Key Takeaways

• The PSHB coverage tier structure can significantly impact your out-of-pocket costs, but these differences are not always clearly visible in plan brochures.

• You must assess how deductibles, coinsurance rates, and out-of-pocket maximums vary across tiers to avoid unexpected medical expenses.

Understanding the Role of Coverage Tiers in PSHB

When you enroll in a Postal Service Health Benefits (PSHB) plan, you may think the most important choice you make is selecting the overall plan itself. But within each PSHB plan, there are often layered structures known as coverage tiers, and these can quietly have a major effect on what you pay for care in 2025.

Coverage tiers define how different categories of care are paid for, whether it’s a routine visit to a primary care provider or more complex services like surgeries, therapies, or prescription drugs. Tiers can influence how much you owe in deductibles, how coinsurance works, and whether your plan covers services at all.

Yet many enrollees don’t realize these differences until they face unexpected bills.

What Exactly Are Coverage Tiers?

PSHB plans categorize health services and prescriptions into different tiers to manage costs and coverage. While every plan may label them differently, you’ll generally see tiers in the following areas:

• Medical provider networks: In-network vs. out-of-network

• Prescription drug categories: Tier 1 (generics), Tier 2 (preferred brand), Tier 3 (non-preferred), Tier 4+ (specialty drugs)

• Care delivery settings: Primary care, specialist, urgent care, emergency, hospital inpatient, outpatient surgery

The cost to you changes based on where a service or drug falls within these tiers. Understanding how each plan builds these categories is essential before you rely on the plan for a significant health event.

1. Provider Network Tiers and Why They Matter

Some PSHB plans have tiered networks, meaning even among in-network providers, there are levels. One tier might include a preferred set of doctors or facilities with lower copayments, while another tier may involve higher cost-sharing.

If you’re not aware of this network layering, you might mistakenly assume you’re receiving care at the lowest cost level—only to be billed for being in a higher-tier subgroup. This is especially common with large hospital systems that operate across multiple facilities.

You should also be cautious about using out-of-network providers. While some PSHB plans do provide partial reimbursement for out-of-network care, others offer no coverage at all, making the entire cost your responsibility.

2. Tiered Prescription Drug Coverage

In 2025, PSHB drug plans still follow a tier-based approach for prescriptions. This is critical because:

• Tier 1 drugs (mostly generics) usually have the lowest copayments.

• Tier 2 and Tier 3 drugs, often brand-name, come with higher costs.

• Tier 4 or 5 drugs may involve coinsurance instead of fixed copays, meaning you pay a percentage of the drug’s cost.

Some medications may shift tiers during the year, especially after mid-year formulary updates. If you’re managing a chronic condition, you’ll want to monitor whether your medications remain in an affordable tier.

Also note: Some PSHB plans require prior authorization or step therapy for higher-tier drugs, meaning you may need to try a lower-tier medication first before coverage kicks in.

3. Coverage Tiers Based on Care Type

Plans often separate benefits into cost-sharing tiers based on where or how care is delivered. For example:

• Primary care typically falls into the lowest tier for office visits.

• Specialists and urgent care may be a tier above, with higher copays.

• Emergency room visits or hospital admissions generally sit at the top tier, requiring coinsurance after a deductible.

In-network tiered care means that even if all services are provided within the network, your share of the cost can vary significantly depending on the type of provider or setting. This means an urgent care visit might cost less than a visit to the ER for the same condition, purely due to tier assignment.

4. Deductibles and Out-of-Pocket Maximums Are Tied to Tiers

Deductibles can differ by tier in some PSHB plans. For example:

• A low-tier plan may have a $350 deductible.

• A high-deductible tier may push that amount closer to $1,500 or more.

In 2025, the out-of-pocket maximum for in-network care under PSHB plans is often capped at $7,500 for Self Only and $15,000 for Self Plus One or Self and Family. However, services in higher tiers—such as out-of-network care—might not count toward these limits.

If you’re in a plan that includes separate limits for in-network vs. out-of-network care, your financial exposure could be much higher than expected.

5. Medicare Integration Can Alter Tier Impacts

If you’re enrolled in both PSHB and Medicare Part B, you might experience reduced cost-sharing due to plan coordination. Many PSHB plans waive certain deductibles or coinsurance amounts when Medicare is the primary payer.

However, not all services are affected equally. For example, your prescription drug coverage under PSHB is typically managed through a Medicare Part D EGWP (Employer Group Waiver Plan), which has its own tiered structure separate from your medical tiers. In 2025, this includes a $2,000 annual out-of-pocket cap under Part D, but only for drugs covered under that program.

So while Medicare can soften some tier impacts, it doesn’t eliminate them—and you still need to understand how each layer functions.

6. Specialty Services May Sit in Their Own Tiers

Some PSHB plans isolate specific benefits like mental health care, physical therapy, or durable medical equipment into special tiers with different rules. This means:

• You may have different copayments or coinsurance rates than your regular medical visits.

• Visits to certain therapists or specialists might count separately toward service limits or deductibles.

You must read the Summary of Benefits closely to see how these services are categorized.

7. Preventive Care Tiers Can Be Misleading

Preventive care is typically covered at no cost under PSHB plans when delivered by in-network providers. However, that doesn’t always apply if:

• The provider is outside the preferred tier within the network.

• The service goes beyond standard screening and is reclassified as diagnostic.

That means a free preventive colonoscopy could suddenly come with a coinsurance bill if a polyp is removed during the procedure. You need to be aware of how the preventive care tier resets once additional treatment is rendered.

What You Can Do Right Now to Avoid Tier Surprises

To protect your health and your wallet, take these practical steps:

• Read the plan brochures carefully—look for a benefits summary that lists tiered cost-sharing.

• Verify tier placement—check whether your providers and prescriptions fall into preferred tiers.

• Call the plan directly—get clarity on coinsurance, copays, deductibles, and network tiers.

• Use the plan’s online portal—most PSHB carriers have tier lookup tools.

• Review any changes during Open Season—tiers can shift from year to year, especially for drug formularies.

Don’t assume your plan’s lowest tier applies to all services. Even within the same PSHB plan, your cost-sharing can swing wildly depending on where your care or prescriptions fall.

Understanding Your Tier Risks Now Can Save You Later

Coverage tiers are not always clearly highlighted in PSHB marketing materials. Yet they shape nearly every financial outcome of your health care experience—from the cost of seeing a specialist to how much you’ll owe for surgery or medication.

In 2025, failing to dig into these structures could mean setting a budget based on assumptions that won’t hold up in a real health event. Whether you’re newly retired or a long-time postal employee, taking the time to understand your plan’s tiers is one of the most important financial decisions you’ll make this year.

To get personalized help understanding your current plan or comparing PSHB options, speak with a licensed agent listed on this website who can help you review tier details, limits, and cost implications.