Key Takeaways

• You may be overpaying for your Postal Service Health Benefits (PSHB) plan if you haven’t recently compared your current coverage to other available options.

• Factors such as Medicare enrollment, life changes, and coverage tier selection significantly impact how much you contribute every month—and many overlook these.

PSHB Contributions in 2025: What You’re Actually Paying For

In 2025, your PSHB contribution isn’t just a flat cost—it’s a combination of several variables, including your coverage type, Medicare status, and the specific plan you chose during Open Season. While the federal government typically covers around 70% of the total premium, your portion can vary widely depending on your selections and circumstances.

Each month, many annuitants and employees may be unknowingly paying more than necessary simply because they haven’t reviewed or updated their choices. Understanding how these contributions are calculated and what drives them is essential to ensuring you’re not overspending.

1. Sticking with an Outdated Coverage Tier

One of the most common reasons people overpay is sticking with a higher-tier coverage option that no longer suits their current household.

• Self and Family: Often selected for maximum coverage, this tier is suitable for larger households. However, if your children have aged out or a spouse no longer needs coverage, you may still be paying for dependents who aren’t eligible.

• Self Plus One: This is more cost-effective than Self and Family for households of two, but sometimes retirees forget to update their tier after family changes.

• Self Only: Ideal for individuals, especially those with Medicare Part B, since their PSHB plan may coordinate benefits to reduce overlap.

Reviewing your family status during each Open Season (November to December) ensures you are matched with the correct tier.

2. Not Adjusting for Medicare Part B Integration

For Medicare-eligible annuitants, 2025 rules under PSHB make it more important than ever to coordinate with Medicare Part B. Many PSHB plans integrate with Medicare, potentially offering reduced cost-sharing, lower deductibles, or premium incentives.

However, if you’re enrolled in Medicare Part B but haven’t updated your PSHB enrollment to reflect it, you might be missing out on benefits that lower your monthly out-of-pocket spending.

Similarly, if you opted out of Medicare Part B without understanding how it impacts your PSHB premiums and benefits, you may be paying higher copayments or coinsurance than necessary.

3. Ignoring Plan Differences During Open Season

Open Season is the once-a-year opportunity (November to December) to compare PSHB plans and switch if needed. Some plans adjust their premiums, benefits, or provider networks annually.

But many enrollees either don’t review these changes or assume their current plan is still the best fit. Failing to compare plans means you might be in a higher-cost plan when a similar lower-cost alternative exists.

While it’s true that government contributions help offset the premium, your personal share can still vary by hundreds of dollars each year, depending on your selection.

4. Misunderstanding Cost-Sharing Structures

Not all PSHB plans structure their costs the same way. Even if the premiums look similar, plans differ in how they apply:

• Deductibles

• Copayments

• Coinsurance rates

• Out-of-pocket maximums

For example, a low-premium plan might come with higher coinsurance, meaning you’ll pay more each time you use healthcare services. If you’re someone who uses healthcare often, this could make a big difference by the end of the year.

Understanding the full cost picture—including what happens when you actually use your benefits—is crucial.

5. Assuming All Plans Cover the Same Services

Some PSHB plans offer enhanced benefits if you’re enrolled in both PSHB and Medicare Part B, such as:

• Waived deductibles

• Lower copayments

• Prescription drug cost reductions

If your plan doesn’t offer these enhancements, and you’re paying full Medicare and PSHB premiums, you could be spending more for less coverage. It’s also common for people to select plans with duplicate benefits they don’t need, especially if Medicare already covers the service.

This creates a double-pay scenario with no added value.

6. Missing Qualifying Life Events (QLEs)

Outside of Open Season, you can still adjust your PSHB plan under specific life events, including:

• Marriage or divorce

• Birth or adoption

• Death of a family member

• Moving to a new region with different network availability

Many enrollees don’t take advantage of these Qualifying Life Events (QLEs), continuing to pay for plans or tiers that no longer reflect their actual needs.

You have 60 days from the date of the QLE to make changes.

7. Not Coordinating with Other Coverage

If you or your spouse have access to other health insurance—such as TRICARE, a state retirement system, or a private employer plan—then coordinating benefits is essential.

Without coordinating, you may be over-insured and overpaying. For instance, having two primary coverages may lead to unnecessary monthly contributions, especially when one plan could function as secondary.

8. Overlooking Changes in Out-of-Pocket Caps

In 2025, PSHB plans have a range of out-of-pocket maximums. For Self Only, the cap can go up to $7,500 for in-network services. For Self Plus One or Self and Family, it’s $15,000.

If you’re not anticipating high medical usage, you may not need a plan with a high premium and a low out-of-pocket max. Conversely, if you expect high usage and your current plan doesn’t protect you well, you could be paying more in coinsurance throughout the year.

The right match depends on both your health forecast and budget.

9. Forgetting About Regional Variability

Some PSHB plans are regional and may not be ideal if you’ve moved or plan to travel often. Using a plan with limited provider networks can lead to out-of-network charges, which are often 40%-50% higher than in-network care.

If you don’t update your plan after relocating or fail to check how often you’ll need out-of-area care, your contribution may be unnecessarily high due to excessive cost-sharing.

10. Assuming You’re Automatically Matched with the Best Plan

Finally, don’t assume the system will auto-match you to the best-value option. Automatic enrollment in a corresponding PSHB plan based on previous FEHB coverage only ensures continuity—not cost efficiency.

It’s your responsibility to evaluate whether your assigned plan is financially optimal. Automatic assignments do not account for your Medicare status, care needs, or income level.

Getting Control of Your PSHB Contribution in 2025

The good news is that most of these overspending issues can be corrected—but only if you act proactively. As a PSHB enrollee, you have the tools and flexibility to reassess your plan selection each year. Avoiding these common pitfalls could save you hundreds, even thousands, annually.

If you’re unsure whether your current plan is still the right fit, or if you’ve had any life changes that could affect your PSHB contribution, get in touch with a licensed agent listed on this website for personal advice. They can help you compare plans, explore Medicare coordination, and make timely changes during Open Season or after a Qualifying Life Event.