Key Takeaways

• Your paycheck contribution toward PSHB only covers part of your health plan—government contributions and cost-sharing elements like copayments and coinsurance fill in the rest, but at a price.

• Many costs remain invisible until you use services; your paycheck deduction doesn’t shield you from surprise bills, out-of-network charges, or prescription limits.

The Basics of What Your Paycheck Covers

When you see the PSHB deduction on your USPS paycheck, it’s easy to assume you’re paying for your full health coverage. But that deduction is only part of a shared-cost model. In 2025, the federal government covers about 70% of the total premium. You pay the remaining 30%, which is deducted biweekly from your paycheck.

This contribution depends on the coverage type:

• Self Only

• Self Plus One

• Self and Family

These amounts vary depending on your plan choice and whether you’re active or retired. For retirees, the premium share is still deducted from annuity payments.

What Your Deduction Doesn’t Cover: The Real Out-of-Pocket Picture

Even after your paycheck deduction, PSHB comes with other expenses. These are the often-overlooked or underestimated costs:

1. Deductibles

Before your plan starts covering services, you may need to meet an annual deductible. In-network deductibles in 2025 range from $350 to $2,000 depending on whether you’re in a low or high-deductible plan. Out-of-network deductibles can be significantly higher.

2. Copayments

Copayments are flat fees you pay when receiving certain types of care:

• Primary care visits: typically $20–$40

• Specialist visits: typically $30–$60

• Urgent care: $50–$75

• Emergency room: $100–$150

These costs accumulate quickly if you have chronic conditions or multiple appointments in a year.

3. Coinsurance

Coinsurance is a percentage of the cost you share with the plan after your deductible is met. For example:

• In-network: 10% to 30%

• Out-of-network: up to 50%

Coinsurance often applies to imaging services, hospital stays, and surgeries.

4. Prescription Drug Costs

Most PSHB plans use a tiered pharmacy system. Even though your paycheck contribution includes drug coverage, out-of-pocket costs can still vary:

• Generic medications: lower copays

• Preferred brands: moderate copays or coinsurance

• Specialty medications: higher coinsurance rates

In 2025, prescription drug costs under Medicare Part D (integrated with PSHB) are capped at $2,000 per year—but only for Medicare-eligible annuitants. If you’re not enrolled in Medicare, these caps may not apply.

What the Government Covers for You

It’s worth understanding what you don’t pay for directly from your paycheck. The government contribution—about 70% of the plan’s total cost—is a major financial benefit. This contribution continues for eligible retirees as long as they remain enrolled.

Still, that contribution only applies to the premium, not the cost-sharing elements like:

• Deductibles

• Copayments

• Coinsurance

• Non-covered services

And while PSHB plans generally offer comprehensive benefits, your share of the cost still rises with increased utilization.

Retirees: Premium Deductions Work Differently

If you’re a retired postal worker, your PSHB premiums are deducted from your annuity rather than your paycheck. In 2025, annuitant shares of the premium are:

• Around $241/month for Self Only

• Around $521/month for Self Plus One

• Around $567/month for Self and Family

These figures may fluctuate depending on the plan selected, but your financial responsibility doesn’t end with these payments. Copayments, coinsurance, and deductibles still apply just as they do for active employees.

The Hidden Costs You Might Not See Coming

PSHB plans are designed to cover a broad spectrum of medical needs, but even with good coverage, some expenses can still sneak up on you:

Out-of-Network Surprises

Even if your plan has generous in-network coverage, using an out-of-network provider can significantly raise your costs. You may face:

• Higher deductibles

• Higher coinsurance rates

• Balance billing (paying the difference between provider charge and plan allowance)

Tier Shifts in Medications

A drug you regularly use might move to a higher tier without notice during the year. This means more out-of-pocket costs, even if you’re staying within your preferred pharmacy.

Cost Accumulation Without You Realizing

Multiple visits to physical therapy, mental health counseling, or lab testing might each come with their own copayment. It might not feel burdensome at first, but after ten or twenty visits, it can add up.

Additional Contributions That Come Out of Your Paycheck

Beyond premiums, your paycheck may also reflect deductions for other benefits that tie into healthcare:

• Flexible Spending Accounts (FSAs): Allow you to set aside pre-tax dollars, but must be elected annually.

• FEDVIP: For dental and vision coverage, deducted separately.

• FEGLI: Life insurance, which becomes more expensive with age.

While these are optional, they often interact with your overall health coverage and total cost burden.

Medicare and PSHB: A Cost-Sharing Shift for Eligible Retirees

If you’re eligible for Medicare and still enrolled in a PSHB plan, your coverage may be more generous—but only if you are enrolled in both Medicare Part A and Part B. In 2025, some PSHB plans:

• Waive deductibles for Medicare-enrolled members

• Offer Part B premium reimbursements

• Reduce coinsurance and copayments significantly

However, this only applies to Medicare-eligible annuitants who actually enroll in Part B. If you opt out of Part B, your cost-sharing burden could remain high.

How Much Should You Budget Annually?

To understand your real health care cost in 2025, consider adding up:

• Your biweekly premium deductions

• Expected copayments for visits, prescriptions, and therapies

• Coinsurance for major services

• Any deductible amounts

• Unexpected out-of-network charges

• Contributions to FSAs, dental, vision, and life insurance

A realistic budget should anticipate at least $3,000 to $6,000 annually in out-of-pocket costs, depending on plan use and family size.

The Annual Cost Isn’t Just About Usage

Even if you rarely use your plan, you’re still contributing every pay period. That money goes toward a pool that funds access for everyone in the program, ensuring:

• Preventive care is available without copays

• Emergency coverage is accessible when needed

• Major illnesses don’t bankrupt enrollees

So while it might feel like you’re paying “too much” during healthy years, the protection is essential and valuable long-term.

Staying Proactive With Plan Costs

You can control some of these hidden costs by taking a more active role in your plan decisions:

• Review your Explanation of Benefits (EOB) after every service

• Stay in-network whenever possible

• Compare pharmacy options to reduce medication costs

• Use preventive services, which are usually covered in full

• Update FSA elections based on past year’s spending

Why Your Paycheck Deduction Is Just the Beginning

Understanding what your paycheck actually covers in PSHB is key to avoiding financial surprises. Your deduction goes further than you might think—but it also doesn’t go all the way. Behind the scenes, hidden costs, usage-based charges, and coverage conditions affect what you truly pay over time.

It’s worth taking time during each Open Season to compare plan options, especially if your health needs have changed. And when in doubt, get help from someone who knows the ins and outs.

Talk to Someone Who Can Help

If you’re unsure whether your current PSHB plan fits your health and financial needs, don’t wait until the bills pile up. Speak with a licensed agent listed on this website to get personalized guidance on how to balance paycheck deductions with real-world costs.