The Office of Personnel Management (OPM) has announced the annual premiums for the inaugural year of the new Postal Service Health Benefits (PSHB) Program.
The total average increase for the enrollees’ share of the 2025 PSHB premiums will be 11.1%. The total average increase for current Postal employees and annuitants enrolled in plans under the FEHB Program will be 6.9%.
OPM said that the premium increase for the Postal program is lower than the 2025 FEHB premium increases due to greater integration in Medicare required under the Postal Service Reform Act, differences in the cost profiles of the plans offered in each program, and demographic factors.
All 2025 PSHB premiums are available on the OPM website. There is also a webpage dedicated to information about the PSHB program to assist enrollees.
There will be 30 health insurance carriers offering 69 plan options in the 2025 PSHB, representing a mix of seven fee-for-service carriers and 23 health maintenance organizations. Their service areas vary from nationwide to specific regions and all have experience insuring members through the FEHB Program.
All current Postal employees, annuitants, and their family members enrolled with an FEHB plan will be mapped to an equivalent PSHB plan prior to Open Season. During Open Season, enrollees may opt to stay with the plan they have been mapped to or select a different plan.
OPM has provided information on automatic enrollment in PSHB based on current FEHB enrollment. Automatic enrollment ensures that no enrollee is left without coverage, even if an enrollee takes no action during the upcoming transitional Open Season.
OPM will send all Postal Service enrollees a personalized letter informing them of the PSHB plan they are being automatically enrolled in and explaining how to select a new plan during Open Season if they desire.
All PSHB benefits in 2025 are required to be the same as the FEHB benefits except for prescription drug benefits. PSHB Carriers must offer Medicare Prescription Drug Plan Employer Group Waiver Plans (EGWPs) to Postal annuitants and their eligible family members. Additionally, some Carriers will offer Medicare Advantage-Prescription Drug EGWPs.
Except for current Postal annuitants and other limited exceptions, Medicare eligible Postal annuitants and family members must enroll in Medicare Part B to receive PSHB benefits.
Many PSHB plans offer cost savings for enrollees who are also in Medicare. OPM has provided a guide that compares PSHB plan benefits with and without Medicare.
OPM said that during the 2024 Special Enrollment Period (SEP), more than 28,000 Postal annuitants have enrolled in Medicare Part B and that number is expected to grow through the September 30 cut-off date. Overall, approximately 75% of Medicare eligible Postal annuitants are currently enrolled in Part B and, following the SEP, OPM said that it expects that more than 80% will have enrolled.
What is the Postal Service Health Benefits (PSHB) Program?
OPM was required under the Postal Service Reform Act to establish the Postal Service Health Benefits Program within the Federal Employees Health Benefits Program under which OPM may contract with carriers to offer health benefits plans for USPS employees and retirees.
The PSHB Program will include health benefits plans available only to Postal Service (USPS) employees, Postal Service retirees (annuitants), and their eligible family members.
Starting January 1, 2025, these individuals will have to get their federal health benefits coverage from the PSHB program because eligibility for enrollment or coverage under the Federal Employees Health Benefits (FEHB) program will end on December 31, 2024.
Furthermore, subject to limited exceptions, USPS annuitants who retire and become Medicare-eligible after December 31, 2024, as well as their Medicare-eligible family members will be required to enroll in Medicare Part B as a condition of eligibility to enroll in the PSHB Program. This requirement to enroll in Medicare Part B is the primary eligibility difference between PSHB and FEHB plans.
Establishing PSHB Program is Expensive
The Postal Service Reform Act provided $70.5 million to OPM to cover start up costs to use for setting up the PSHB program. OPM said that it planned to use the money to fund activities such as onboarding new support personnel, updating its existing financial management and retirement systems, and issuing new regulations.
However, OPM did not think that $70 million was enough and had asked Congress for another $37.7 million in its fiscal year 2024 budget request to help cover startup costs. Most of that money would be used “to support on-going operations and maintenance costs of implementation activities begun in FY 2023 and continuing in FY 2024 that were not otherwise provided for” and $9.5 million would be used “to meet a surge in demand for customer support.”
