Key Takeaways

• The Postal Service Health Benefits (PSHB) program has fully replaced FEHB for USPS employees and retirees in 2025, offering integrated Medicare benefits and tailored cost structures.

• While both FEHB and PSHB serve the same purpose—providing health coverage—the shift to PSHB introduces critical differences in eligibility, Medicare requirements, and premium contributions.

Understanding the Shift: FEHB to PSHB

The Federal Employees Health Benefits (FEHB) program served Postal Service employees and retirees for decades. But as of January 1, 2025, a new chapter begins: the Postal Service Health Benefits (PSHB) program is now the mandatory health benefits system for USPS workers, retirees, and eligible family members.

You’re no longer comparing similar options within the same system. PSHB isn’t a simple rebranding. It changes how your health benefits interact with Medicare, how your costs are calculated, and how your plan is structured.

Who Is Affected in 2025

The PSHB applies to the following USPS populations:

• All current career Postal Service employees

• All Postal Service annuitants (retirees)

• Eligible family members of employees and retirees

If you were enrolled in FEHB in 2024 and you fall into one of these groups, you are now automatically transitioned into a corresponding PSHB plan for 2025—unless you made a different election during Open Season.

Key Differences in Eligibility and Participation

Under FEHB, all federal employees—including postal and non-postal—were eligible for the same pool of plans. With PSHB, USPS employees are now part of a separate risk pool and benefits structure. This results in distinct differences:

• PSHB is exclusive to Postal Service employees and retirees.

• Medicare Part B enrollment is required for certain annuitants and family members to remain enrolled in a PSHB plan.

• You must actively enroll in a PSHB plan if you experience a Qualifying Life Event (QLE) or enter the system for the first time.

This means you can no longer compare your coverage directly to non-postal federal employees. Your benefits are tailored specifically to your population’s usage and costs.

Medicare Integration: The Game Changer

One of the most significant changes in PSHB is how your plan interacts with Medicare. Under FEHB, Medicare coordination was optional. Under PSHB in 2025, it’s often mandatory.

You Must Enroll in Medicare Part B If:

• You’re a USPS annuitant (retiree) who turned 65 before 2025 and you weren’t already enrolled in Part B.

• You are a family member who qualifies for Medicare through age or disability.

Exceptions Apply If:

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

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

• You live overseas or are covered by other qualifying federal or tribal healthcare programs.

Why This Matters

Failing to enroll in Medicare Part B when required could result in the loss of your PSHB coverage.

When you do enroll, your plan coordinates with Medicare more efficiently. You’ll generally see:

• Lower copayments

• Waived or reduced deductibles

• Lower out-of-pocket costs for prescriptions

Cost Structures: Premiums, Contributions, and Out-of-Pocket Limits

Under FEHB, premiums varied depending on the plan and were partially offset by the government contribution. That hasn’t changed under PSHB, but the way the costs are structured has.

What Stays the Same:

• The government still pays about 70% of the premium.

• Your premium depends on your plan choice and enrollment type (Self Only, Self Plus One, or Self & Family).

What’s Different in 2025:

• Your PSHB premiums are separate from the FEHB pool, so rates may increase or decrease based on USPS-specific usage data.

• Your out-of-pocket maximums, deductibles, and cost-sharing may differ from prior years—even if your plan name stayed the same.

For instance, many Self Only plans in PSHB now have in-network deductibles ranging from $350 to $1,500, depending on whether it’s a standard or high-deductible option.

Cost-Saving Opportunities with Medicare

If you’re enrolled in both PSHB and Medicare Part B, some plans offer:

• Part B premium reimbursement

• Reduced coinsurance and copayments

• No deductible for Medicare-approved services

Pharmacy Coverage Gets an Upgrade

Another difference you’ll notice in 2025 is in your prescription drug benefits. With the new PSHB structure, Medicare-eligible members are automatically enrolled in an enhanced Medicare Part D plan known as an Employer Group Waiver Plan (EGWP).

This means:

• You’re protected by the new $2,000 annual out-of-pocket cap for prescription drugs

• Insulin is limited to $35/month

• Coverage includes a larger national pharmacy network

This benefit only applies if you are enrolled in Medicare and your PSHB plan includes this EGWP component.

Enrollment and Open Season Rules

You still have the right to change your plan during Open Season, which takes place annually from November to December. Outside of Open Season, you can only make changes if you experience a Qualifying Life Event (QLE) such as:

• Marriage or divorce

• Birth or adoption of a child

• Death of a spouse or dependent

• Loss of other coverage

If you did not select a new PSHB plan during the 2024 Open Season, you were automatically enrolled in the 2025 plan that corresponded most closely to your 2024 FEHB selection.

Choosing a Plan: What You Should Be Comparing Now

Choosing a plan under PSHB requires a new strategy. You’re no longer just comparing premium costs—you need to weigh several factors, especially if Medicare is in play:

• How does the plan coordinate with Medicare?

• What is the deductible and out-of-pocket maximum?

• What are the copayments for chronic care or specialists?

• Does the plan offer Part B reimbursement?

• Are your preferred doctors and hospitals in-network?

These aren’t just fine-print questions—they can directly affect your monthly expenses and the quality of care you receive.

Survivors and Family Members

PSHB coverage can continue for your eligible survivors if:

• You elected a survivor annuity

• They were covered under your plan at the time of your death

Family members who become Medicare-eligible must also meet the Medicare Part B requirement if they want to continue PSHB coverage.

If you are covering a dependent or spouse, make sure they are aware of these requirements. One missed enrollment could cause them to lose coverage entirely.

The Strategic Advantage of PSHB

While change can feel unsettling, PSHB was designed with the long-term health and financial security of Postal Service employees and retirees in mind. It removes the one-size-fits-all approach of FEHB and replaces it with a model better aligned to the needs and demographics of the USPS community.

You gain:

• Plans designed for your unique needs

• Integrated Medicare coverage

• Greater transparency on cost structures

But this also means you must stay proactive. You need to review your plan details every year and pay attention to communications from OPM and your plan administrator.

Making the Most of Your PSHB Benefits

As you transition fully into PSHB, your best strategy is to:

• Review your current plan’s benefits summary

• Compare your plan to other PSHB options each Open Season

• Track your Medicare eligibility and enroll as required

• Ask about coordination benefits like Part B reimbursement or waived deductibles

Health benefits are no longer just about picking a plan and forgetting about it. With PSHB, the more you understand the structure and requirements, the better you can protect your financial and medical future.

Your Next Steps Start Here

Now that PSHB has replaced FEHB for USPS employees and retirees, understanding how these changes affect your health, wallet, and Medicare responsibilities is critical.

Don’t let new rules catch you off guard. Take action now:

• Verify your Medicare enrollment if you’re 65+

• Review your current PSHB plan’s cost-sharing features

• Confirm that family members meet eligibility rules

• Get professional help to compare plans if you’re unsure

For guidance tailored to your situation, get in touch with a licensed agent listed on this website. They can help you avoid common mistakes, understand your plan’s features, and make choices that support your health and retirement security.