Key Takeaways:

  • The Postal Service Health Benefits (PSHB) program provides healthcare coverage tailored for USPS employees, annuitants, and their families, replacing the Federal Employees Health Benefits (FEHB) Program starting in 2025.

  • Understanding PSHB costs, government contributions, and your potential out-of-pocket expenses can help you make informed decisions about your healthcare coverage.

Understanding PSHB Costs and Contributions in 2025

If you’re a USPS employee or retiree, the transition to the Postal Service Health Benefits (PSHB) program is a big shift in your healthcare coverage. Since its rollout in 2025, PSHB has replaced the Federal Employees Health Benefits (FEHB) Program specifically for postal workers. While many aspects remain familiar, there are some key financial differences you should be aware of.

Navigating the ins and outs of PSHB costs can feel overwhelming, but breaking it down into manageable parts makes it easier. From premiums and government contributions to deductibles and copayments, here are five essential facts you need to know to make the most of your PSHB plan.

1. Your Premiums Depend on Plan Selection and Enrollment Type

Premiums are one of the most significant factors when choosing a PSHB plan. These are the monthly costs you pay to maintain your health insurance coverage. While premium amounts vary depending on the plan you select, they are also influenced by factors such as:

  • Self Only, Self Plus One, or Self and Family Enrollment: Your premium costs will differ based on whether you’re covering just yourself, one additional family member, or your entire household.

  • Government Contribution: The federal government covers a significant portion of the premium cost—typically around 70%—helping to reduce your out-of-pocket expenses.

  • Medicare Coordination: If you’re an annuitant enrolled in Medicare Part B, some PSHB plans may offer premium reductions or additional cost savings.

Since premium rates adjust annually, reviewing them each year during Open Season ensures that you remain on the most cost-effective plan for your needs.

2. Government Contributions Lower Your Healthcare Costs

One of the biggest advantages of PSHB is the government’s contribution toward your healthcare costs. Just like FEHB, the federal government continues to pay about 70% of your total premium costs, reducing the financial burden on employees and retirees.

However, you are still responsible for covering your share of the premium, which varies based on your plan selection and family size. If you are an active USPS employee, these costs are deducted from your paycheck. Retirees pay their portion through automatic deductions from their federal annuity.

3. Deductibles and Out-of-Pocket Maximums Vary by Plan

A deductible is the amount you must pay out-of-pocket for covered medical services before your plan starts covering a portion of the costs. Deductibles can vary significantly depending on the plan you choose:

  • Low-deductible plans: Generally range from $350 to $500 for individual coverage.

  • High-deductible plans: Can be $1,500 or more, but may include Health Savings Account (HSA) options.

Once you meet your deductible, you’ll still be responsible for copayments and coinsurance, but your overall costs will be lower. Additionally, every PSHB plan has an out-of-pocket maximum, which is the most you’ll pay for covered services within a plan year. For 2025, these maximums are:

  • $7,500 for Self Only plans

  • $15,000 for Self Plus One and Self & Family plans

After reaching this cap, your plan will cover 100% of covered medical expenses for the remainder of the year.

4. Copayments and Coinsurance Affect Your Day-to-Day Healthcare Expenses

Beyond premiums and deductibles, your copayments and coinsurance will determine how much you spend on doctor visits, prescriptions, and medical procedures:

  • Copayments: A fixed amount you pay per visit or service (e.g., $20-$40 for a primary care visit, $100-$150 for an emergency room visit).

  • Coinsurance: A percentage of the total cost you must cover for a service (e.g., 10%-30% for in-network care, 40%-50% for out-of-network care).

Understanding these costs is crucial because they impact how much you pay each time you receive medical treatment. Some PSHB plans offer lower copayments and coinsurance rates for those enrolled in Medicare Part B, making coordination with Medicare an essential factor for retirees.

5. Medicare Enrollment Can Reduce Costs for Annuitants

If you are retired or nearing retirement, Medicare enrollment plays a significant role in your PSHB costs. Many plans offer financial incentives for Medicare-eligible retirees who enroll in Medicare Part B, such as:

  • Waived or reduced deductibles

  • Lower copayments and coinsurance

  • Reduced out-of-pocket maximums

  • Enhanced prescription drug coverage

Additionally, if you or a covered family member is Medicare-eligible, you’ll automatically receive prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). This plan replaces your standard PSHB drug coverage and includes the new $2,000 out-of-pocket cap for prescription drugs under Medicare Part D, providing significant savings for those who require expensive medications.

Making the Most of Your PSHB Benefits

To maximize your PSHB benefits and minimize costs, consider the following steps:

  • Review Plan Options During Open Season: Each year, the PSHB Open Season runs from November 11 to December 13. Use this time to compare plans and adjust your coverage as needed.

  • Understand How Medicare Affects Your Costs: If you’re an annuitant, enrolling in Medicare Part B could lead to lower out-of-pocket expenses, but you’ll need to weigh the additional premium costs.

  • Use In-Network Providers: Most plans offer lower copayments and coinsurance for services received within their network, reducing overall healthcare spending.

  • Monitor Prescription Drug Coverage: The new $2,000 out-of-pocket cap for Medicare Part D enrollees can provide significant savings, but make sure your medications are covered under your chosen plan.

  • Take Advantage of Wellness Programs: Many PSHB plans include wellness incentives, such as preventive screenings at no cost, fitness benefits, and chronic disease management programs.

Get Help Choosing the Right PSHB Plan

Selecting the right PSHB plan is a big decision that impacts both your finances and healthcare access. To make the most informed choice, connect with a licensed agent listed on this website. They can help you compare plans, understand cost differences, and ensure you enroll in the best coverage for your needs.