Key Takeaways

• USPS employees and retirees are now part of the new Postal Service Health Benefits (PSHB) Program, which officially replaced FEHB as of January 1, 2025.

• Medicare-eligible retirees and certain family members must enroll in Medicare Part B to maintain PSHB coverage, unless they meet a listed exemption.

A New Chapter for Postal Health Coverage

Starting in 2025, your health benefits as a USPS employee or retiree are no longer part of the Federal Employees Health Benefits (FEHB) Program. Instead, you’ve transitioned to a brand-new system tailored specifically for the postal workforce: the Postal Service Health Benefits (PSHB) Program. This change is a result of the Postal Service Reform Act of 2022, and the aim is to streamline benefits, reduce long-term costs, and integrate Medicare more efficiently for those eligible.

While many of the features and coverage structures may look familiar, there are significant shifts you should be aware of. Understanding these differences can help you make informed choices going forward—whether you’re still working or already retired.

What Is the PSHB Program?

The PSHB Program is a new, separate health benefits system managed by the U.S. Office of Personnel Management (OPM), created exclusively for Postal Service employees, annuitants, and their eligible family members. It mirrors many aspects of FEHB but introduces new requirements and coordination with Medicare.

Here’s what sets it apart:

• PSHB plans are distinct from FEHB and available only to postal workers and retirees.

• All eligible participants had to select a PSHB plan during Open Season from November to December 2024.

• Enrollees are automatically transitioned into a comparable plan if no changes were made.

• Plans are structured similarly to FEHB but come with specific Medicare coordination features.

Who Must Enroll in PSHB?

Enrollment in the PSHB Program is mandatory for:

• Current USPS employees

• USPS retirees (annuitants)

• Eligible family members under the same policy

As of January 1, 2025, all USPS workers and retirees must be enrolled in a PSHB plan to maintain health coverage.

The Medicare Part B Requirement

If you’re a Medicare-eligible USPS retiree or covered family member, you’re now required to enroll in Medicare Part B to continue PSHB coverage—unless you qualify for one of the narrow exemptions:

• You retired on or before January 1, 2025 and are not already enrolled in Part B.

• You are an active USPS employee aged 64 or older as of January 1, 2025.

• You reside outside the U.S. and are not eligible for Medicare.

• You receive health care only through the VA or Indian Health Service.

If none of these exemptions apply, you must sign up for Medicare Part B. Without it, you risk losing your drug coverage and other key PSHB plan features.

Prescription Drug Coverage Through Medicare Part D

One of the biggest changes under the PSHB system is how prescription drug coverage is now handled for Medicare-eligible annuitants:

• You’re automatically enrolled in a Medicare Part D Employer Group Waiver Plan (EGWP) tied to your PSHB plan.

• This new structure includes improved access, a broader network of pharmacies, and an annual out-of-pocket cap of $2,000.

• There’s also a $35 cap for insulin and an option to spread prescription costs over the year through a payment plan.

If you opt out of the Part D plan, you lose drug coverage under your PSHB plan and may not be able to re-enroll later.

Cost Structures and Contributions

While the government continues to cover about 70% of your plan premiums, the amount you contribute depends on the plan you choose and your status (employee vs. retiree). Here’s how it breaks down generally:

• Employees: Contributions are made biweekly through payroll deductions.

• Retirees: Contributions are deducted from annuity payments.

Each PSHB plan sets its own copayments, coinsurance rates, and deductibles, which means costs can vary depending on your usage and provider network.

Benefits of PSHB for Medicare-Enrolled Retirees

If you’re already enrolled in Medicare Part B, you’ll likely benefit from enhanced coordination under PSHB:

• Lower copayments for doctor visits and hospital stays.

• Reduced or waived deductibles in many plans.

• Expanded access to providers accepting Medicare.

• Streamlined processing of claims between Medicare and your PSHB plan.

These features are designed to reduce your out-of-pocket expenses and make healthcare more affordable during retirement.

Timeline of Changes You Should Know

Understanding the transition timeline can help you stay on top of deadlines and responsibilities:

• April to September 2024: Special Enrollment Period (SEP) for Medicare Part B allowed eligible USPS retirees to enroll without penalty.

• November to December 2024: PSHB Open Season—when all eligible employees and annuitants selected their new health plan.

• January 1, 2025: PSHB coverage officially began.

Going forward, Open Season will continue to be your yearly opportunity to switch PSHB plans or make adjustments to your enrollment.

What Happens If You’re Not Medicare-Enrolled?

If you’re eligible for Medicare Part B but haven’t enrolled and you don’t meet the listed exemptions, here’s what you should expect:

• Your PSHB plan may deny certain benefits.

• You’ll lose your integrated prescription drug coverage.

• Your total out-of-pocket costs may increase substantially.

• Re-enrollment options are limited unless you qualify for a future Special Enrollment Period.

This is why it’s crucial to understand your eligibility and take the necessary steps to comply with PSHB requirements.

Accessing the PSHB Program

Depending on whether you’re an employee or annuitant, the tools you use to manage your PSHB enrollment differ:

• Current employees: Use the LiteBlue portal.

• Retirees: Visit KeepingPosted.org to make changes or review plan details.

Customer support is also available through the PSHB Navigator Help Line if you need assistance with plan comparisons, Medicare coordination, or technical issues.

How PSHB Affects Other Benefits

The good news is that the transition to PSHB doesn’t change your eligibility for other federal benefits:

• FEDVIP (vision and dental) continues to be available separately.

• FEGLI (life insurance) remains unaffected.

• FLTCIP (long-term care insurance) remains in place for existing policyholders.

• FSAFEDS (Flexible Spending Accounts) continue for active employees.

You’ll still have access to these programs alongside your PSHB coverage, giving you a broad package of federal benefits.

Steps to Take Right Now

To make sure you’re covered correctly under the new PSHB system, follow these actions immediately:

• Check your Medicare eligibility and enroll in Part B if required.

• Review your PSHB plan details to understand your coverage and costs.

• Verify dependent eligibility to avoid any disruptions in family coverage.

• Plan for Open Season each year to review and make necessary changes.

These small steps can save you from big issues down the line.

What You Should Expect Going Forward

The shift to the PSHB Program marks a major structural change in how USPS health benefits are delivered. As this new system matures, you can expect ongoing improvements, updated plan options, and better coordination with Medicare. Staying informed and proactive will be key to making the most of what’s available.

Your health coverage is a foundational part of your retirement or employment. Don’t leave it up to chance.

Get Clarity and Stay Prepared

Navigating the new PSHB system takes some adjustment, but it ultimately offers more focused and coordinated care—especially for Medicare-eligible retirees. If you’re unsure about your next steps or need help understanding how these changes affect you, get in touch with a licensed agent listed on this website for professional guidance.