Postal Retirees Are Facing Big Changes in 2025—Here’s What to Do Before Open Season Returns

This article was originally published here

Key Takeaways

The Postal Service Health Benefits (PSHB) Program fully replaced FEHB for USPS annuitants as of January 1, 2025, and now requires different rules, enrollment procedures, and Medicare coordination.
You may need to take action during the upcoming Open Season in November 2025 to ensure your health coverage still fits your needs, especially if you missed opportunities in 2024.

The Shift from FEHB to PSHB: What It Means for You

If you’re a Postal Service retiree, the shift from the Federal Employees Health Benefits (FEHB) Program to the new Postal Service Health Benefits (PSHB) Program in 2025 has already changed how your healthcare coverage works. While you may have been automatically enrolled in a corresponding PSHB plan, it doesn’t mean you’re done reviewing your options. The next Open Season, scheduled for November to December 2025, is your opportunity to assess whether your plan is still right for your needs.

Why This Change Happened

The PSHB program was created under the Postal Service Reform Act of 2022 to stabilize USPS finances and integrate retiree healthcare more efficiently with Medicare. It is now a completely separate program administered by OPM, specifically for USPS employees, annuitants, and their eligible family members. Starting January 1, 2025, FEHB plans are no longer available to Postal retirees unless you’re covered as a family member under another federal employee’s FEHB.

What Stayed the Same—and What Didn’t

While many familiar elements remain, several critical aspects have shifted. Understanding what continues under the new system versus what changed helps you avoid surprises during Open Season.

Key Features That Stayed the Same:

Carrier options and plan names: Many plans look similar to their FEHB counterparts.
Government contribution: USPS still pays approximately 70% of your premium.
Coverage structure: Most plans still include medical, hospital, mental health, and prescription benefits.
Annual Open Season: The enrollment period still runs from mid-November to mid-December.

What Changed:

New enrollment system: You no longer use the old FEHB portal. Annuitants must use the KeepPosted.org website for changes.
Separate program rules: PSHB plans have different rules and structures from FEHB.
Mandatory Medicare Part B for many retirees: If you became eligible for Medicare before 2025 but weren’t enrolled in Part B, you may have lost certain PSHB benefits unless you qualified for an exemption.
Prescription drug coverage now through Part D EGWP: Medicare-eligible retirees are automatically enrolled in an Employer Group Waiver Plan (EGWP).

Medicare Coordination Has Become Central

For many postal retirees, Medicare is now a required part of maintaining full PSHB coverage. The integration with Medicare Part B in 2025 was one of the most significant shifts.

Who Had to Enroll in Medicare Part B?

If you were 64 or older on January 1, 2025, or already retired by that date, you’re exempt from the Part B requirement.
If you turned 65 in 2024 and were not enrolled in Part B, you may have faced loss of certain PSHB benefits unless you enrolled during the Special Enrollment Period that ended September 30, 2024.
If you retired after January 1, 2025, and are Medicare-eligible, enrollment in Part B is now mandatory to maintain your full PSHB plan coverage.

How Medicare Now Works With PSHB

If you’re enrolled in Medicare Parts A and B, your PSHB plan becomes secondary. This can reduce your out-of-pocket costs, waive deductibles, and minimize copays. Prescription drug coverage is now through Medicare Part D under the EGWP model, which includes:

A $2,000 annual out-of-pocket cap
A $35 monthly cap on insulin
Access to a wider pharmacy network

Why Open Season Still Matters in 2025

Even if you were automatically moved into a PSHB plan in 2024, that plan might not be the best one for you moving forward. Open Season 2025 is your chance to correct course.

What You Should Review Before November

Premium amounts: While the government covers a portion, your share can vary widely.
Deductibles and copays: These can differ even among plans that look similar on the surface.
Medicare coordination benefits: Some plans offer better integration with Medicare than others.
Provider networks: Double-check that your preferred doctors and specialists are still in-network.
Prescription drug coverage: While Part D EGWP is standardized, formularies and pharmacy availability still differ by plan.

Coverage Pitfalls You Should Avoid

With a new system comes new risks. Failing to reevaluate your plan before Open Season could leave you exposed to avoidable costs or gaps in care.

Common Mistakes Postal Retirees Are Making Now:

Assuming the default plan is still a good fit: Your automatic assignment might not reflect your current needs.
Ignoring Medicare enrollment obligations: Missing deadlines for Part B can result in losing full PSHB plan coverage.
Not using updated enrollment platforms: Attempting to use FEHB systems will not work.
Overlooking the drug coverage changes: You may lose access to certain medications if you don’t review formularies.

The Role of the Special Enrollment Period (SEP) in 2024

Many retirees missed or were confused by the Special Enrollment Period for Medicare Part B that ran from April 1 to September 30, 2024. If you didn’t enroll during that time and you were required to, you might now be facing penalties or coverage restrictions.

If you’re unsure about your current status, Open Season 2025 may be your opportunity to make corrections, provided you’re now enrolled in Part B or qualify for an exemption.

Planning Ahead for 2026 and Beyond

The PSHB system is now the permanent framework for USPS health coverage. That means your future planning must be based on PSHB rules, not FEHB assumptions. You’ll need to keep up with evolving plan offerings, annual updates, and cost structures.

What You Can Expect Each Year Going Forward:

Annual adjustments to premiums, deductibles, and out-of-pocket maximums
Continued integration of Medicare Part D EGWP updates
Stricter enforcement of Part B requirements for new retirees
Refinements to PSHB plan offerings and networks

What You Should Do Now to Prepare

If you’re retired from the Postal Service or planning to retire soon, this is the time to get proactive. Waiting until Open Season opens may not give you enough time to do your homework.

Steps to Take Today:

Check your Medicare status: Make sure you’re enrolled in Part B if required.
Review your PSHB plan: Read your plan brochure and understand cost-sharing details.
Mark your calendar: Open Season is coming in November 2025.
Update your contact information: Ensure OPM and KeepPosted.org have your current details.
Contact a licensed professional: If you’re confused about your options, don’t guess. Mistakes could be costly.

Staying Informed Means Staying Protected

The transition to PSHB is not just a paperwork change. It’s a structural shift that affects your long-term retirement security. This is the first year many retirees are experiencing the full impact of PSHB and Medicare Part B integration. With more change possible each year, staying informed and taking action during Open Season isn’t just smart—it’s essential.

Prepare Now So You’re Not Rushed Later

Postal retirees are now part of a new health benefits era. The automatic transition to PSHB was only the beginning. To make sure you’re protected, covered, and optimizing your retirement benefits, now is the time to start preparing for the 2025 Open Season. Don’t wait until November. Begin evaluating your plan and Medicare status today, and get in touch with a licensed professional listed on this website if you need guidance.