OPM also put additional emphasis on the responsibilities of carriers to identify and weed out ineligible persons being covered as family members. Image: Mariusz S. Jurgielewicz/Shutterstock.com
By: FEDweek StaffOPM has issued its annual “call letter” on federal employee health insurance, which for the 2025 plan year will see the introduction of a Postal Service Health Benefits program as a carve-out from the FEHB program.
The annual letter begins the negotiation process between OPM and health insurance companies that ends with announcements of new plan rates and terms in the fall, with a late-year open season for eligible persons to elect coverage for the following year. While for decades that has meant only the FEHB, this fall there will be a parallel open season for those who will fall under the PSHB.
A 2022 postal reform law ordered establishing a new PSHB in 2025 to replace the FEHB for postal employees and retirees, with those who retire next year and later further required to enroll in Medicare parts B (physician and related services) and D (prescription drug benefits) when they become eligible, typically at age 65. Currently only about a quarter of retirees elect Medicare coverage since it largely duplicates FEHB coverage.
That law generally requires that FEHB plans with at least 1,500 postal enrollees as of 2023 must participate in the PSHB in 2025, with coverage terms and premiums and other costs paralleling their FEHB offerings. However, those guarantees apply only for the initial year.
The call letter does not address what might happen in 2026 and after, although in a rule-making notice last year OPM said that carriers longer-term “will likely weigh the costs and benefits of offering FEHB plans and PSHB plans,” which “may lead some carriers to scale back or discontinue participation in one or both kinds of plans.”
That announcement further said there is “a great deal of uncertainty” regarding the impact on premiums both for enrollees in the PSHB and those in the FEHB, which will be split into separate premium pools.
Under those rules, those being moved from the FEHB to the PSHB who do not make an election during this fall’s open season will continue with the same carrier and with the same type of enrollment they had in the FEHB, if a parallel plan is being offered in the PSHB. If one isn’t offered, they will automatically be enrolled in the lowest-cost national plan that is not a high-deductible plan and that does not impose a membership or association fee.
For 2025 in both programs, the call letter says that OPM “expects carriers to provide quality options for gender affirming care and services, maternal health, fertility, obesity management, mental health and substance use disorder treatment, and telehealth benefits”—areas the Biden administration has emphasized.
OPM also continued to emphasize two areas of concern going back many years: better coordinating the FEHB with Medicare, for those retirees with both, and prescription drug costs. The letter emphasizes outreach and customer service to those enrolled in both, relieving enrollees of the burden of deciding which program would have the lower cost-share for prescription drugs, and assuring that FEHB and PSHB enrollees for whom Medicare is primary “receive medical and drug coverage equal to or greater than the medical and drug coverage they would have received” without Medicare.
OPM also put additional emphasis on the responsibilities of carriers to identify and weed out ineligible persons being covered as family members. The inspector general of OPM and GAO have raised that issue repeatedly as adding expenses that in turn are passed to enrollees and the government in the form of higher premiums.
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See also,
Top 10 Provisions in the Big Beautiful Bill of Interest to Federal Employees
A Pre-RIF Checklist for Every Federal Employee, From a Federal Employment Attorney
Work Longer or Take the FERS Supplement Now: Which is Better?
Doubling Your TSP (C Fund vs G Fund)
