Key Takeaways

• The Postal Service Health Benefits (PSHB) Program, effective in 2025, is not a minor administrative change but a complete departure from the Federal Employees Health Benefits (FEHB) structure, bringing significant differences in eligibility, Medicare requirements, and plan design.

• Understanding PSHB’s mandatory Medicare Part B enrollment and automatic prescription drug integration is critical for retirees and their families to avoid unexpected coverage loss or financial strain.

What PSHB Actually Replaces—and Why It Matters

You might have heard that the PSHB Program simply replaces FEHB for USPS employees and retirees starting in 2025. While that’s technically true, the reality is that PSHB introduces a different framework altogether. It’s built under a separate law and is managed distinctly from the rest of the federal employee health system.

This isn’t just a name change. If you’re used to how FEHB worked for decades, many of those rules no longer apply under PSHB.

Who’s In, Who’s Out: New Eligibility Rules

The PSHB Program specifically covers:

• Active USPS employees

• USPS annuitants (retirees)

• Eligible family members of the above

But unlike FEHB, PSHB does not cover:

• Active or retired federal employees outside of USPS

• Survivors of USPS retirees unless survivor annuity and proper enrollment type were elected

• Anyone not explicitly recognized under USPS eligibility

This distinction means that if you previously received FEHB coverage through a family member who worked for a different federal agency, you are not eligible for PSHB unless you meet USPS-specific criteria.

Enrollment Timelines You Can’t Miss

PSHB officially takes effect January 1, 2025. However, critical events occurred leading up to that date:

• Special Enrollment Period (SEP) for Medicare Part B: Ran from April 1 to September 30, 2024. This was your chance to enroll in Part B penalty-free if required under PSHB rules.

• Open Season for PSHB: Occurred from November to December 2024. This was when eligible individuals selected their 2025 PSHB plans.

If you didn’t take action during these windows and were required to, your options in 2025 may now be limited unless you experience a Qualifying Life Event (QLE).

Mandatory Medicare Part B Enrollment Isn’t Just a Suggestion

One of the most important—and most disruptive—changes is that many PSHB enrollees must enroll in Medicare Part B to maintain full coverage.

This applies to:

• Annuitants and their family members who are Medicare-eligible

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

Failure to enroll in Medicare Part B when required can result in a loss of access to PSHB coverage or key benefits such as prescription drug plans.

Prescription Drug Coverage: Automatically Tied to Medicare Part D

Under PSHB, if you’re Medicare-eligible, your prescription drug coverage is automatically provided through a Medicare Part D Employer Group Waiver Plan (EGWP).

Key features include:

• Automatic enrollment for Medicare-eligible enrollees and family members

• $2,000 annual out-of-pocket cap for prescriptions starting in 2025

• Expanded pharmacy networks

You may opt out—but doing so will result in losing prescription drug coverage entirely under PSHB, with re-enrollment restrictions for future years.

Government Contributions and Premiums: Still Shared, But Costlier

PSHB continues the model of shared premium costs, with the government paying roughly 70% of total premiums, just like under FEHB. However, due to changes in plan design and pricing structures:

• 2025 premiums are higher for many Self Plus One and Family plans

• Retirees pay monthly rather than biweekly premiums

• You may notice higher deductibles and different out-of-pocket maximums compared to what you paid under FEHB

While this is still a strong government-backed plan, you’re likely paying more in 2025 than you were in 2024 for similar coverage.

Coordination with Medicare is Not Optional—It’s Built In

Under FEHB, you had a choice: enroll in Medicare Part B or not. PSHB narrows that flexibility. The system is designed to work with Medicare, not separate from it.

Here’s how that coordination impacts you:

• If you’re on Medicare Part A and B, your PSHB plan may waive deductibles or reduce copays

• If you skip Medicare Part B when required, you lose those financial advantages and possibly even coverage

• PSHB assumes Medicare will be your primary payer, with the plan picking up remaining costs

This structural integration means your decision about Medicare enrollment carries much more weight now.

What Happens to Existing FEHB Enrollees?

If you were enrolled in FEHB through USPS before the transition, you didn’t need to start from scratch.

• You were automatically enrolled in a PSHB plan that closely matched your previous FEHB plan

• You received notification and had a chance to switch plans during Open Season in late 2024

• If you did nothing, your default PSHB coverage began on January 1, 2025

However, automatic enrollment did not bypass the requirement to enroll in Medicare Part B if applicable. That part still falls on you.

Plan Choices Are USPS-Specific

Under FEHB, you had access to a wide array of national plans available to all federal workers. Under PSHB:

• Plans are tailored for USPS employees and annuitants only

• Options may be more limited compared to what you previously had under FEHB

• Each plan offers different cost-sharing structures, including deductibles, copayments, and coinsurance ranges

That makes it even more important to compare carefully. Don’t assume your plan works the same way it did last year.

Out-of-Pocket Costs Have New Structures

You’ll likely encounter new or adjusted cost-sharing terms under PSHB, including:

• In-network deductibles: Range from $350 to $2,000, depending on plan type

• Out-of-pocket maximums: For 2025, in-network limits are around $7,500 for Self Only and $15,000 for Self Plus One or Family

• Copayments and coinsurance: May be lower if you’re enrolled in Medicare Part B

Understanding how these interact with Medicare can significantly affect what you pay during the year.

Exceptions and Exemptions You Should Know

Not everyone is required to enroll in Medicare Part B under PSHB. You may be exempt if:

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

• You are aged 64 or older as of January 1, 2025, and still actively working

• You live abroad or qualify for VA or Indian Health Service benefits

If you qualify for one of these exemptions, you’re allowed to keep PSHB coverage without Medicare Part B. But if you don’t, missing enrollment could cost you access.

How to Check Your Status and Take Action

If you’re unsure where you stand, here’s what you can do:

• Visit KeepingPosted.org (for annuitants) or LiteBlue (for employees)

• Look up your PSHB plan details and Medicare requirements

• Contact a licensed agent listed on this website for help interpreting your options

You should also keep a record of any correspondence you received during 2024 regarding your transition to PSHB, especially around Medicare enrollment and prescription drug coverage.

Understanding PSHB Isn’t Optional—It’s Critical for 2025 and Beyond

In 2025, the shift from FEHB to PSHB is no longer theoretical. It’s real, it’s active, and it affects your healthcare access, your premiums, your Medicare responsibilities, and your out-of-pocket costs.

You don’t want to make assumptions based on how FEHB used to work. PSHB has its own rules, timelines, coverage design, and enforcement mechanisms. And as a USPS employee, annuitant, or eligible dependent, your health coverage depends on getting it right.

If you haven’t already, make it a priority to verify your current plan, confirm your Medicare status, and understand what automatic enrollment may or may not have covered for you.

Your Health Coverage Has Changed—Now It’s Time to Adapt

The PSHB program may have launched without your active participation, but staying passive now could lead to denied claims, unexpected bills, or loss of coverage. It’s not enough to have a card in your wallet—you need to understand what’s behind it.

Take a few minutes to evaluate your enrollment, check your Medicare obligations, and compare plan costs. If you’re unclear about what steps to take next, reach out to a licensed agent listed on this website for professional advice and guidance tailored to your situation.