The Postal Service is Changing Benefits Again—Here’s What Employees and Retirees Need to Know for 2025

Key Takeaways

1. The Postal Service Health Benefits (PSHB) program replaces the Federal Employees Health Benefits (FEHB) system for Postal Service employees and retirees in 2025.

2. Changes include Medicare integration requirements, cost-sharing updates, and new timelines for Open Season and Qualifying Life Events.

---

What Is Changing for Postal Service Employees and Retirees in 2025?

The Postal Service is rolling out significant changes to its health benefits in 2025. Whether you’re actively employed or retired, understanding these updates is essential to ensure you’re prepared for the transition. Let’s dive into the key changes and how they impact your benefits, enrollment options, and financial planning.

---

The Shift from FEHB to PSHB

The Postal Service Health Benefits (PSHB) program officially replaces the Federal Employees Health Benefits (FEHB) system for all Postal Service employees and annuitants. This shift aims to tailor health coverage specifically to the needs of postal workers while maintaining affordability and accessibility.

Who Needs to Enroll?

If you’re currently enrolled in an FEHB plan, your coverage will not automatically carry over. You must select a new PSHB plan to ensure uninterrupted coverage. Active employees, retirees, and their eligible family members are all required to make this change.

Open Season: Key Dates

The Open Season for PSHB began on November 11, 2024, and ran until December 13, 2024. If you missed this window, changes can only be made during a Qualifying Life Event (QLE) or the next Open Season. Any changes take effect on January 1, 2025, so planning ahead is critical.

---

Medicare Integration Requirements

One of the most significant changes in 2025 is the integration of Medicare into PSHB plans. Medicare-eligible retirees and their family members are required to enroll in Medicare Part B to maintain their PSHB coverage, with a few exceptions.

Who Is Exempt?

You may be exempt from the Medicare Part B requirement if:

• You retired on or before January 1, 2025.

• You were aged 64 or older as of January 1, 2025.

Benefits of Medicare Integration

By combining PSHB and Medicare, you’ll gain access to enhanced benefits, such as waived deductibles and lower copayments. Many plans also include reduced out-of-pocket costs for prescription drugs through a Medicare Part D Employer Group Waiver Plan (EGWP).

---

Understanding Cost Sharing in PSHB Plans

PSHB plans include updated cost-sharing structures that differ from the FEHB system. Knowing these details will help you budget effectively and avoid surprises.

Premiums

Your share of premiums varies depending on your plan and enrollment type. While the federal government typically covers around 70% of premium costs, your portion will depend on whether you select Self Only, Self Plus One, or Self and Family coverage.

Deductibles

• In-Network: $350-$500 for low-deductible plans; $1,500-$2,000 for high-deductible plans.

• Out-of-Network: $1,000-$3,000 depending on the plan.

Copayments

Expect copayments for various services, such as:

• Primary Care: $20-$40 per visit.

• Specialists: $30-$60 per visit.

• Urgent Care: $50-$75 per visit.

• Emergency Room: $100-$150 per visit.

Coinsurance

For in-network services, coinsurance ranges from 10%-30%, while out-of-network services range from 40%-50%. Reviewing your plan’s Summary of Benefits is essential to understand these costs.

---

Prescription Drug Coverage Updates

PSHB plans automatically include prescription drug coverage for Medicare-eligible enrollees through a Medicare Part D Employer Group Waiver Plan (EGWP). This offers significant savings for retirees who need regular medications.

Out-of-Pocket Caps

A major change in 2025 is the $2,000 annual cap on out-of-pocket costs for prescription drugs under Medicare Part D. This eliminates the “donut hole” coverage gap, providing financial relief for those with high medication expenses.

Pharmacy Networks

To maximize your savings, use in-network pharmacies. Out-of-network purchases often come with higher out-of-pocket costs and may not count toward your annual limit.

---

Planning for Qualifying Life Events (QLEs)

Life doesn’t always follow Open Season timelines. If you experience a Qualifying Life Event (QLE), you can update your PSHB coverage outside the regular enrollment period.

What Counts as a QLE?

Common QLEs include:

• Marriage or divorce.

• Birth or adoption of a child.

• Loss of other health coverage.

• Changes in employment status.

Deadlines for Changes

You typically have 60 days from the date of the QLE to update your PSHB coverage. Keep this timeframe in mind to avoid lapses in coverage.

---

How Retirees Can Maximize Benefits

If you’re retired, these changes may feel overwhelming, but they also come with opportunities to enhance your benefits. Here’s how you can make the most of your PSHB coverage in 2025.

Coordinate with Medicare

Enrolling in both Medicare Part B and a PSHB plan can lead to reduced out-of-pocket expenses. Review plans that offer premium reimbursements or cost-sharing reductions for Medicare enrollees.

Review Plan Details Annually

Even if you’re satisfied with your current coverage, it’s a good idea to review your plan during Open Season each year. Benefits, premiums, and out-of-pocket costs can change, and you might find a better fit for your needs.

Take Advantage of Preventive Care

Most PSHB plans cover preventive services at no additional cost. Schedule regular checkups and screenings to maintain your health and avoid costly treatments later.

---

What Happens If You Miss Enrollment?

Missing the Open Season deadline or failing to act after a QLE can leave you without coverage. Here’s what you need to know if this happens.

For Active Employees

If you don’t enroll during Open Season, you’ll lose health coverage for the upcoming year unless you qualify for a QLE.

For Retirees

Failing to enroll in a PSHB plan or Medicare Part B (if required) may result in losing access to health benefits. Ensure you meet all deadlines to avoid this situation.

---

Financial Planning Tips for 2025

Navigating these changes means reassessing your financial plans for the year ahead. Here are some strategies to help you manage costs effectively.

Budget for Premiums and Out-of-Pocket Costs

Start by calculating your expected expenses, including premiums, deductibles, and copayments. Factor these into your monthly budget to avoid surprises.

Use Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs)

If you’re eligible, these accounts let you set aside pre-tax dollars for healthcare expenses, reducing your taxable income while covering medical costs.

Monitor Annual Notices of Change

Each year, you’ll receive an Annual Notice of Change (ANOC) detailing updates to your plan. Review this document carefully to understand how your costs and coverage will change.

---

Staying Informed and Prepared

The transition to PSHB is a significant shift for Postal Service employees and retirees, but staying informed will help you navigate these changes smoothly. Here are a few tips to keep up to date:

• Attend Informational Sessions: The Postal Service often hosts webinars or in-person meetings to explain PSHB benefits.

• Review Official Communications: Emails, mailings, and the PSHB website are reliable sources of information.

• Ask Questions: Reach out to your HR department or benefits coordinator for personalized guidance.

---

Your Benefits, Your Future

The new PSHB program brings changes that impact your health coverage, financial planning, and retirement. By understanding these updates and taking proactive steps, you can make informed decisions to protect your health and well-being in 2025 and beyond.