Key Takeaways

• The PSHB system is fully in effect as of January 1, 2025, and many postal retirees and employees are just beginning to experience how it differs in practice from FEHB.

• Beyond plan premiums and coverage, key issues such as Medicare integration, prescription drug rules, and out-of-network costs are catching many enrollees by surprise.

What the PSHB Transition Really Means for You

The Postal Service Health Benefits (PSHB) program is no longer a future concern—it’s your current health benefits reality. Since January 1, 2025, every active postal employee and annuitant has officially moved to PSHB, leaving the long-familiar Federal Employees Health Benefits (FEHB) system behind. While much of the transition has been communicated in broad terms, there’s an important layer that remains underdiscussed: how this shift could impact your ongoing care, your access to providers, and even your financial planning.

It’s not just about switching to a new plan. It’s about adapting to a new structure with rules and requirements that operate differently than what you might be used to.

The Medicare Part B Requirement You Can’t Afford to Ignore

For Medicare-eligible annuitants and covered family members, PSHB comes with a new condition: mandatory enrollment in Medicare Part B—unless you meet very specific exemption criteria. If you turned 65 before January 1, 2025, and retired before that same date, you are not subject to this requirement. But for everyone else, failing to enroll could mean losing PSHB coverage.

Here’s what this requirement means for you:

• You must actively enroll in Medicare Part B when first eligible to avoid any coverage issues.

• The PSHB system integrates with Medicare Part B to reduce your out-of-pocket costs, but only if you’re enrolled in both.

• Delays in Part B enrollment could trigger late penalties and leave you with gaps in coverage.

What Has Actually Changed Since FEHB?

While many PSHB plans carry over familiar coverage elements from their FEHB counterparts, several distinctions could affect how you receive and pay for care.

In-Network and Out-of-Network Costs

• Coinsurance rates are often higher for out-of-network services under PSHB—sometimes reaching up to 50%.

• Emergency room and urgent care copayments can also vary more drastically across plans.

Deductibles and Out-of-Pocket Maximums

• In-network deductibles under PSHB range broadly, from $350 to $2,000 depending on plan type.

• Annual out-of-pocket maximums are capped at $7,500 for Self Only and $15,000 for Self Plus One and Self and Family coverage.

Prescription Drug Coverage and the New Part D Structure

If you’re Medicare-eligible, your PSHB prescription coverage is now tied to a Medicare Part D Employer Group Waiver Plan (EGWP). This structure is new for many, and it brings both clarity and confusion.

Key elements include:

• An annual $2,000 out-of-pocket cap on prescription drug spending under Part D.

• Automatic enrollment in the integrated drug plan if you are enrolled in Medicare and PSHB.

• Restrictions on opting out—doing so removes your drug coverage under PSHB entirely.

This EGWP model simplifies coordination with Medicare but creates a rigid structure. You no longer have the flexibility to shop for a standalone drug plan or delay enrollment without consequences.

Timing Your Retirement and Medicare Decisions in 2025

The timing of your decisions now matters more than ever. If you are approaching age 65 or retirement in 2025, there are clear milestones you must meet to protect your healthcare access:

• Initial Enrollment Period for Medicare: This 7-month window surrounds your 65th birthday (3 months before, the month of, and 3 months after).

• Special Enrollment Periods do not apply if you’re simply delaying Medicare while covered under PSHB, unless you qualify for specific exceptions.

• Missed deadlines may lead to late enrollment penalties and potential PSHB disenrollment.

It’s no longer just about when you retire—it’s about aligning Medicare and PSHB timelines correctly.

The Financial Angle: It’s Not Just About Premiums

While PSHB plans are designed to maintain cost-sharing parity with FEHB, your total healthcare spending may still increase if you’re not paying attention to the less visible costs.

These include:

• Medicare Part B premiums, which you are now often required to pay.

• Non-covered services or out-of-network bills, which may not be reimbursed.

• Specialist copays or urgent care visit costs, which vary between plans.

Understanding your plan’s summary is no longer enough. You must look at the full range of cost-sharing obligations, especially if you’re managing multiple chronic conditions or expect frequent specialist visits.

Provider Access: Network Rules Can Be Stricter

One significant change is how provider networks are handled under PSHB. Unlike FEHB, where plans often allowed broad access across federal networks, some PSHB plans may now limit:

• Access to regional hospitals or clinics

• Telehealth or virtual services

• Out-of-network specialists, particularly for complex care needs

Always check if your preferred providers are still in-network, and ask if any prior authorization requirements have been added under PSHB.

What Happens If You’re Living Abroad?

Another often-overlooked topic: how does PSHB handle coverage for annuitants living outside the U.S.?

If you are retired and residing abroad:

• You are generally exempt from the Medicare Part B enrollment requirement.

• Access to care will depend on whether your PSHB plan offers international provider networks or reimbursements.

• You may face higher out-of-pocket costs, and prescription coverage may be more limited.

Be aware that coordination with local health systems is not guaranteed, and you may need to pay upfront and file for reimbursement.

The Fine Print Around Qualifying Life Events (QLEs)

After Open Season, the only times you can change your PSHB plan are during Qualifying Life Events. These include:

• Marriage or divorce

• Loss of other coverage

• Becoming eligible for Medicare

If you’re planning a life change that could affect your healthcare needs, understand the narrow windows PSHB gives you to act.

Miss the QLE window, and you could be locked into a plan that no longer meets your needs until the next Open Season in November.

What You Should Be Doing Now

Now that the PSHB system is operational, your responsibilities have changed. You can no longer rely on outdated assumptions from the FEHB era. Instead, take these steps:

• Confirm your Medicare Part B enrollment status.

• Request and review your PSHB plan brochure. Don’t rely on summaries—read the details.

• Contact your providers to verify if they are still in-network.

• Track your out-of-pocket spending to see if it aligns with what your plan promises.

• Use the annual Open Season period wisely. Even if you’re comfortable now, better options may emerge.

Why It’s Critical to Be Proactive

You don’t want to wait until a claim is denied or a provider refuses service to find out you misunderstood your plan’s details. The PSHB transition isn’t just a formality—it reshapes your health care experience from top to bottom. Your best protection is vigilance.

This Shift Deserves More of Your Attention

The transition to PSHB is more than a switch in plan names. It’s a structural transformation that affects how you manage your healthcare for the rest of your life as a postal employee or retiree. Medicare rules, cost-sharing requirements, and provider access are all evolving under this system.

If you’re uncertain about any of these changes or how they apply to your personal situation, now is the time to get guidance. Reach out to a licensed agent listed on this website to help you sort through the new expectations and benefits. Don’t let uncertainty put your health coverage at risk.