Key Takeaways

  • The Postal Service Health Benefits (PSHB) Program replaces FEHB for USPS workers and retirees starting January 1, 2025.

  • Medicare Part B enrollment is now required for many Medicare-eligible USPS annuitants and family members to keep PSHB coverage.

Understanding the Shift to PSHB in 2025

As of January 1, 2025, the Postal Service Health Benefits (PSHB) Program officially replaces the Federal Employees Health Benefits (FEHB) Program for all eligible United States Postal Service (USPS) employees, annuitants, and their family members. This shift, mandated by the Postal Service Reform Act of 2022, creates a USPS-specific health benefits system administered by the Office of Personnel Management (OPM).

You may have relied on FEHB for years. Now, the PSHB brings some important changes—especially if you’re retired or nearing retirement. Here’s how it may affect your healthcare planning in 2025 and beyond.

Who Is Covered Under the PSHB Program?

The PSHB Program covers:

  • Current USPS employees

  • USPS retirees (annuitants)

  • Eligible family members, including spouses and dependents

Even if you’re currently covered under a family member’s FEHB plan, you must transition to PSHB if you are a USPS employee or annuitant. Coverage under PSHB began on January 1, 2025, and replaces FEHB for all USPS-related enrollees.

Those Who Are Not Required to Switch

Not everyone is automatically required to change plans. You are exempt from moving to PSHB if:

  • You’re a non-USPS federal employee or retiree.

  • You’re a family member of a non-USPS enrollee under FEHB.

  • You’re not listed as a USPS annuitant or eligible dependent.

Medicare Part B Requirement: What You Need to Know

One of the biggest differences between FEHB and PSHB is the new Medicare Part B requirement for certain retirees and their family members.

Who Must Enroll in Part B?

If you are Medicare-eligible and:

  • Retired after January 1, 2025

  • Aged 64 or younger as of January 1, 2025

  • Not already enrolled in Part B

Then you must enroll in Medicare Part B to keep your PSHB coverage once you become eligible for Medicare.

Who Is Exempt?

You are not required to enroll in Medicare Part B if:

  • You retired on or before January 1, 2025

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

  • You reside outside the United States

  • You receive care through Indian Health Services (IHS) or the Department of Veterans Affairs (VA)

Open Season and Enrollment Process

The PSHB Open Season for 2025 ran from November to December 2024. During this period, USPS employees and annuitants selected a new PSHB plan or were automatically enrolled in a plan similar to their former FEHB coverage.

If you didn’t actively select a plan during Open Season, you were defaulted into a PSHB plan that most closely matched your previous FEHB coverage.

What If You Need to Make Changes Now?

After Open Season, you can only make changes to your plan if you experience a Qualifying Life Event (QLE)—such as marriage, divorce, birth of a child, or a move to a different service area.

You’ll need to use the proper enrollment platform:

  • Active employees use LiteBlue.

  • Retirees (annuitants) use KeepingPosted.org.

What Happens to Your Prescription Coverage?

The PSHB Program integrates prescription drug coverage differently for those enrolled in Medicare.

If you are enrolled in both PSHB and Medicare Part B, your plan will automatically include a Medicare Part D prescription drug plan through an Employer Group Waiver Plan (EGWP).

Key Features of Integrated Prescription Coverage:

  • No donut hole: The coverage gap under Medicare Part D is eliminated.

  • $2,000 annual out-of-pocket cap for prescription drugs as of 2025.

  • $35 insulin cap for monthly supplies.

  • Expanded pharmacy networks, including preferred and standard options.

If you choose to opt out of the Part D EGWP coverage, you will lose all prescription drug coverage under PSHB and may only re-enroll in limited circumstances.

PSHB Plan Options and Cost Considerations

All PSHB plans meet Affordable Care Act (ACA) standards and offer comprehensive medical and prescription drug coverage. While plan options and premiums vary, here are some general considerations:

Common Cost Features:

  • In-network deductibles: Range from $350 to $2,000 depending on the plan.

  • Out-of-pocket maximums: Capped at $7,500 for Self Only and $15,000 for Self Plus One or Family.

  • Government contribution: Covers roughly 70% of total premium costs.

These figures apply to the PSHB in general and will vary slightly depending on the plan you select. If you’re retired, your monthly contribution is typically deducted from your annuity.

Coordination With Medicare: Why It Matters

If you’re enrolled in both PSHB and Medicare Parts A and B, you benefit from coordination of benefits. In most cases:

  • Medicare pays first

  • Your PSHB plan pays second

This means:

  • Lower out-of-pocket costs

  • Reduced or waived deductibles and coinsurance

  • Fewer copayments for services like primary care or specialist visits

Some PSHB plans even offer partial reimbursement for Medicare Part B premiums, though this varies. Review your plan’s brochure carefully.

Important Timelines and Action Steps

To ensure continued health coverage and avoid penalties, keep these 2025 milestones in mind:

  • January 1, 2025: PSHB officially begins

  • April to September 2024: Special Enrollment Period (SEP) for eligible retirees to enroll in Medicare Part B

  • November to December 2024: Open Season for selecting a PSHB plan

  • Ongoing: Changes allowed only during QLEs

If you are eligible for Medicare and haven’t enrolled in Part B, you’ll need to wait for the next General Enrollment Period or qualify for a new SEP to sign up.

Impact on Other Federal Benefits

The PSHB Program affects only your health insurance. Other federal benefits remain unchanged:

  • FEDVIP (Federal Employees Dental and Vision Insurance Program) is still available.

  • FEGLI (Federal Employees Group Life Insurance) is unaffected.

  • FLTCIP (Federal Long Term Care Insurance Program) is unchanged.

  • FSAFEDS (Flexible Spending Accounts) continues as usual for active employees.

You don’t need to re-enroll in any of these benefits just because of the PSHB change.

What to Do Next If You Haven’t Taken Action

If you haven’t reviewed your PSHB plan or Medicare status:

  1. Log in to your enrollment portal: LiteBlue for employees, KeepingPosted.org for annuitants.

  2. Review your current PSHB plan: Confirm whether it suits your needs.

  3. Check your Medicare enrollment: Make sure you’re in compliance if you’re required to be enrolled in Part B.

  4. Look at prescription drug coverage: Understand how it integrates with your medical plan.

  5. Contact a licensed agent on this website for tailored support.

Getting Clarity on the PSHB Program in 2025

The transition to PSHB is one of the most significant benefits changes for USPS workers and retirees in recent years. Whether you’re approaching retirement or already receiving annuity payments, understanding your plan options and Medicare requirements is essential to protecting your healthcare.

Take the time to explore how PSHB interacts with your existing coverage. Reach out to a licensed agent listed on this website if you need help choosing a plan, understanding Medicare requirements, or managing your benefits effectively.