The Differences Between FEHB and PSHB Plans That Can Catch You Off Guard

Key Takeaways

• The transition from FEHB to PSHB in 2025 introduces structural changes that can affect how you access care, what you pay, and your Medicare obligations.

• While many benefits remain similar, the differences in cost sharing, enrollment requirements, and integration with Medicare Part B can have a meaningful impact on your healthcare decisions.

What the Switch to PSHB Really Means

In 2025, the Postal Service Health Benefits (PSHB) Program replaces your previous FEHB (Federal Employees Health Benefits) plan if you’re a USPS employee, retiree, or eligible family member. On the surface, this change may seem like a relabeling. But there are several key distinctions between the two systems that could influence your healthcare costs, coverage access, and long-term planning.

Understanding the nuances of PSHB is essential if you’re making enrollment decisions, especially if you’re retired or Medicare-eligible. Let’s walk through the most critical areas where FEHB and PSHB differ, and how those differences may affect you.

1. Enrollment Is Now Tied to Your Postal Status

Under FEHB, any federal employee or retiree could enroll in any available plan. In 2025, only USPS workers and annuitants can enroll in the PSHB program. You are automatically transitioned into a PSHB plan unless you take action during Open Season.

If you’re retired and your coverage is through a family member who is a non-postal federal worker, you may remain in FEHB. But if you are the enrollee and a postal annuitant, your plan is now under PSHB. This shift makes your postal employment status central to your coverage eligibility.

2. You May Now Be Required to Enroll in Medicare Part B

This is one of the most important changes. Unlike FEHB, where Medicare enrollment was optional (but encouraged), PSHB introduces mandatory Medicare Part B enrollment for many.

If you’re a Medicare-eligible postal retiree and you retired after January 1, 2025, you’re required to enroll in Medicare Part B to maintain your PSHB coverage. There are exceptions, such as if you live abroad or are covered under VA or Indian Health Services. But for most, delaying or declining Part B now leads to the loss of your PSHB plan or limited coverage options.

This requirement also applies to Medicare-eligible family members on your plan. So, if your spouse is covered under your PSHB plan and qualifies for Medicare, they’ll also need to enroll in Part B.

3. Your Prescription Drug Coverage Now Integrates with Medicare Part D

FEHB plans traditionally included standalone prescription benefits. Under PSHB, if you’re enrolled in Medicare, your drug coverage is now integrated through a Medicare Part D Employer Group Waiver Plan (EGWP).

This switch allows you to access:

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

• Expanded pharmacy networks, including many retail chains.

• A $35 insulin cap, applicable to Medicare-covered drugs.

If you opt out of the EGWP, you lose drug coverage under PSHB entirely. This is another area where declining Medicare enrollment can affect more than just hospital or doctor visits.

4. Plan Offerings Have Changed

Although PSHB draws many of its plan offerings from the same providers you may have seen under FEHB, the menus are no longer identical.

• Some FEHB plans have been excluded from PSHB.

• Certain plan names remain the same, but coverage terms, copayments, and provider networks may differ.

• Benefit enhancements, like waived deductibles for Medicare Part B enrollees, are now common in PSHB.

You may find that your previously preferred FEHB plan is not available, or that the plan under PSHB comes with revised benefits.

5. Cost Sharing Structures Have Been Realigned

PSHB uses similar terminology as FEHB: premiums, deductibles, copays, coinsurance, and out-of-pocket maximums. But how much you pay for each has shifted.

For example, in 2025:

• In-network deductibles typically range from $350 to $500.

• Out-of-network deductibles can be as high as $3,000.

• Copays for primary care are about $20 to $40, and specialists $30 to $60.

• Coinsurance often runs between 10% to 30% in-network, and 40% to 50% out-of-network.

If you’re Medicare-enrolled, many PSHB plans reduce or waive some of these costs. But if you’re not, your out-of-pocket burden may be significantly higher than under FEHB.

6. Monthly Contributions Are Structured Differently

You still pay a portion of your premium under PSHB. The government continues to contribute approximately 72% of the total premium on average. But the new structure specifically reflects your USPS employment or retirement status.

In 2025, the annuitant’s share of monthly premiums is:

• Self Only: $241.07

• Self Plus One: $521.06

• Self and Family: $567.02

These are averages. What you pay depends on your plan, and whether you receive Medicare integration benefits. If you are working, your employee premiums are higher than those of annuitants but are offset by USPS contributions.

7. Out-of-Pocket Maximums Now Have Hard Caps

A new structural difference in PSHB is the standardized out-of-pocket maximum for in-network services:

• Self Only: $7,500

• Self Plus One / Self and Family: $15,000

These limits do not include out-of-network care. Also, they are separate from the $2,000 prescription drug cap under the EGWP. These caps offer clearer protections than some of the variable FEHB plan limits, especially for high-need patients.

8. Reenrollment Restrictions Are Stricter

If you opt out of Medicare Part B and are removed from PSHB eligibility, returning later isn’t guaranteed. The window to make changes is limited to Open Season or qualifying life events (QLEs). Reenrollment into the EGWP drug program is similarly restricted.

Under FEHB, there was more flexibility in resuming coverage after opting out. With PSHB, the integration with Medicare and the new eligibility rules add more pressure to make the right decision at the right time.

9. The Annual Open Season Timing Remains but Comes with New Responsibilities

Open Season continues to run from November to December each year. But now, you’re choosing only from PSHB options, and you need to consider your Medicare enrollment status before the window closes.

In 2024, USPS employees and retirees had a one-time opportunity to review and enroll in PSHB plans for 2025. Going forward, this annual window becomes your only chance—outside of life events—to switch or adjust plans.

10. Resources and Support Have Been Expanded

To help you manage the transition, the PSHB system includes more centralized support:

• KeepingPosted.org for annuitants.

• LiteBlue for current USPS employees.

• PSHB Navigator Help Line (1-833-712-7742) for all postal health benefit inquiries.

While these tools aim to clarify the process, you are ultimately responsible for reviewing your coverage annually and ensuring your Medicare Part B enrollment is maintained if required.

Know What You’re Committing To Before Open Season

If you’ve assumed that PSHB is just a renamed version of FEHB, it’s time to reassess. While there are similarities in structure and coverage scope, the distinctions—especially around Medicare integration, cost sharing, and drug coverage—can change your financial and healthcare landscape.

Now more than ever, it’s important to:

• Review your plan options annually.

• Understand how Medicare affects your PSHB eligibility and benefits.

• Compare total costs, not just premiums.

If you’re unsure what these changes mean for your situation, speak to a licensed agent listed on this website. They can help you evaluate your options and prepare for Open Season with clarity and confidence.