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New PSHB Enrollment Rules Are Here—And If You’re a Postal Retiree, They Affect Your Healthcare Access

Missy E
November 14, 2025

Key Takeaways

If you’re a Postal Service retiree, your health insurance now falls under the new Postal Service Health Benefits (PSHB) Program, which officially replaced FEHB for USPS employees and annuitants starting January 1, 2025.
To maintain your PSHB coverage, you may need to enroll in Medicare Part B—depending on your retirement date and Medicare eligibility status. Not doing so could jeopardize your access to prescription drug coverage and full plan benefits.

What Changed in 2025: The Shift From FEHB to PSHB

For decades, Postal retirees received health coverage through the Federal Employees Health Benefits (FEHB) program. But 2025 marks a turning point: you are now covered under a new program known as the Postal Service Health Benefits (PSHB) Program.

This transition results from a legislative change enacted under the Postal Service Reform Act of 2022. The law mandated that by January 1, 2025, USPS employees and retirees must transition to a separate health benefits program designed exclusively for the Postal workforce.

What PSHB Replaces

FEHB coverage for USPS employees and annuitants
Federal enrollment processes through standard FEHB portals
FEHB prescription drug coverage for Medicare-eligible retirees

What PSHB Keeps

Federal oversight via the Office of Personnel Management (OPM)
Government premium contributions (roughly 70% of the cost)
Access to Open Season, Qualifying Life Events (QLEs), and the OPM plan comparison tools

Who Is Impacted in 2025

If you are a Postal Service annuitant—or a family member of one—you are directly affected by this new structure.

You fall under PSHB if:

You are a Postal Service retiree who receives an annuity
You are a survivor annuitant of a deceased Postal employee or retiree
You are a current Postal Service employee
You are a family member covered under a PSHB Self Plus One or Self and Family enrollment

You’re Not Affected If:

You are a non-Postal federal retiree (you will remain under FEHB)
You’re covered as a dependent under someone else’s FEHB who is not part of USPS
You are not enrolled in any federal health benefits plan

Why Medicare Part B Now Plays a Bigger Role

One of the most significant differences with PSHB is its mandatory Medicare Part B enrollment requirement for some annuitants.

Who Must Enroll in Medicare Part B

If you are Medicare-eligible and meet either of the following conditions, you must enroll in Medicare Part B to maintain full PSHB coverage:

You retired after January 1, 2025
You turn age 65 in 2025 or later

Failing to enroll in Part B means you will lose prescription drug coverage through the PSHB plan’s integrated Medicare Part D benefit. You may also face higher out-of-pocket costs for medical services.

Who Is Exempt

You are not required to enroll in Medicare Part B if:

You retired on or before January 1, 2025 and are already 65+
You are under age 64 as of January 1, 2025
You live abroad with limited Medicare access
You qualify for VA or Indian Health Services coverage

Still, even if you’re exempt, enrolling in Medicare Part B can reduce your medical costs through coordination with PSHB benefits.

Timeline and Key Dates You Should Know

This transition wasn’t sudden. It followed a multistep rollout:

April 1 to September 30, 2024: Special Enrollment Period (SEP) for eligible retirees to sign up for Medicare Part B without penalty
November–December 2024: Open Season to enroll in a PSHB plan
January 1, 2025: Official start of PSHB coverage; FEHB no longer covers USPS retirees

These dates are critical because if you missed the SEP and didn’t already have Part B, you may now need to wait until the General Enrollment Period (January 1 to March 31) to sign up, with coverage beginning July 1 and penalties possibly applying.

Prescription Drug Coverage Looks Different Now

With the move to PSHB, Medicare-eligible annuitants no longer receive standard FEHB drug coverage. Instead, drug benefits are delivered through a Medicare Part D Employer Group Waiver Plan (EGWP).

What This Means for You

You are automatically enrolled in this drug coverage if you’re eligible and enrolled in Medicare Part B
If you opt out of Part B, you are also opting out of PSHB drug coverage
The plan includes a $2,000 annual cap on out-of-pocket prescription costs in 2025
Common drugs, including insulin, may be capped at lower fixed prices

Opting Out Comes With Consequences

You may choose not to participate in the Medicare Part D component, but doing so will terminate your PSHB prescription coverage entirely, with very limited opportunity to re-enroll in the future.

How PSHB Plans Coordinate with Medicare

If you’re enrolled in both a PSHB plan and Medicare Parts A and B, your coverage is coordinated to reduce your out-of-pocket expenses. Here’s how:

Medicare pays first: It covers the majority of your hospital and doctor services
PSHB pays second: It covers what Medicare doesn’t (subject to plan terms)
You may have no deductible or coinsurance in some PSHB plans when enrolled in Medicare
You may receive Part B premium reimbursement or other incentives (plan-dependent)

This coordinated approach can drastically reduce your healthcare expenses in retirement, but it only works if you meet the enrollment requirements.

What to Do During Open Season

Every November through December, you have the opportunity to:

Enroll in a PSHB plan if you’re newly eligible
Review your plan options and compare premiums, coverage, and out-of-pocket limits
Make changes to your enrollment (such as switching plans or adding dependents)
Confirm Medicare Part B enrollment if you’re required to have it

You can make changes through:

LiteBlue (for USPS employees)
KeepingPosted.org (for annuitants)
Or by calling the PSHB Navigator Help Line at 1-833-712-7742

Make sure to review your Annual Notice of Change from your PSHB plan to understand how your benefits or premiums may shift in the coming year.

Common Mistakes to Avoid

Failing to understand the new PSHB rules can result in costly errors. Here are key pitfalls:

Skipping Medicare Part B when it’s required—leading to loss of drug coverage
Missing Open Season without reviewing your plan’s updates
Assuming FEHB rules still apply—they don’t under PSHB
Not checking family member eligibility, especially if you’re covering dependents
Overlooking premium deductions from your annuity or paycheck

Carefully evaluating your plan each year is critical now that PSHB is in full effect.

Survivors and Spouses Need to Be Proactive

Survivor annuitants can retain PSHB coverage as long as they’re enrolled under the retiree’s plan and eligible for survivor benefits. However, they may also be subject to the Medicare Part B requirement if they meet the eligibility triggers.

If you’re planning to provide survivor coverage for a spouse or family member, make sure:

You elect the appropriate PSHB enrollment type (Self Plus One or Self and Family)
You ensure Medicare coordination is in place if they’re Medicare-eligible
You understand how survivor premiums are deducted after the retiree’s death

Your Health Coverage Choices Matter More Than Ever

The new PSHB system has streamlined certain aspects of healthcare for Postal retirees but also added layers of responsibility. Understanding what’s changed—and what’s required—is essential.

If you’re already on Medicare, adding Part B ensures you receive full PSHB benefits. If you’re not yet 65, begin preparing now so you’re ready when enrollment time comes. And if you retired before 2025, review whether voluntary enrollment in Part B could save you money.

This is not a decision to make lightly. Healthcare costs can add up quickly, especially in retirement.

Stay Compliant and Covered Under the New System

The transition to PSHB coverage has changed the landscape for Postal retirees. You’re no longer under the FEHB umbrella. You now face new requirements, deadlines, and coordination rules—especially involving Medicare.

If you want to maintain your access to comprehensive healthcare, prescription coverage, and avoid penalties, it’s crucial to take the time to understand the PSHB structure.

Speak with a licensed agent listed on the website to get professional advice tailored to your situation.