The Federal Employee Benefits That Are Set to Change the Most in 2025

Alec Warner
December 24, 2024

Key Takeaways:

Federal employees and retirees will experience significant changes in their benefits for 2025, including increased health insurance premiums, the introduction of the Postal Service Health Benefits (PSHB) Program, and expanded coverage options.
Understanding these changes and actively participating in the Open Season enrollment period is crucial to ensure your benefits align with your healthcare and financial needs.

The 2025 Federal Benefits Landscape: What’s Changing?

or retiree, your benefits play a central role in your financial planning and access to quality healthcare. With 2025 bringing several notable changes to federal benefits, it’s more important than ever to stay informed. These adjustments could affect everything from your monthly healthcare costs to the coverage you rely on for specialized services.

Let’s dive into the most significant updates so you can prepare effectively and make the best choices during the Open Season enrollment period.

Rising Health Insurance Premiums

In 2025, participants in the Federal Employees Health Benefits (FEHB) Program will face an average premium increase of 11.2%. Rising healthcare costs, the growing use of expensive specialty medications, and a broader focus on mental health services are driving these increases.

How It Impacts You

Budgeting: Anticipate higher deductions from your paycheck or annuity. This means planning ahead for these increased expenses and reevaluating your household budget.
Evaluating Plans: Premiums and out-of-pocket costs vary by plan. Use the Open Season to determine whether switching plans could save you money while still meeting your needs.

The Launch of the Postal Service Health Benefits (PSHB) Program

A significant change in 2025 is the introduction of the Postal Service Health Benefits (PSHB) Program, which will provide health benefits exclusively for USPS employees, retirees, and their eligible family members. This change stems from the Postal Service Reform Act of 2022 and aims to streamline health benefits for postal workers.

Key Features of the PSHB Program

Automatic Enrollment: Current USPS employees and retirees enrolled in an FEHB plan will be automatically transitioned to a corresponding PSHB plan. This ensures that no one loses coverage during the transition.
Plan Matching: If your current plan doesn’t have a corresponding PSHB plan, you’ll be enrolled in the program’s lowest-cost nationwide plan that meets certain criteria, like not being a high-deductible plan.
Dedicated Enrollment Period: Open Season, running from November 11 through December 9, 2024, gives you the chance to review and make changes to your PSHB coverage before the new plans take effect on January 1, 2025.

What You Should Do

Review Plan Options Carefully: This is your opportunity to compare plans under the new PSHB program and make adjustments if needed. Take the time to review any changes in coverage, costs, or network providers.
Understand the Implications: If you’re retired or nearing retirement, check whether you’ll need to enroll in Medicare Part B to maintain PSHB eligibility. Coordination between Medicare and PSHB could impact both your coverage and your out-of-pocket costs.

Expanded Fertility Benefits

Recognizing the diverse healthcare needs of federal employees and their families, both the FEHB and PSHB programs will include expanded fertility coverage starting in 2025. These updates are a step forward in addressing family planning challenges.

What’s New?

Enhanced Coverage: Plans will now cover more fertility treatments, including several cycles of artificial insemination and IVF medications annually. This is a significant improvement for those who have struggled with limited fertility coverage in the past.
Plan-Specific Benefits: While the minimum standard for fertility benefits applies to all plans, some plans may offer additional services or higher levels of coverage.

What It Means for You

Financial Relief: Fertility treatments can be expensive, and these changes could help lower your out-of-pocket costs significantly.
Plan Comparison Is Key: Not all plans will cover fertility treatments at the same level, so take the time to evaluate which options provide the best support for your family planning needs.

Increased Government Contributions

To help offset rising premiums, the government’s share of health insurance contributions will increase in 2025. For most employees and retirees, the biweekly maximum contribution will rise to $298.08 for Self Only, $650.00 for Self Plus One, and $714.23 for Self and Family coverage.

Considerations for You

Out-of-Pocket Costs May Still Rise: Despite the higher government contribution, you may still see an increase in your share of the premium. Understanding your plan’s total cost structure is essential.
Reassess Enrollment Options: If you’re currently enrolled in Self Plus One or Self and Family, compare costs to ensure that your chosen enrollment type is the most cost-effective option for your household.

Mental Health and Behavioral Health Services

Another priority for 2025 is the expansion of mental health services across all federal health benefit plans. Increased awareness of mental health challenges has led to greater investment in accessible, affordable behavioral healthcare.

What’s Changing?

Improved Access: Many plans will now include lower copayments for therapy and counseling sessions, expanded provider networks, and greater coverage for virtual mental health services.
Emphasis on Prevention: New initiatives may also focus on early intervention and prevention, including wellness programs and mental health screenings.

How to Take Advantage

Explore Covered Services: Check what mental health services your plan includes and whether additional options are available during Open Season.
Consider Virtual Care Options: Telehealth services are often more convenient and cost-effective. Verify that your plan includes coverage for virtual therapy or counseling.

The Importance of Open Season

Open Season, held annually from mid-November to early December, is your once-a-year opportunity to review and update your federal benefits. For 2025, this period runs from November 11 to December 9, giving you nearly a month to evaluate your options.

Key Steps to Take During Open Season

Review Changes: Carefully read through any updates to your current plan and compare them to new options available for 2025.
Assess Your Needs: Consider whether your current coverage still aligns with your health and financial priorities.
Seek Advice: Reach out to your agency’s human resources office or use the Office of Personnel Management’s (OPM) resources if you have questions.
Don’t Miss the Deadline: Changes made during Open Season take effect on January 1, 2025, so make sure to act before the December 9 deadline.

Looking Ahead: Federal Benefits in 2025

The adjustments to federal employee benefits in 2025 reflect a broader effort to meet the evolving needs of employees and retirees. While rising costs may pose challenges, expanded coverage options and increased government contributions provide opportunities to tailor your benefits to your circumstances.

Staying proactive is key—use Open Season to review your options, explore new programs like PSHB, and ensure your benefits align with your healthcare and financial goals. With the right planning, you can navigate these changes effectively and make 2025 a year of smart benefits management.