Key Takeaways:
- The Postal Service Health Benefits (PSHB) program will replace FEHB for USPS employees and retirees starting January 1, 2025, following the Postal Service Reform Act of 2022.
- Open Season for PSHB runs from November 11, 2024, to December 9, 2024—this is your chance to review and select the best PSHB and FEDVIP plans for you and your family.
Understanding the Shift from FEHB to PSHB
The Postal Service Health Benefits (PSHB) program is a significant change that all USPS employees and retirees need to prepare for. This new program will replace the Federal Employees Health Benefits (FEHB) program for postal workers, officially launching on January 1, 2025. The switch is part of the Postal Service Reform Act of 2022, which brings several important changes to how healthcare benefits are handled for USPS employees and retirees.
Let’s walk through what this shift means and what you should know before making any decisions during the upcoming Open Season, which runs from November 11, 2024, to December 9, 2024.
What is PSHB, and How Does it Differ from FEHB?
The PSHB program is designed specifically for USPS employees and retirees, with the primary goal of streamlining healthcare benefits and ensuring the long-term sustainability of these plans. Though the structure and coverage options of PSHB are very similar to FEHB, there are some distinctions.
For instance, under PSHB, employees and retirees will continue to have access to a wide range of plans, similar to what FEHB offered. However, PSHB introduces tailored plans that aim to meet the unique needs of postal workers, especially those transitioning to retirement.
Additionally, if you are already familiar with FEHB, your move to PSHB will be automatic, meaning you won’t have to deal with too much extra paperwork. However, it’s important to take this transition as an opportunity to evaluate your options to ensure you are selecting the best coverage for yourself and your family.
Key Dates to Remember
- PSHB Open Season: November 11, 2024 — December 9, 2024
- PSHB Launch Date: January 1, 2025
During Open Season, you’ll be able to review and select your health plan for the upcoming year. If you don’t take any action, you’ll be automatically enrolled in a plan that closely matches your current FEHB coverage. That said, Open Season is a crucial window for making any necessary adjustments to your healthcare plan, especially as this will be your first transition into PSHB.
Costs and Contributions Under PSHB
If you’re curious about how much PSHB might cost compared to FEHB, here’s a basic breakdown of what to expect. Although the specifics can vary depending on your individual plan, PSHB premiums are structured similarly to those under FEHB.
For 2025, here are some average total biweekly premium costs:
- Self Only: $397.35
- Self Plus One: $858.89
- Self and Family: $934.65
The government will continue covering a significant portion of the premiums—72% of the total—with employees and retirees responsible for paying the remaining 28%. While these costs are comparable to those under FEHB, it’s worth reviewing your options during Open Season to ensure you’re comfortable with the balance of coverage and out-of-pocket costs.
On an annual basis, the employee contribution amounts to approximately:
- Self Only: $2,892.76
- Self Plus One: $6,252.74
- Self and Family: $6,804.20
This cost structure is designed to offer a balance between comprehensive healthcare coverage and affordability, but it’s always a good idea to carefully assess how these costs fit into your overall budget and healthcare needs.
Integration with Medicare Part B
One major change with the PSHB program relates to Medicare Part B. If you retire on or after January 1, 2025, you will be required to enroll in Medicare Part B when you become eligible (typically at age 65) in order to maintain your PSHB plan. Family members covered under your plan must also enroll in Part B when they become eligible.
However, if you retire before January 1, 2025, and are not already enrolled in Medicare Part B, you won’t be required to enroll in it to maintain your PSHB coverage. There are also a few exceptions for those living outside the U.S., receiving care from the Department of Veterans Affairs (VA), or covered by Indian Health Services (IHS).
In addition, many PSHB plans will offer cost-saving opportunities for those who enroll in Medicare Part B, such as lower out-of-pocket costs, waived deductibles, or even reimbursements for Medicare Part B premiums. This can be a huge benefit in retirement, helping to reduce your overall healthcare expenses.
What Happens to Dental and Vision Coverage?
One thing that won’t change when switching from FEHB to PSHB is your dental and vision coverage. FEDVIP (Federal Employees Dental and Vision Insurance Program) will still be available for USPS employees and retirees, offering benefits such as routine dental exams, cleanings, and prescription eyewear.
However, it’s worth noting that FEDVIP premiums for 2025 will see slight increases:
- Dental premiums will rise by an average of 2.97%.
- Vision premiums will increase by an average of 0.87%.
If you’re enrolled in FEDVIP, you can review and make changes to your dental and vision coverage during Open Season, just as you do with your PSHB plan.
Prescription Drug Coverage and Other Benefits
Under PSHB, Medicare-eligible participants will also have access to Medicare Part D prescription drug coverage. This will be included in your PSHB plan, eliminating the need for separate Part D premiums. You’ll want to review your plan’s formulary to understand how your prescriptions will be covered, but this integration ensures that prescription drug coverage remains seamless.
Also, it’s important to know that enrolling in PSHB will not affect your access to other federal benefits like the Federal Employees’ Group Life Insurance (FEGLI) or the Federal Long Term Care Insurance Program (FLTCIP). Your coverage under these programs remains intact.
Open Season: Your Opportunity to Choose the Right Plan
Open Season is your time to review your healthcare options carefully. With the transition to PSHB, this year’s Open Season holds particular importance. It’s your chance to compare the various plans offered, assess how well they meet your healthcare needs, and make any necessary changes.
Be sure to use the OPM plan comparison tool to explore the available options in detail. This tool will allow you to compare plans based on coverage, cost, and other factors, so you can make an informed choice.
Wrapping It All Up: Why You Should Prepare for Open Season Now
The shift from FEHB to PSHB represents a major change for USPS employees and retirees, and it’s important to be prepared. From understanding how Medicare Part B plays into your future healthcare to reviewing your premium costs and coverage options, there are many moving parts to consider. Use Open Season from November 11 to December 9, 2024, to ensure you’re selecting the right healthcare plan for you and your family.
Remember, this is your opportunity to take control of your healthcare choices and set yourself up for success in 2025 and beyond.
