Key Takeaways

• Switching from FEHB to PSHB in 2025 brings both new benefits and new obligations, especially if you are Medicare-eligible.

• Careful plan selection during Open Season will be crucial to avoid unexpected gaps or higher out-of-pocket costs.

Understanding the Shift: FEHB to PSHB

In 2025, the Postal Service Health Benefits (PSHB) Program officially replaces the Federal Employees Health Benefits (FEHB) Program for USPS employees, retirees, and eligible family members. This transition is not optional for most. If you are a postal worker or retiree, your health insurance coverage now falls under PSHB. While many elements are designed to feel familiar, several critical differences can affect your healthcare experience and financial planning.

What You Gain With PSHB

Stronger Medicare Integration

If you are Medicare-eligible, PSHB plans generally work better alongside Medicare Part B. Many PSHB plans:

• Offer reduced or waived deductibles when Medicare is primary.

• Lower or eliminate certain copayments for Medicare-enrolled members.

• Automatically integrate prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP).

Enhanced Pharmacy Benefits

The PSHB prescription drug coverage introduces an annual $2,000 cap on out-of-pocket drug costs, which did not exist under FEHB plans. This provides valuable financial protection, especially if you take multiple high-cost medications.

Other pharmacy enhancements include:

• A $35 cap for a month’s supply of insulin.

• Broader pharmacy network access nationwide.

• More predictable drug costs throughout the year.

Familiar Open Season Flexibility

You still retain the ability to review and change plans every year during the Open Season period, which runs from November to December. This means if your health needs evolve, you are not locked into the same plan indefinitely.

Continued Government Contribution

The government continues to contribute about 70% of the premium cost, just as it did under FEHB. This substantial subsidy helps keep premiums more affordable compared to private individual market plans.

What You Might Lose With PSHB

Mandatory Medicare Part B Enrollment

For many annuitants and their covered family members, enrolling in Medicare Part B is now required to maintain full PSHB coverage after becoming eligible for Medicare.

You must:

• Enroll in Part B within your initial eligibility window or

• Provide proof of a valid exception, such as living abroad or being covered under other qualified insurance.

Failure to comply may result in reduced PSHB benefits, particularly for services that Medicare would normally cover.

Limited Plan Choices Compared to FEHB

While PSHB offers a variety of plans, the number of options available may be narrower than what FEHB participants previously enjoyed. Some plans have been consolidated or retired during the transition.

As a result, you might find:

• Fewer regional plan options.

• Limited special features that some FEHB plans previously offered.

No Carryover of Non-PSHB FEHB Plans

If you were enrolled in an FEHB plan that chose not to participate in PSHB, you must select a new PSHB plan during Open Season. Automatic enrollment into a “similar” plan only happens if your previous carrier is participating.

If you do not actively choose and your FEHB plan is unavailable, you risk:

• Being defaulted into a PSHB plan that may not match your previous benefits.

• Losing specific preferred provider relationships.

Potential for Higher Out-of-Pocket Costs

Depending on the PSHB plan you choose, you might face:

• Higher annual deductibles.

• Increased specialist or hospital copayments.

• Less generous coverage for certain services, like durable medical equipment or mental health care.

Evaluating the full Summary of Benefits and Coverage (SBC) for any PSHB plan you are considering is essential.

Key Dates and Deadlines You Need to Know

• April to September 2024: Special enrollment window for Medicare Part B opened for affected USPS retirees and family members.

• November to December 2024: PSHB Open Season allowed you to select your 2025 plan.

• January 1, 2025: PSHB coverage officially began.

• Ongoing Each Year: Annual Open Season for plan changes remains every November-December timeframe.

Staying aware of these dates ensures you maintain seamless health coverage.

Planning Ahead: What to Watch Moving Forward

Mid-Year Benefit Notifications

Starting in 2025, many PSHB plans will issue a “Mid-Year Notification of Unused Benefits.” If you have supplemental benefits you have not used (like dental checkups or wellness incentives), this reminder helps you maximize what your plan offers.

Coordination With Medicare

It’s important to continue coordinating claims between Medicare and PSHB properly:

• Always present both your Medicare and PSHB insurance cards at healthcare visits.

• Verify that providers bill Medicare first, then PSHB second.

Proper coordination avoids unnecessary billing problems and ensures you take full advantage of reduced out-of-pocket costs.

Plan Reviews Each Open Season

Health plans change their benefits annually. Reviewing your PSHB plan details during each Open Season is critical to ensure:

• Your plan still meets your healthcare needs.

• Your preferred doctors and hospitals remain in-network.

• Any new costs or benefit changes are acceptable to you.

Smart Strategies to Manage the Change

• Check Your Medicare Enrollment: If you are approaching 65 or already Medicare-eligible, verify your Medicare Part B status.

• Review Plan Materials Thoroughly: OPM provides detailed plan brochures. Read them carefully rather than relying on summaries.

• Calculate Total Costs: Consider premiums, deductibles, copays, and coinsurance to estimate your total annual costs—not just monthly premiums.

• Call for Clarifications: Reach out to PSHB plan customer service or speak with a licensed insurance agent listed on this website if you have questions.

• Stay Proactive: Mark Open Season and Medicare-related deadlines on your calendar so you do not miss crucial opportunities to adjust coverage.

Preparing for the New Health Coverage Era

The transition to PSHB is one of the biggest changes to postal health benefits in decades. Although it introduces new rules and responsibilities, it also provides stronger integration with Medicare, new pharmacy protections, and continued premium support from the government.

Being proactive is the best way to protect your health and finances in 2025 and beyond. Understand your PSHB plan details, review changes every year, and reach out for help when needed.

If you need assistance navigating your PSHB options, don’t hesitate to get in touch with a licensed insurance agent listed on this website for personalized support.