Key Takeaways

  • Although PSHB and FEHB offer comparable coverage, the cost structure under PSHB in 2025 often feels heavier on your wallet.

  • Premiums, Medicare integration requirements, and cost-sharing differences are what truly separate PSHB from your past experience with FEHB.

Understanding the Shift: PSHB vs. FEHB in 2025

If you’re a postal retiree or worker, the transition from the Federal Employees Health Benefits (FEHB) Program to the Postal Service Health Benefits (PSHB) Program in 2025 likely raised some questions for you. At a glance, PSHB plans appear almost identical to FEHB. Same networks. Same general benefits. But once you look closer, the financial details reveal that the two systems operate under very different cost assumptions.

What Stayed the Same Between FEHB and PSHB

To start, let’s acknowledge the areas where PSHB mirrors FEHB:

  • Comprehensive medical coverage including preventive services, hospital care, prescription drugs, and specialist visits.

  • National provider networks allowing broad access to doctors and hospitals.

  • Annual Open Seasons when you can review and change your plan.

  • Eligibility for dental and vision coverage through separate FEDVIP plans.

  • Continuation of FEHB for those on a family member’s plan if you were not directly enrolled.

Where PSHB Starts to Look Different

While the benefits themselves are similar, PSHB plans have adopted distinct cost-sharing models that can affect your bottom line differently compared to FEHB.

Changes in Premium Contributions

  • Premium contributions for retirees: Postal retirees now face a structured premium schedule distinct from the broader FEHB group. In general, you might notice your share of the premium is slightly higher than what you paid under FEHB.

  • Government contributions: In 2025, the government continues to cover approximately 70% of the total premium. However, the total cost of PSHB plans tends to be slightly higher than comparable FEHB plans, meaning your 30% share is larger too.

Higher Out-of-Pocket Costs

  • Copayments and coinsurance: Many PSHB plans in 2025 have higher copayments for services like specialist visits, urgent care, and emergency room visits.

  • Deductibles: Some PSHB plans offer lower premiums but with higher annual deductibles.

The Big New Factor: Medicare Part B Enrollment

A major shift with PSHB in 2025 is how it integrates with Medicare Part B.

Mandatory Enrollment and Timeline

  • Mandatory Medicare Part B enrollment: If you are a postal retiree who is Medicare-eligible, you must enroll in Part B to maintain your PSHB coverage.

  • Timeline for requirement: If you retired before January 1, 2025, and were not already enrolled in Part B, you are exempt. However, if you retired after this date, enrollment in Part B is mandatory when you become eligible.

Financial Impact of Part B

  • Financial impact: The standard Part B premium in 2025 is $185 per month. This is an additional cost on top of your PSHB premium.

  • Penalty for non-enrollment: Failing to enroll on time can cause you to lose your PSHB health coverage.

Cost Considerations You Can’t Ignore

The similarities in benefits between FEHB and PSHB may lead you to assume your healthcare costs would stay predictable. However, there are several major areas where PSHB can create new cost burdens:

Dual Premium Payments

  • Double premiums: You pay both PSHB premiums and Medicare Part B premiums starting at age 65 if you’re Medicare-eligible.

Out-of-Pocket Maximums and Drug Costs

  • Out-of-pocket maximums: Although PSHB plans often have lower out-of-pocket limits for in-network services compared to some FEHB plans, many still feel the impact because of coinsurance requirements on services like hospital stays or outpatient surgery.

  • Prescription drugs: PSHB integrates prescription drug coverage with Medicare Part D via Employer Group Waiver Plans (EGWPs).

Additional Budgeting Realities in 2025

Other hidden costs can sneak up on you in the PSHB world:

Service Copays and Coinsurance

  • Higher specialist visit copays: These can range from $30 to $60 in 2025.

  • Urgent care costs: Often $50 to $75 per visit.

  • Emergency room costs: You could be billed $100 to $150 for each ER visit.

  • Coinsurance for certain services: Surgeries, outpatient procedures, and durable medical equipment might require 10% to 30% coinsurance after your deductible is met.

PSHB and Retiree Financial Planning

Given these changes, it’s smart to adjust your financial planning:

  • Plan for Medicare Part B costs starting at age 65.

  • Factor in copayments when budgeting for healthcare, not just monthly premiums.

  • Review your plan annually during Open Season.

  • Understand catastrophic protections: Hitting your plan’s out-of-pocket maximum can still cost thousands if you have a major health event.

Is PSHB Still a Good Deal for Postal Workers and Retirees?

Despite higher costs in some areas, PSHB still offers substantial value:

  • Strong government premium contributions keep your base premium costs manageable.

  • Broad networks allow access to top doctors and hospitals.

  • Catastrophic protection through annual out-of-pocket limits.

Timeline Highlights for 2025

  • January 1, 2025: PSHB officially replaced FEHB for postal employees and retirees.

  • April to September 2024: Special Enrollment Period for retirees needing Medicare Part B.

  • November to December 2025: First full Open Season under the PSHB system.

How to Prepare Yourself Moving Forward

Success in managing your PSHB costs comes down to:

  • Understanding your plan’s deductible and how quickly you might reach it.

  • Confirming your doctors and hospitals are in-network each year.

  • Evaluating prescription drug coverage carefully under the EGWP integration.

  • Checking your plan’s cost-sharing for common services you expect to use.

Your Smart Strategy for PSHB in 2025 and Beyond

As you move forward under PSHB, treating your health plan as an active part of your financial strategy is crucial. Don’t assume the coverage you pick this year will be the right fit forever. Healthcare costs change, and your needs will too.

If you have questions about selecting the right PSHB plan or coordinating with Medicare Part B, be sure to reach out to a licensed insurance agent listed on this website. Getting professional advice can save you both money and frustration in the long run.