Key Takeaways:

  • Open Season for PSHB: The Postal Service Health Benefits (PSHB) Open Season runs from November 11, 2024, to December 9, 2024. This is the key window for USPS employees and retirees to review and adjust their health benefits.
  • Major Transition Date: Starting January 1, 2025, all USPS employees and retirees will automatically transition from the Federal Employees Health Benefits (FEHB) program to the new PSHB system, as established by the Postal Service Reform Act of 2022.

The Shift to Postal Service Health Benefits: What You Should Know

If you’re a USPS employee or retiree, you’ve probably heard by now that big changes are coming to your health benefits, and they’re coming fast. This year’s Postal Service Health Benefits (PSHB) Open Season is especially important, as it marks the start of the shift from the Federal Employees Health Benefits (FEHB) program to the new PSHB system. This transition officially takes effect on January 1, 2025, and will bring both new opportunities and some critical changes that you’ll want to be fully prepared for.

Let’s walk through what you need to know to make the best decisions during this year’s Open Season.

Why the Switch to PSHB?

The shift from FEHB to PSHB is a result of the Postal Service Reform Act of 2022. This legislation was designed to stabilize the USPS’s financial situation and create a more streamlined, sustainable benefits program specifically tailored for USPS employees and retirees.

So, what does this mean for you? If you’re currently enrolled in an FEHB plan, you won’t be left hanging. During Open Season (November 11 to December 9, 2024), you’ll automatically be enrolled in a similar PSHB plan. But don’t stop there! You’ll have the option to review your plan details and make changes if necessary. It’s a great opportunity to reassess your coverage and ensure it aligns with your healthcare needs for the upcoming year.

Understanding PSHB Coverage

One thing that might make you breathe a little easier is that your dental and vision benefits through FEDVIP (Federal Employees Dental and Vision Insurance Program) won’t be affected. This means your routine dental exams, cleanings, prescription eyewear, and other dental or vision services will remain covered just like before.

However, medical insurance plans will be exclusively through PSHB starting January 1, 2025. Your new PSHB plan will likely offer comparable coverage to your current FEHB plan, but it’s essential to compare details such as premiums, deductibles, and out-of-pocket maximums. Remember, these factors can make a big difference in your overall healthcare costs throughout the year.

PSHB and Medicare Part B: What Retirees Should Know

Another important element of the new PSHB system is its integration with Medicare Part B. If you’re retired or nearing retirement, this is something you definitely need to pay attention to. The rules surrounding Medicare and PSHB will vary depending on when you retire.

  • If you retire on or before January 1, 2025, you won’t be required to enroll in Medicare Part B to keep your PSHB coverage. However, if you’re already enrolled in Medicare Part B, you may find additional cost savings and lower out-of-pocket expenses when it’s paired with your PSHB plan.

  • If you retire after January 1, 2025, the rules change. Once you become eligible for Medicare (usually at age 65), you’ll need to enroll in Medicare Part B to keep your PSHB coverage. This requirement also applies to family members covered under your plan, so it’s something to plan for.

There are some exceptions to this rule. If you receive care through the Department of Veterans Affairs (VA), Indian Health Services (IHS), or if you live outside the U.S., different guidelines apply. Be sure to understand how these might affect your Medicare Part B enrollment requirements.

Navigating Costs with PSHB

Let’s talk money—because the cost of healthcare is always a top concern. Here’s a breakdown of average premium costs for PSHB plans in 2025. These are averages, so your actual costs might vary based on your selected plan:

  • Self Only: $397.35 biweekly
  • Self Plus One: $858.89 biweekly
  • Self and Family: $934.65 biweekly

The government will continue to cover 72% of the total premium, leaving you responsible for the remaining 28%. For employees, this translates to:

  • Self Only: $111.26 biweekly
  • Self Plus One: $240.49 biweekly
  • Self and Family: $261.70 biweekly

While these numbers may seem high, the good news is that if you’re enrolled in Medicare Part B, some PSHB plans offer significant cost savings, including premium reimbursements and lower deductibles. Be sure to explore these options, especially if you’re nearing retirement or already eligible for Medicare.

FEDVIP: Your Dental and Vision Coverage Continues

Good news on the dental and vision front! Even though your medical insurance will shift to PSHB, your coverage through FEDVIP remains unaffected. Dental and vision premiums will see only modest increases for 2025:

  • Dental premiums will rise by an average of 2.97%.
  • Vision premiums will increase by a smaller margin—0.87%.

These increases are relatively minor compared to the rising costs of healthcare overall, making FEDVIP coverage a valuable part of your benefits package.

Special Enrollment Period for Medicare Part B

In case you missed it, the USPS recently offered a Special Enrollment Period (SEP) for Medicare Part B. This ran from April to September 2024 and allowed USPS retirees and their families not already enrolled in Medicare Part B to sign up without facing late enrollment penalties. The USPS even covered those late penalties for people who took advantage of the SEP. While this special opportunity has now closed, it’s worth noting if you were impacted by the enrollment deadlines.

Tools to Help You Compare and Choose

The sheer number of options during Open Season can be overwhelming. Fortunately, you won’t have to make these decisions blindly. The Office of Personnel Management (OPM) will provide a plan comparison tool to help USPS employees and retirees compare their PSHB and FEDVIP options. This tool allows you to easily weigh factors like premiums, copayments, and out-of-pocket maximums, making it simpler to choose the best plan for your needs.

When comparing plans, take some time to consider how your needs might change in the next year. Are you expecting any major healthcare expenses, like surgeries or ongoing treatments? Does your current plan offer enough coverage, or would another option provide better financial protection?

Looking Ahead to January 1, 2025

As the launch of PSHB on January 1, 2025 approaches, it’s crucial to stay informed and proactive. Open Season is the time to make sure your coverage is just right for you. Review your options carefully, compare costs, and take advantage of tools that can help you make the best decision. By the time the transition happens, you’ll be set up for success under the new PSHB program.

Preparing for the New Benefits Era

With Open Season (November 11 – December 9, 2024) fast approaching and the major transition to PSHB set for January 1, 2025, now is the time to get your health benefits in order. The Postal Service Health Benefits program, born from the Postal Service Reform Act of 2022, offers a significant shift in how USPS employees and retirees will receive healthcare coverage. Taking a proactive approach now will help you navigate these changes with confidence and ensure that your coverage meets your needs in 2025 and beyond.