Key Takeaways

• The Postal Service Health Benefits (PSHB) program officially replaced the Federal Employees Health Benefits (FEHB) program for USPS employees and annuitants beginning January 1, 2025. While both programs are administered by OPM, the PSHB introduces separate rules, premiums, and Medicare integration specific to Postal workers.

• Although the names sound similar, the PSHB diverges significantly from FEHB in terms of eligibility, Medicare coordination, prescription drug integration, and enrollment requirements, especially for retirees and family members.

The Start of a New Era in Health Coverage

As of January 1, 2025, the Federal Employees Health Benefits (FEHB) program no longer covers United States Postal Service (USPS) employees and annuitants. Instead, you are now covered under the new Postal Service Health Benefits (PSHB) program. If you are a current Postal retiree, active employee, or family member, this shift marks one of the most significant changes to your health benefits in decades.

Although both FEHB and PSHB are overseen by the Office of Personnel Management (OPM), the programs now operate on separate tracks. What that means for you, practically speaking, is a new set of eligibility rules, plan structures, Medicare obligations, and deadlines.

How PSHB Came to Replace FEHB for Postal Workers

The PSHB was created as part of the Postal Service Reform Act of 2022. The law aimed to reduce long-term healthcare liabilities for the USPS while preserving the quality of benefits available to Postal workers and retirees.

While the Act was passed in 2022, the actual transition occurred over several stages:

• 2022: Law signed, PSHB development began.

• 2023 to 2024: Communication campaigns, regulation drafting, plan creation.

• 2024: Open Season included PSHB plan selections for the first time.

• 2025: PSHB officially became effective on January 1.

You are now enrolled in PSHB, unless you opted out due to a qualifying exception.

Eligibility Isn’t Identical

FEHB covered federal employees across all agencies, including USPS. But the PSHB only applies to Postal workers and annuitants.

If you are a Postal Service employee or annuitant, your health coverage comes exclusively through the PSHB program starting in 2025. However, if you are covered under a family member who is a federal employee (but not USPS), you can remain on an FEHB plan.

Also, eligibility criteria for maintaining coverage in retirement remain tied to federal rules: 5 years of continuous enrollment or since your first eligible opportunity, and immediate entitlement to a retirement annuity.

Enrollment Requirements Are Now Stricter

One of the most notable changes you face under PSHB is the mandatory Medicare Part B enrollment for certain individuals.

If you are a Medicare-eligible annuitant or a covered family member and you:

• Retired after January 1, 2025, and

• Are 65 or older, or become eligible for Medicare due to disability,

Then you must enroll in Medicare Part B to remain eligible for your PSHB coverage. If you do not, you could lose access to PSHB health insurance.

Exceptions apply only if:

• You retired on or before January 1, 2025.

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

• You are living abroad.

• You receive care from the Indian Health Service or VA.

This requirement did not exist under FEHB, making this a substantial difference that could affect your health planning and budgeting in retirement.

Medicare Integration Has Been Redesigned

Under FEHB, coordination with Medicare Part B was optional and varied by plan. With PSHB, Medicare integration is not only more standardized but also more favorable in some cases, especially if you meet the new Part B enrollment mandate.

Most PSHB plans offer:

• Waived deductibles

• Lower copayments

• Reduced coinsurance for enrollees with Medicare Part B

This is part of a built-in Medicare coordination policy specific to the PSHB program. It means that if you enroll in Part B, your PSHB plan will work more like a true secondary payer, reducing your out-of-pocket costs significantly.

That wasn’t always guaranteed under FEHB. Some FEHB plans coordinated benefits well; others barely did. With PSHB, that integration is baked in by design.

Prescription Drug Coverage Is Now Fully Integrated with Part D

Starting in 2025, PSHB plans for Medicare-eligible enrollees automatically include a Medicare Part D prescription drug plan through an Employer Group Waiver Plan (EGWP).

This integrated drug coverage provides:

• Access to the full Part D formulary

• No need to separately enroll in a Part D plan

• An annual out-of-pocket cap of $2,000

• Access to a broad national pharmacy network

• A $35 monthly cap on insulin

Opting out of this drug coverage is allowed, but only if you are enrolled in other creditable prescription drug coverage. However, if you opt out, you lose your drug coverage under PSHB entirely and may not be able to reenroll later.

In contrast, FEHB plans offered prescription benefits as part of the health plan, without linking to Part D. This makes PSHB the first federal program to fully embrace Part D integration for a specific workforce group.

Premiums and Contributions Have Changed

While premiums under FEHB were calculated based on the entire federal workforce, PSHB premiums are calculated based solely on the Postal population. This change affects the structure of your monthly contributions.

The government continues to contribute approximately 72 percent of the total premium cost under PSHB, similar to FEHB. However, your actual out-of-pocket premium amount may be different due to:

• A smaller risk pool

• Medicare integration

• Drug coverage bundling

In 2025, the weighted average monthly premium you pay as a Postal annuitant is around $241 for Self Only, $521 for Self Plus One, and $567 for Self and Family. These figures differ from what FEHB enrollees now pay.

Open Season Still Applies—But the Timeline Matters More Now

The Open Season period remains consistent for both FEHB and PSHB: it occurs each year between November and December. But for you as a Postal enrollee, this window is now your only guaranteed opportunity to make changes to your PSHB plan unless you experience a Qualifying Life Event (QLE).

For instance, during Open Season, you can:

• Switch PSHB plans

• Change from Self Only to Self Plus One or Self and Family

• Enroll if previously waived

However, switching from PSHB back to FEHB is not permitted unless you no longer qualify as a Postal employee or annuitant.

You Can Still Use the Same Systems—With Key Access Points

FEHB enrollees access plans through the OPM portal. As a PSHB enrollee, your access depends on your status:

• Current USPS employees make changes through LiteBlue.

• Annuitants and retirees use KeepingPosted.org or call the PSHB Navigator Help Line (1-833-712-7742).

This infrastructure is new but modeled to feel familiar, helping you transition more easily.

FEDVIP, FSAFEDS, and Other Benefits Stay the Same

It’s important to know that PSHB changes only affect your core health insurance. Other federal benefits are not impacted:

• FEDVIP (dental and vision) remains unchanged

• FSAFEDS (flexible spending accounts) continues as before

• FEGLI (life insurance) is unaffected

• FLTCIP (long-term care) operates independently

This consistency allows you to maintain your broader benefit elections as before, while adapting only to the healthcare program change.

Know Where to Get Help

OPM has created dedicated resources for PSHB support, including:

• Online FAQs

• PSHB Navigator Help Line

• Plan comparison tools

• Medicare coordination details

And you always have the option to consult with a licensed agent listed on this website for personalized guidance.

What These Differences Mean for You in 2025 and Beyond

What may sound like a simple rebranding is, in reality, a full redesign of your health benefits. If you are not actively reviewing your eligibility, Medicare status, and plan selection each year, you could face unexpected costs or coverage lapses.

Here are some key reminders:

• If you are approaching age 65 or already on Medicare, confirm your Part B enrollment.

• Review your PSHB plan’s Medicare coordination details.

• If you opted out of drug coverage, ensure you have other creditable prescription insurance.

• Monitor future Open Season dates each fall to keep your coverage aligned with your needs.

You are no longer under FEHB. Your new reality is PSHB, and it comes with new benefits, responsibilities, and deadlines. Staying informed is essential.

Ready to Review Your Options?

If you need help understanding how your PSHB coverage works, especially with Medicare or drug benefits, it helps to speak with someone who knows the full system. A licensed agent listed on this website can walk you through your plan features, enrollment requirements, and cost structure. Don’t wait until Open Season to get answers.