Key Takeaways

  • The transition from FEHB to PSHB impacts USPS employees and retirees in several ways, including premium structures, Medicare integration, and coverage options.

  • While many aspects remain familiar, understanding the differences helps you make informed healthcare decisions for 2025 and beyond.

USPS Health Coverage Is Changing—Here’s What You Need to Know

If you’re a USPS employee or retiree, you’ve likely heard about the shift from the Federal Employees Health Benefits (FEHB) Program to the new Postal Service Health Benefits (PSHB) Program. This transition, effective in 2025, marks a significant change in how postal workers and retirees receive healthcare coverage.

With PSHB now in place, it’s important to understand what’s different, what’s staying the same, and how this shift affects your healthcare costs and benefits. While many aspects of FEHB carry over, some fundamental changes may impact your coverage decisions moving forward.

What’s Changing Under PSHB?

1. Separate Health Plan System for USPS Employees

The biggest shift is that USPS employees and retirees now have their own health benefits program. While FEHB covered all federal employees, PSHB is exclusively for USPS workers and retirees, creating a distinct system tailored to postal service needs.

This separation allows PSHB to be structured specifically for USPS employees, ensuring that plan options, cost structures, and benefits are aligned with postal workers’ needs. However, this also means fewer plan choices than FEHB had previously offered to the broader federal workforce.

2. Medicare Part B Enrollment Requirement

If you are a USPS retiree or a family member covered under your plan and you are eligible for Medicare, you may now be required to enroll in Medicare Part B to maintain PSHB coverage. This rule applies to those retiring after January 1, 2025, with some exceptions.

  • Who must enroll? Retirees and covered family members eligible for Medicare.

  • Who is exempt? If you retired before January 1, 2025, and were not already enrolled in Part B, you are not required to sign up.

  • Why this matters? Medicare Part B enrollment affects your overall healthcare costs and coverage options under PSHB, making it essential to plan for future expenses.

3. Prescription Drug Coverage Changes

PSHB includes an integrated Medicare Part D prescription drug plan for Medicare-eligible enrollees. This means that if you have Medicare, your prescription drug coverage will be coordinated through PSHB’s Medicare Part D plan rather than through a separate provider.

  • Lower out-of-pocket drug costs with the new $2,000 cap on annual prescription expenses.

  • Automatic enrollment in a Medicare Part D Employer Group Waiver Plan (EGWP) if you are eligible.

  • Improved access to prescription medications through enhanced pharmacy networks and negotiated rates.

4. Premiums and Cost-Sharing Adjustments

While the federal government continues to cover about 70% of your health insurance premium, USPS employees and retirees may see adjustments in their cost-sharing responsibilities under PSHB. These changes depend on the plan you select and whether you have Medicare.

  • Deductibles, copayments, and coinsurance may differ from FEHB plans.

  • Some PSHB plans offer reduced or waived deductibles for those enrolled in Medicare Part B.

  • Employees and retirees should review plan costs during Open Season to avoid unexpected expenses.

What’s Staying the Same?

1. Continued Coverage for Current Employees and Retirees

USPS employees and retirees still have access to employer-sponsored health insurance, just through PSHB instead of FEHB. You won’t lose your coverage—you just need to transition to a new plan.

2. Government Contribution to Premiums

Just like FEHB, the federal government continues to pay a significant portion of your health insurance premium, ensuring that healthcare remains affordable for USPS employees and retirees.

3. Access to Nationwide and Regional Plans

PSHB continues to offer a variety of plan options, including nationwide coverage and regional plans. You still have choices when selecting a plan that fits your healthcare needs and budget.

4. Annual Open Season for Plan Changes

The Open Season for USPS employees and retirees remains in place, allowing you to review your options and make changes to your coverage each year. This occurs from November to December, just like FEHB did in the past.

How PSHB Affects Different Groups

For Current USPS Employees

  • You’ll need to transition to a PSHB plan during Open Season.

  • Your employer contributions remain the same as they were under FEHB.

  • If you retire in the future and qualify for Medicare, you’ll be required to enroll in Medicare Part B to maintain PSHB coverage.

  • You will need to evaluate plan choices annually to optimize coverage and costs.

For USPS Retirees Without Medicare

  • If you retired before January 1, 2025, and aren’t enrolled in Medicare Part B, you can keep PSHB coverage without needing to sign up for Medicare.

  • Your plan premiums and benefits may differ from what you had under FEHB.

  • It’s essential to check for any changes in out-of-pocket costs, especially for prescriptions and specialist visits.

For USPS Retirees With Medicare

  • If you are already enrolled in Medicare Parts A and B, PSHB may reduce your out-of-pocket healthcare costs by coordinating benefits.

  • You’ll be automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) for prescription drug coverage.

  • Medicare and PSHB integration may offer financial advantages, including premium reimbursements and lower cost-sharing on medical expenses.

Key Deadlines and Action Steps

  • 2025 Open Season (November–December) – Review your PSHB plan options and make necessary changes.

  • Medicare Part B Enrollment for Future Retirees – If retiring after January 1, 2025, sign up for Part B to maintain PSHB coverage.

  • Prescription Drug Plan Enrollment – Medicare-eligible retirees will automatically be enrolled in PSHB’s Part D plan.

  • Annual Plan Review – Compare coverage each year to ensure your plan continues to meet your healthcare needs.

Preparing for the Transition

With these changes taking effect in 2025, it’s essential to stay informed and take action to ensure you have the right coverage. Here are some steps to prepare:

  • Review Plan Details – Compare PSHB plans to find the best fit for your healthcare needs and budget.

  • Check Medicare Enrollment Requirements – If you are nearing retirement, understand how Medicare enrollment affects your PSHB coverage.

  • Evaluate Prescription Drug Coverage – If you take regular medications, ensure your new plan provides adequate coverage.

  • Plan for Open Season – Mark your calendar for November–December to review and update your health insurance plan.

  • Consult a Benefits Specialist – Speak with an expert to navigate your options and understand how PSHB impacts your healthcare expenses.

Make an Informed Decision About Your Healthcare

Understanding the differences between FEHB and PSHB is essential for ensuring you maintain the right healthcare coverage as a USPS employee or retiree. While some aspects remain the same, new Medicare integration rules and changes in cost-sharing can impact your healthcare expenses.

If you have questions about how PSHB affects your benefits, speak with a licensed agent listed on this website to get expert guidance on choosing the best plan for your needs.