Key Takeaways

  • The Postal Service Health Benefits (PSHB) Program differs significantly from the Federal Employees Health Benefits (FEHB) Program in structure, eligibility rules, and cost-sharing formulas. Assuming the two are interchangeable can lead to higher out-of-pocket expenses and coverage gaps.

  • Starting in 2025, new requirements—particularly Medicare Part B coordination and prescription drug integration—make it more important than ever to understand your PSHB plan on its own terms, not as a continuation of FEHB.

What You Used to Know Might Not Apply Anymore

Many Postal Service employees and retirees are carrying their old understanding of FEHB into the PSHB era. That’s natural. You spent years becoming familiar with FEHB’s plan selection, cost structure, and coordination with Medicare. But that mental shortcut—treating PSHB as just another name for FEHB—could lead you to overlook some critical differences.

As of January 1, 2025, PSHB officially replaces FEHB coverage for USPS employees, annuitants, and their families. And while PSHB is administered by the same Office of Personnel Management (OPM) that oversees FEHB, the new program includes structural changes you can’t afford to ignore.

The Shift from Choice to Compatibility

With FEHB, your plan selection process was often built around preference—you compared options, reviewed provider networks, and picked the best value for your needs. That approach still matters under PSHB, but a new layer has been added: compatibility with Medicare Part B.

If you or your covered family members are Medicare-eligible, you’re now expected to enroll in Medicare Part B to maintain full PSHB coverage unless you qualify for an exemption. That includes:

  • Retirees who turned 65 after January 1, 2025

  • Family members of annuitants who are Medicare-eligible

  • Medicare-eligible survivors enrolled in PSHB

Failing to enroll in Medicare Part B could result in reduced coverage, especially for major services like inpatient and outpatient care.

A Prescription Drug Shift You Might Not Have Noticed

PSHB plans now include an integrated Medicare Part D prescription drug benefit through a mechanism called the Employer Group Waiver Plan (EGWP). This change streamlines drug coverage for Medicare-eligible members but also introduces rules and limitations that did not exist under FEHB.

Key 2025 changes include:

  • A $2,000 annual cap on out-of-pocket prescription drug costs

  • A new monthly payment option to spread drug expenses evenly throughout the year

  • Automatic enrollment in the EGWP for those with both PSHB and Medicare Part B

If you opt out of EGWP or fail to enroll in Part B when required, you risk losing drug coverage altogether under your PSHB plan.

Premium Contributions Might Look the Same—But They’re Not

Many retirees assume their premium contribution will stay similar to what they paid under FEHB. But PSHB has updated premium sharing formulas, particularly for annuitants. As of 2025:

  • The federal government continues to cover approximately 70% of total plan premiums

  • Annuitant contributions vary depending on plan selection and enrollment tier (Self Only, Self Plus One, Self & Family)

  • Some plans offer cost-saving features for those enrolled in Medicare Part B, such as reduced deductibles or premium reimbursement

However, these features are not consistent across all plans. Assuming your premium behaves the same way it did under FEHB may cause you to overpay or choose a plan that doesn’t match your healthcare usage.

Cost Sharing Has Been Restructured

Another trap of treating PSHB like FEHB is assuming the same cost-sharing terms apply. In reality, PSHB plans in 2025 come with new deductibles, copayments, and coinsurance ranges.

Typical PSHB cost sharing includes:

  • Deductibles: $350–$500 for in-network individual coverage, higher for family tiers or out-of-network

  • Copayments: $20–$40 for primary care, $30–$60 for specialists, and $100–$150 for emergency room visits

  • Coinsurance: 10%–30% for in-network services; 40%–50% out-of-network

  • Out-of-pocket maximums: $7,500 for Self Only, $15,000 for Self Plus One or Self & Family

These figures reflect average plan designs in PSHB—your actual plan may vary. That’s why reviewing your Summary of Benefits each year is crucial.

Medicare Coordination Is No Longer Optional

One of the biggest differences between PSHB and FEHB is the mandatory nature of Medicare Part B enrollment for many retirees and their family members. While under FEHB, Medicare was often treated as optional, PSHB requires it unless you meet strict exemption criteria.

Exemptions apply only if:

  • You retired on or before January 1, 2025

  • You were at least age 64 as of January 1, 2025

  • You reside outside the U.S.

  • You have qualifying coverage through Veterans Affairs (VA) or Indian Health Services (IHS)

Everyone else must enroll in Medicare Part B to keep full PSHB medical and pharmacy benefits. Missing this requirement not only impacts your medical claims but could also restrict your ability to re-enroll in certain drug plans later.

You Can’t Set It and Forget It Anymore

One legacy of the FEHB era was stability—many retirees picked a plan and stuck with it for years. But under PSHB, set-it-and-forget-it behavior could cost you.

Why? Because each PSHB plan:

  • May change its cost-sharing model annually

  • Offers different coordination terms with Medicare Part B

  • Can add or drop coverage for services like dental, vision, or telehealth

That makes the annual Open Season—from November to December—a crucial time to compare, switch, or update your plan based on current needs.

Even if your plan hasn’t changed, your circumstances might have. If you or a dependent became Medicare-eligible this year, you could be missing critical benefits without realizing it.

Plan Literature Can Be Deceptively Familiar

Another reason many fall into the mental shortcut trap is that PSHB brochures look very similar to those used under FEHB. The formatting, categories, and language are nearly identical. That familiarity can lull you into skimming rather than reading for new details.

In 2025, you must pay close attention to:

  • Medicare Coordination Provisions: These outline how the plan works with Parts A and B

  • Out-of-pocket Cost Limits: Especially for prescription drugs

  • Provider Network Access: PSHB plans are required to maintain adequate networks, but availability may shift

Treating a PSHB brochure like last year’s FEHB guide could mean you miss key policy changes.

Some Coverage Now Comes with Conditions

Under PSHB, full benefit access may be conditional on your enrollment in other programs. Medicare Part B is the most prominent example, but it’s not the only one. You may also encounter:

  • Wellness Requirements: Incentives or reduced costs tied to completing health assessments

  • Special Enrollment Conditions: For certain drug programs or specialty services

  • Primary Care Assignments: In select plans, access to some services may require designating a primary care provider

These conditions didn’t commonly apply under FEHB but are increasingly part of the PSHB landscape.

Time-Based Eligibility Now Plays a Bigger Role

Your retirement date, age, and Medicare enrollment timing all shape your current PSHB coverage. Under FEHB, these factors were important but rarely decisive. In PSHB, they directly determine what you qualify for.

Key time-based checkpoints:

  • January 1, 2025: The official switchover from FEHB to PSHB

  • Age 65: Medicare eligibility age; triggers the requirement to enroll in Part B

  • Annual Open Season: Typically mid-November through mid-December; the only regular chance to change plans unless you experience a qualifying life event

Missing any of these time markers could result in penalties, restricted coverage, or locked-in plan options for the rest of the year.

Final Thoughts on Rethinking Old Habits

If you’re still approaching your health plan with an FEHB mindset, it’s time to rethink. PSHB represents not just a new acronym but a shift in how Postal Service employees and retirees access care, manage costs, and maintain eligibility.

This is not a year to coast on old assumptions. It’s a year to:

  • Re-read your plan details

  • Confirm your Medicare status

  • Compare options during Open Season

  • Ask direct questions about coordination, cost sharing, and benefits

And if you’re unsure where to begin, get in touch with a licensed agent listed on this website for professional advice that’s personalized to your situation.