Key Takeaways

  • In 2025, all USPS employees, retirees, and eligible family members must transition from FEHB to the new Postal Service Health Benefits (PSHB) Program.

  • Medicare-eligible retirees face new requirements to enroll in Medicare Part B to retain PSHB coverage, unless they qualify for specific exemptions.

Understanding the Shift from FEHB to PSHB

The United States Postal Service is making a significant change in how healthcare benefits are delivered to its employees and retirees. Starting in 2025, the Federal Employees Health Benefits (FEHB) Program is no longer available to USPS workers and retirees. In its place is the Postal Service Health Benefits (PSHB) Program, created as part of the Postal Service Reform Act of 2022.

You are now required to enroll in a PSHB plan to maintain health coverage through your employment or retirement with USPS. This shift affects current employees, annuitants, and eligible family members. The Office of Personnel Management (OPM) oversees the PSHB just as it did FEHB, but the benefits, enrollment rules, and coordination with Medicare have changed.

Who Must Enroll and When

If you are a USPS employee or annuitant, you must make sure you are enrolled in a PSHB plan by the start of 2025 to continue health coverage. Enrollment happens during the Open Season, which took place from November to December 2024.

You will be automatically enrolled in a comparable PSHB plan if you had FEHB coverage and took no action during Open Season. However, automatic enrollment doesn’t guarantee that the plan fits your needs, so it’s important to review your options.

Special Note for Medicare-Eligible Annuitants

If you are Medicare-eligible and retired on or after January 1, 2025, you must enroll in Medicare Part B to remain enrolled in a PSHB plan. Exceptions apply if:

  • You retired on or before December 31, 2024

  • You were an employee age 64 or older as of January 1, 2025

  • You live overseas

  • You receive health care from the VA or Indian Health Service

Failing to meet the Medicare Part B requirement will result in losing your PSHB coverage.

How PSHB Coordinates With Medicare

If you are enrolled in Medicare Part B, your PSHB plan typically offers:

  • Lower deductibles

  • Reduced copayments and coinsurance

  • Waived or minimized out-of-pocket costs for many services

This dual coverage can save you significant healthcare costs in retirement, particularly if you have frequent medical needs. While the PSHB program is not a Medicare replacement, it complements your Medicare coverage to provide more complete protection.

What’s Changing Compared to FEHB

Several structural differences now define the PSHB Program:

  • Plan Availability: Only USPS-specific plans are available under PSHB, even if they resemble existing FEHB options. You must select from these USPS-only options.

  • Medicare Coordination: Medicare Part B enrollment is mandatory for certain retirees, unlike under FEHB, where it was optional.

  • Drug Coverage: If you’re Medicare-eligible, your PSHB plan includes Medicare Part D prescription drug coverage through a separate component known as an Employer Group Waiver Plan (EGWP).

  • Premium Contribution: USPS employees and retirees pay their share of premiums, with the federal government continuing to cover a significant portion, just as it did under FEHB.

Understanding Drug Coverage Under PSHB

If you are enrolled in both Medicare and PSHB, your drug coverage is now handled through a Medicare Part D EGWP. This has its own benefits:

  • A $2,000 annual cap on out-of-pocket drug costs in 2025

  • Coverage for common maintenance drugs like insulin capped at $35 per month

  • An expanded pharmacy network

You may choose to opt out of this prescription drug coverage, but doing so means you’ll lose all drug coverage under PSHB, and you’ll face limitations on re-enrollment.

Cost Considerations in 2025

Your out-of-pocket expenses under PSHB depend on several factors:

  • Whether you use in-network or out-of-network providers

  • The type of plan you choose (low-deductible vs. high-deductible)

  • Your enrollment in Medicare Part B

In general, copayments for services like primary care and specialist visits range from $20 to $60 in-network. Deductibles vary from $350 to $2,000, and out-of-pocket maximums range from $5,000 to $15,000 depending on plan type and coverage level.

If you’re enrolled in Medicare, some of these costs may be waived or lowered, offering better value over time.

What Happens If You Miss Enrollment

If you failed to act during Open Season in 2024, but were previously enrolled in FEHB, you are automatically transitioned to a comparable PSHB plan. However, this may not be the most cost-effective or comprehensive plan for your situation. You can make changes during the next Open Season or if you experience a Qualifying Life Event (QLE), such as:

  • Marriage or divorce

  • Birth or adoption of a child

  • Loss of other health insurance coverage

These events allow you to update your coverage outside the regular enrollment window.

Resources for Enrollment and Support

To manage your enrollment:

  • Employees use the USPS employee portal, LiteBlue.

  • Annuitants use the KeepingPosted.org website.

Additional resources include plan comparison tools and the PSHB Navigator Help Line at 1-833-712-7742. These tools can help you evaluate coverage, estimate costs, and verify your Medicare status.

Your Responsibilities Going Forward

Maintaining your PSHB coverage requires staying informed and proactive. Here’s what you need to do:

  • Review your plan each year during Open Season to ensure it still meets your needs

  • Report any changes in family status or eligibility that affect coverage

  • Track your Medicare eligibility if you’re approaching age 65

  • Keep your contact information updated so you receive critical communications

PSHB Doesn’t Affect Other Federal Benefits

Although PSHB replaces FEHB for USPS workers and retirees, your other federal benefits remain unchanged. These include:

  • FEDVIP (Federal Employees Dental and Vision Insurance Program)

  • FEGLI (Federal Employees’ Group Life Insurance)

  • FSAFEDS (Flexible Spending Accounts for current employees)

  • FLTCIP (Federal Long Term Care Insurance Program)

These benefits operate independently and are not tied to PSHB enrollment or Medicare status.

What to Expect in the Future

As 2025 progresses, you can expect improvements in how the PSHB system operates, including:

  • Enhanced digital tools for plan comparison

  • Mid-year notifications for unused supplemental benefits

  • Clearer integration with Medicare data for smoother enrollment

Staying updated each year ensures you make the most of your benefits and avoid unnecessary costs or lapses in coverage.

Take Control of Your Healthcare Decisions

The transition to the PSHB Program may feel like a major shift, but with the right preparation, it offers opportunities for better, more streamlined health coverage. Whether you are a current USPS employee or a retiree, understanding the new system is essential to protecting your health and finances.

If you need personalized help evaluating your options, reach out to a licensed agent listed on this website for professional guidance.