t make assumptions based on past FEHB experience. PSHB introduces new layers, and your role as an informed retiree matters more than ever. Take advantage of your ability to compare, plan, and choose what fits best.

If you’re unsure whether your contributions are working for you—or if you might benefit from switching plans or adding Medicare Part B—speak with a licensed agent listed on this website. They can help you review your plan details and make a well-informed decision.