Key Takeaways

  • Although the Federal Employees Health Benefits (FEHB) program may feel more familiar, the Postal Service Health Benefits (PSHB) program now offers plan structures that could lead to better integration with Medicare, especially for retirees.

  • However, the PSHB program introduces new rules, requirements, and cost-sharing formats that might affect your wallet differently than FEHB. Understanding these differences is key to avoiding unexpected financial strain.

The Shift from FEHB to PSHB: Why It Matters Now

The transition from the FEHB system to the PSHB program isn’t just administrative—it fundamentally changes how your benefits are structured. As of January 1, 2025, all USPS employees and annuitants are required to enroll in a PSHB plan to maintain federal health insurance coverage.

This marks a significant departure from the longstanding FEHB system. While both are administered by the Office of Personnel Management (OPM), PSHB is designed specifically for Postal Service employees and retirees, and with that comes a new set of expectations, benefits, and caveats.

Medicare Part B Enrollment Requirement

One of the most important changes is the PSHB program’s requirement for Medicare-eligible annuitants and their covered family members to enroll in Medicare Part B. This mandate applies unless you fall under a few exceptions, such as retiring on or before January 1, 2025, or being age 64 or older as of that date.

Failure to enroll in Medicare Part B—unless exempt—could lead to the loss of your PSHB coverage. This requirement has significant implications:

  • You will pay an additional monthly premium for Part B.

  • You may benefit from lower out-of-pocket costs in your PSHB plan because of better coordination with Medicare.

  • PSHB plans may offer benefits such as waived deductibles or enhanced pharmacy benefits for those with Part B.

Premiums: What You Pay Isn’t What You Used to Pay

PSHB premiums follow a different structure, although the government still contributes about 70% of the cost. For 2025, your share of the premium depends on the type of plan you select (Self Only, Self Plus One, or Self & Family) and whether you are an active employee or an annuitant.

Many enrollees are noticing that their contributions under PSHB are higher compared to what they paid under FEHB in previous years. This is due to several factors:

  • Rising healthcare costs in general

  • Greater cost-sharing responsibilities for enrollees

  • New plan structures with different actuarial values

It’s important to review the plan brochures carefully, not just the monthly premium, but also deductibles, copayments, and coinsurance levels.

Deductibles: A New Financial Pressure Point

Unlike many FEHB plans that had relatively modest deductibles, several PSHB plans now feature higher deductibles—particularly for high-deductible health plans (HDHPs). For example:

  • In-network deductibles for Self Only coverage may range from $350 to $1,500

  • Family deductibles can be twice that or more, depending on the plan type

If you are used to low or no deductibles, this change can catch you off guard. What’s more, your deductible must usually be satisfied before the plan begins covering most services (except preventive care).

Copayments and Coinsurance: How They Stack Up

PSHB plans generally mirror FEHB in offering copayments for routine services, but the amounts have shifted. You may now see:

  • $20-$40 copays for primary care

  • $30-$60 for specialist visits

  • $50-$75 for urgent care

  • $100-$150 for emergency room visits

Some services are covered through coinsurance instead—usually 10% to 30% for in-network services and up to 50% for out-of-network care. Unlike copays, coinsurance exposes you to a percentage of the total cost, which can be a financial shock if the underlying cost is high.

Out-of-Pocket Maximums: Where Costs Cap Off

The PSHB program does set out-of-pocket maximums to limit your total spending for in-network services:

  • $7,500 for Self Only

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

However, if you use out-of-network services or fail to coordinate properly with Medicare, you could end up paying more. These maximums reset each calendar year, so you start over every January.

Prescription Drug Coverage: Now Under Part D

With the PSHB transition, most Medicare-eligible enrollees are automatically enrolled in an Employer Group Waiver Plan (EGWP) under Medicare Part D for prescription drugs. This setup includes:

  • A $2,000 out-of-pocket cap in 2025

  • A $35 per month insulin cap

  • Wider access to preferred pharmacies

If you opt out of the Part D coverage that comes with your PSHB plan, you risk losing all prescription drug benefits under PSHB—and you may not be able to re-enroll unless you experience a qualifying life event.

Plan Availability: Fewer Options, More Tailored Choices

One notable change with PSHB is a reduction in the total number of available plans. While this might feel restrictive, the trade-off is that the remaining plans are specifically tailored to USPS workers and retirees.

Plans are now expected to integrate more effectively with Medicare, offer broader pharmacy access, and feature uniform administrative policies. Still, fewer choices mean you need to pay closer attention to the nuances of each option during Open Season (November to December).

Transition Rules and Exceptions

Not everyone is treated the same in the PSHB transition. Exceptions exist for:

  • Annuitants who retired on or before January 1, 2025

  • Employees who were age 64 or older on January 1, 2025

  • Certain international residents and those receiving VA or Indian Health Services benefits

If you fall into any of these categories, you may not need to enroll in Medicare Part B to keep your PSHB coverage. However, it’s essential to verify your status before making any assumptions.

Special Enrollment Periods and Deadlines

To help with the transition, a Special Enrollment Period (SEP) was offered from April to September 2024 to allow eligible individuals to enroll in Medicare Part B without penalty. That window has closed, but you may still have options through:

  • General Enrollment Period (Jan 1 to Mar 31 annually)

  • Open Season (Nov to Dec annually for plan changes)

  • Qualifying Life Events (QLEs), like marriage, divorce, or birth of a child

Failing to act during these windows could result in coverage gaps or financial penalties.

Administrative Access and Support

PSHB uses a slightly different administrative portal system:

  • Active Employees: Use LiteBlue

  • Annuitants: Use KeepingPosted.org

You can compare plans, download brochures, and see your premium breakdowns through these tools. The PSHB Navigator Help Line (1-833-712-7742) remains available for support, but keep in mind that for plan-specific guidance, speaking with a licensed agent is often more effective.

What You Should Do Next

If you’re currently enrolled in an FEHB plan and qualify for PSHB, you will be automatically enrolled in a corresponding PSHB plan for 2025. That doesn’t mean you should remain passive.

Here’s what you can do:

  • Review your new plan details immediately upon receiving your notice.

  • Assess your expected healthcare usage and compare it with plan cost-sharing features.

  • Verify your Medicare Part B enrollment if required.

  • Use Open Season to switch to a different PSHB plan if the default one doesn’t fit your needs.

Getting Ahead of the Curve with the Right Information

Understanding the PSHB program now gives you an edge. The sooner you learn the differences between FEHB and PSHB, the better equipped you’ll be to handle the cost shifts, Medicare integration rules, and benefit structures that come with this new system.

If you’re unsure whether your plan covers what you need or whether you’ll face penalties for skipping Medicare Part B, reach out to a licensed agent listed on this website. Making an informed choice now can prevent thousands in unnecessary expenses later.