Key Takeaways

• Switching from FEHB to PSHB in 2025 brings structural and financial changes, but some legacy assumptions from FEHB still cause confusion if you don’t look closely at the plan details.

• Medicare-eligible retirees face different coordination requirements with PSHB, including mandatory Part B enrollment in many cases.

What the PSHB Shift Actually Means

The transition from the Federal Employees Health Benefits (FEHB) Program to the Postal Service Health Benefits (PSHB) Program officially takes effect on January 1, 2025. If you are a USPS employee, annuitant, or eligible family member, your health coverage now comes under the PSHB umbrella. While much of the basic structure remains familiar, several underlying changes can catch you off guard.

Understanding the key differences between FEHB and PSHB helps you avoid costly assumptions and take full advantage of your new coverage.

Who This Shift Affects

The PSHB program applies to:

• All USPS employees

• USPS annuitants (retirees)

• Eligible family members of USPS employees and annuitants

If you are currently enrolled in FEHB under a USPS role, your enrollment automatically shifts to a corresponding PSHB plan unless you actively choose a different plan during Open Season.

You are not affected by this transition if:

• You are a federal employee or annuitant who is not connected to USPS

• You are a non-postal federal employee covered under FEHB

What Remains the Same

It helps to begin by identifying what has not changed between FEHB and PSHB. This gives you a sense of continuity in the new program:

• Plan structures still include Self Only, Self Plus One, and Self & Family enrollment types.

• Government contributions still cover a significant portion of your premium.

• Open Season continues to run each year from November to December.

• Eligible family members (spouses and children) remain the same.

• Benefit types such as preventive care, specialist visits, emergency services, and mental health support remain covered.

However, the way these benefits are delivered and coordinated, especially with Medicare, can differ significantly.

Key Differences That Matter in 2025

1. Medicare Part B Enrollment Rules

This is one of the biggest changes affecting USPS annuitants and their family members who are Medicare-eligible. For most of these individuals, enrolling in Medicare Part B is now a requirement to maintain PSHB coverage.

Who must enroll:

• Annuitants and eligible family members who are Medicare-eligible and retired after January 1, 2025

Who is exempt:

• Those who retired on or before January 1, 2025

• Employees aged 64 or older as of January 1, 2025

• Individuals living abroad

• Those with qualifying VA or Indian Health Services coverage

Failing to enroll in Part B when required can result in the loss of your PSHB plan. This is a sharp departure from FEHB, where Part B enrollment was optional.

2. Prescription Drug Coverage Now Includes Part D

If you’re Medicare-eligible and enrolled in both PSHB and Medicare Part B, your prescription drug coverage is handled differently under the PSHB system. PSHB plans automatically enroll you in a Medicare Part D Employer Group Waiver Plan (EGWP).

Key changes:

• You cannot be separately enrolled in another Part D plan.

• You receive coverage through the integrated EGWP.

• There’s an annual out-of-pocket cap of $2,000 on prescription drugs starting in 2025.

• Insulin costs are capped at $35 per month.

This differs from FEHB, where Medicare-eligible enrollees didn’t have integrated Part D coverage and often had to compare multiple stand-alone Part D options.

3. Plan Availability Is Different

Not every FEHB plan previously available to you remains available under PSHB. Some plans opted out of participating in PSHB entirely, and others have restructured offerings.

During the 2024 Open Season (November to December), many enrollees discovered that their previous FEHB plan either no longer existed under PSHB or had significantly changed. If you didn’t actively choose a plan, you were automatically enrolled in a similar plan, but the benefits and network might not be identical.

It is vital to review plan brochures annually and compare:

• Provider networks

• Copay and coinsurance changes

• Out-of-pocket maximums

• Medicare coordination policies

4. Cost-Sharing Arrangements Can Be Surprising

PSHB plans continue to include copayments, coinsurance, and deductibles. However, many enrollees find the cost-sharing amounts different from what they were used to under FEHB.

For example:

• Coinsurance for in-network care typically ranges from 10% to 30%, but can go as high as 50% out-of-network.

• Deductibles vary more widely now, with low-deductible PSHB plans charging between $350 and $500 for in-network services.

• Out-of-pocket maximums are higher than many expect: up to $7,500 for Self Only and $15,000 for Self Plus One or Self & Family.

These figures make it especially important to plan ahead if you anticipate specialist visits, surgeries, or chronic care in the coming year.

5. Coordination with Medicare Has More Structure

Unlike the looser coordination under FEHB, PSHB plans are designed to work more closely with Medicare. If you are enrolled in both Medicare Part A and B, many PSHB plans offer:

• Waived deductibles

• Lower coinsurance rates

• Reimbursements for Medicare Part B premiums (in some cases)

• Expanded pharmacy networks

If you are not enrolled in Part B when required, you may lose access to these cost-saving features. That makes Medicare coordination a much more critical factor in 2025 than it was under FEHB.

What You Must Actively Monitor

Open Season Behavior

Open Season for PSHB remains each year from November through early December. But now, if you don’t take action, you may default into a plan that looks similar but performs differently. You must actively:

• Review your plan’s benefits and provider directories

• Confirm Medicare coordination features

• Consider future health needs before sticking with the default

Special Enrollment Periods

In 2024, a one-time Special Enrollment Period ran from April 1 to September 30 for those needing to enroll in Medicare Part B. Moving forward, you must follow the standard Medicare enrollment periods unless another qualifying life event occurs.

If you miss your opportunity, you could face late enrollment penalties or even lose eligibility for PSHB coverage altogether.

PSHB and Other Federal Benefits

The transition to PSHB does not affect your eligibility for:

• FEDVIP (dental and vision plans)

• FEGLI (life insurance)

• FSAFEDS (Flexible Spending Accounts)

• FLTCIP (long-term care insurance)

However, you must still manage these benefits separately. Enrollment in PSHB does not automatically update or link to these other programs.

Potential Pitfalls If You Assume Nothing Changed

Failing to adapt to the structural shifts in PSHB can lead to consequences such as:

• Being auto-enrolled in a plan with different network providers or higher cost-sharing

• Losing drug coverage if you opt out of the integrated Part D EGWP

• Facing late penalties for Medicare Part B

• Paying higher out-of-pocket costs due to unfamiliar deductibles and coinsurance levels

• Missing premium reimbursements or waived cost-sharing if you delay Medicare enrollment

What to Do Before Your Next Plan Year Begins

To protect your wallet and your access to care, make sure to:

• Read your Annual Notice of Change (ANOC)

• Compare PSHB plan brochures and Summary of Benefits

• Confirm Medicare enrollment requirements

• Evaluate your health and prescription needs for the next 12 months

• Speak with a licensed agent listed on this website if you’re unsure which PSHB plan aligns best with your circumstances

Navigating Your PSHB Transition Confidently

While PSHB retains the familiar structure of FEHB, the differences are significant enough to require a fresh, informed approach. Medicare coordination, cost-sharing amounts, and prescription drug integration are all areas where a passive approach could cost you more.

By taking time to explore your options during Open Season and understanding what rules apply to your retirement status and Medicare eligibility, you set yourself up for better financial and health outcomes in 2025 and beyond.

For personalized guidance, get in touch with a licensed agent listed on this website. They can help you assess your coverage, understand coordination with Medicare, and ensure you’re not caught off guard by overlooked changes.