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How Will PSHB Affect Postal Employees?

How Will PSHB Affect Postal Employees - Dugan-Brown

Since the Postal Service Reform Act passed into law in 2022, there has been considerable speculation about the establishment of PSHB (Postal Service Health Benefit) and its impact on postal employees and retirees. Although the legislation includes some unfavorable aspects for postal workers, it is not as detrimental as rumors might suggest.

PSHB is currently being implemented, and all plans will be accessible for viewing and selection during Open Season, which runs from November 11th to December 9th this year. This will require a transition from the FEHB (Federal Employee Health Benefits) program, as PSHB will offer its own distinct plan options and pricing. While the choices will differ, no one will lose their medical coverage. In fact, all of the most popular plans from the FEHB program will also be available under PSHB. Additionally, in October, everyone was automatically enrolled in a corresponding new plan that aligns with their current coverage, effective January 1, 2025. During Open Season, individuals can choose to opt for any of the numerous other PSHB plan options instead of their default selection.

To see all plans, plan codes, and the new corresponding plan defaults and codes for PSHB, use this link.

Another fear has been that prices will be drastically increased for postal employees under PSHB over what they were under FEHB. While most plans will see a slight increase in cost, it is similar in size to the annual adjustments we have come to expect with FEHB plan renewals. In fact, some plans, including the two NALC Health Benefit Plan options, will actually be less expensive under PSHB in 2025 than they were as FEHB plans in 2024!

You can find the full list of all PSHB plans and premium costs for 2025 listed here.

The most significant change with the introduction of PSHB involves Medicare enrollment. Moving forward, all postal retirees and their spouses will be required to enroll in and pay premiums for Part B of Medicare or a Medicare Advantage plan to retain their PSHB coverage. This will result in an additional annual premium cost of over $2,000 per person, starting at age 65 or upon retirement from the Postal Service, whichever occurs later. Previously, under FEHB, postal retirees had the option to enroll in Medicare at 65 alongside their FEHB plan, but it was not a requirement for maintaining that coverage.

There are two major exceptions to the new Medicare requirements. Anyone who retires from the USPS before January 1, 2025, or who is already over the age of 64 on that date, will be exempt from these changes. If you meet at least one of these criteria, you will have the option to enroll in Medicare if you wish, but it will not be mandatory to maintain active enrollment in your PSHB plan.

Another change you might notice during Open Season this year is that the USPS has opted out of participating in the FSA through FSAFEDS. However, an FSA option will still be available through another provider, Inspira Financial. For more information, you can refer to the article published last week by The Postal Times.

If you have any questions about PSHB and its potential impact on you, or if you have other concerns regarding your benefits and upcoming retirement, please contact us at 1-877-DB-READY.