Key Takeaways

• While PSHB plans offer broad coverage, the fine print may reveal limitations, exclusions, or higher out-of-pocket costs than initially expected.

• Understanding timelines, cost-sharing details, and how PSHB interacts with Medicare is critical before making assumptions about your total coverage.

A Closer Look at What PSHB Claims to Cover

At first glance, Postal Service Health Benefits (PSHB) plans appear to provide extensive coverage. For 2025, many plans advertise low deductibles, broad provider networks, and generous cost-sharing terms. However, the details tucked into the plan brochures and enrollment materials tell a more complex story.

It’s essential to look beyond the headlines of “comprehensive” and “generous” benefits. You need to examine how these benefits apply to real-world situations, especially if you’re Medicare-eligible or expecting to use significant healthcare services in retirement.

Cost-Sharing Terms That May Surprise You

While the PSHB program boasts government contributions covering about 70% of premiums, your share of cost doesn’t end there. Many enrollees don’t realize how copayments, deductibles, and coinsurance rates stack up once services are actually used.

Here are a few examples of the cost-sharing rules that might be overlooked:

• Primary care visits typically involve a copayment ranging from $20 to $40.

• Specialist visits can run higher, often $30 to $60 per visit.

• Urgent care and emergency room services may require $50–$150 out of pocket each time.

• Coinsurance for in-network hospital stays often ranges from 10% to 30%—a major financial consideration for serious illnesses or surgeries.

• Out-of-network services can result in coinsurance as high as 40% to 50%, and some plans do not count these costs toward the out-of-pocket maximum.

These numbers may sound manageable until you factor in the annual deductibles. While low-deductible PSHB plans offer thresholds around $350–$500 for Self Only coverage, high-deductible options can reach $1,500 or more. For Self Plus One or Self and Family coverage, these figures multiply accordingly.

Don’t Overlook the Role of Medicare Part B

A major shift for 2025 is how PSHB integrates with Medicare Part B. For annuitants and family members who are Medicare-eligible, enrollment in Part B is often mandatory to maintain full PSHB benefits—unless you qualify for one of the exceptions.

Failure to enroll in Medicare Part B when required can mean:

• Loss of key cost-sharing advantages such as waived deductibles

• Reduced prescription drug benefits

• Denied claims or restricted coverage in some PSHB plans

If you retired before January 1, 2025, and aren’t enrolled in Part B, you may be exempt from these penalties. But for everyone else, it’s now more important than ever to coordinate your Medicare enrollment with your PSHB plan.

Prescription Drug Coverage Isn’t Always a Seamless Benefit

While PSHB includes prescription coverage through a Medicare Part D Employer Group Waiver Plan (EGWP) for eligible retirees, this doesn’t always guarantee seamless access or predictable costs.

You may experience:

• Formulary limitations – Not all medications are covered, especially newer or brand-name drugs.

• Pharmacy network restrictions – Some plans have preferred networks that limit where you can fill prescriptions affordably.

• Tiered cost structures – Generic drugs may cost less, but specialty drugs could come with coinsurance of 25% or more.

• Annual deductible phase – Some plans start with a deductible of up to $590 in 2025 before full coverage begins.

You’ll also want to ensure you don’t opt into a standalone Part D plan outside PSHB, which could create coverage conflicts or result in duplicate premiums.

The Out-of-Pocket Maximums: Not Always the Safety Net You Think

In 2025, PSHB out-of-pocket maximums for in-network services are capped at $7,500 for Self Only and $15,000 for Self Plus One or Self and Family. While these caps are designed to protect you from excessive costs, there are important caveats:

• These limits often apply only to in-network costs.

• Out-of-network expenses may be subject to separate, higher limits—or might not count at all toward the cap.

• Premiums are not included in these out-of-pocket totals.

• Some services, especially those deemed non-essential or experimental, may not count toward the maximum.

The fine print matters here. If your PSHB plan uses separate categories for medical and pharmacy benefits, you could hit your pharmacy limit long before reaching the medical cap—or vice versa.

Timing Is Everything: Enrollment Periods and Penalties

Another area where PSHB benefits can become less generous is timing. If you miss the appropriate enrollment window, your options may narrow quickly. Here’s what you need to know:

• PSHB Open Season takes place from November through December annually. Outside of this, changes are only permitted during qualifying life events.

• Medicare Special Enrollment Periods (SEPs)—for Part B or Part D enrollment—are limited and depend on very specific circumstances.

• Missing the Part B enrollment window may result in late enrollment penalties that last for life.

Your ability to switch plans, add dependents, or adjust coverage may be governed by rules stricter than those under the old FEHB system. Staying proactive during enrollment windows is crucial.

Medicare Advantage and PSHB Don’t Always Mix

Some retirees consider Medicare Advantage (Part C) as a supplement or alternative to PSHB. However, in 2025, combining these two types of coverage is likely to lead to conflicts or gaps in service.

Issues that may arise include:

• PSHB plans may not coordinate benefits with Medicare Advantage plans.

• You could lose access to your PSHB drug coverage if enrolled in a standalone Advantage plan.

• Some PSHB plans will not pay claims if Medicare Advantage is your primary insurer.

Understanding these conflicts before enrolling is essential. A licensed agent listed on this website can walk you through plan compatibility to avoid costly mistakes.

Additional Benefits Can Be Misleading

PSHB brochures often promote extra benefits such as wellness rewards, telehealth access, or preventive screenings. While these features sound appealing, you should read carefully to understand how and when they apply.

Points to consider:

• Some wellness programs offer rewards only after meeting strict participation criteria.

• Telehealth services may be limited to certain conditions or may come with extra fees.

• Coverage for dental and vision services may be minimal or only available through FEDVIP, not the core PSHB plan.

• Out-of-country care is usually not covered unless it’s an emergency.

Before counting on these extras, make sure they actually meet your needs and that you understand any limits on frequency, provider choice, or dollar amount.

Understand What’s Excluded

No health plan covers everything—and PSHB is no exception. It’s important to know what your plan won’t cover, so you’re not caught off guard later.

Common exclusions include:

• Long-term care services

• Cosmetic procedures

• Experimental or investigational treatments

• Certain types of physical therapy or alternative medicine

• Over-the-counter medications without a prescription

Being aware of these exclusions helps you plan for potential out-of-pocket spending or consider other supplemental options if needed.

Why It Pays to Read Every Line

In 2025, the PSHB transition has added new layers of complexity for annuitants and family members. While the surface-level benefits look attractive, they can be quickly undercut by enrollment rules, cost-sharing loopholes, or lack of coordination with Medicare.

You shouldn’t assume your coverage is comprehensive until you’ve:

• Read the Summary of Benefits and Coverage

• Understood your plan’s formulary and provider network

• Evaluated how your costs change if you access out-of-network care

• Confirmed whether you need Medicare Part B to maintain benefits

What You Should Do Before Making Any Decisions

The PSHB program may be a strong benefit for many postal retirees, but only if you take the time to fully understand what it offers—and what it doesn’t. You should never make assumptions based on promotional materials or summaries alone.

Make sure you:

• Review the complete plan brochure each year

• Track changes during Open Season and respond promptly

• Speak with a licensed agent listed on this website for plan-specific advice

• Coordinate all Medicare enrollment actions before making any plan switches

The extra time you spend reviewing the details can protect you from unexpected costs or denied claims later.

It’s Not Just What’s Covered—It’s How It Works in Practice

There’s no denying that PSHB offers an essential healthcare benefit for retired and active postal employees. But understanding the fine print is what transforms that benefit into real-world protection.

If you’re unsure how to compare your current plan with other PSHB options or how to avoid conflicts with Medicare, don’t go it alone. Get in touch with a licensed agent listed on this website to walk through your situation and get tailored advice before Open Season or your next qualifying event.