Under the postal reform law enacted last year ordering the PSHB, the program generally would make the same plans available and on the same coverage terms as in the FEHB, at least at the outset. Image: Jillian Cain Photography/Shutterstock.com
By: FEDweek StaffNext year will be the last before the Postal Service population is carved out of the FEHB into a new “Postal Service Health Benefits Program” that will be largely parallel in some ways but very different in others.
Starting in the 2025 plan year, that program will replace FEHB for postal employees, annuitants and eligible family members, although their status remains unchanged for the upcoming open season for choosing 2024 coverage.
The first opportunity to select a PSHB plan will take place during open season in late 2024, and coverage under the PSHB health benefits program coverage will begin January 2025, announcements previously posted by both OPM and the USPS said. Those who do not enroll in a plan at that time will automatically be enrolled in a PSHB plan—under the law, that generally would be with the same carrier they have in the FEHB, they said.
Under the postal reform law enacted last year ordering the PSHB, the program generally would make the same plans available and on the same coverage terms as in the FEHB, at least at the outset.
An analysis done for Congress last year said that “to the greatest extent practicable” the PSHB on is launch will be required “to include plans offered by each FEHB insurer that had a plan that enrolled at least 1,500 USPS employees or retirees in January 2023. (It also would include plans offered by other insurers determined appropriate by OPM.) In 2025, insurers with plans in PSHB and FEHB would be required to ensure that their PSHB and FEHB plans have equivalent benefits and cost-sharing requirements, with certain exceptions, including the drug coverage of Medicare-eligible retirees.”
However, those requirements would apply only for 2025. In later years, OPM said in a notice earlier this year, “Individual carriers will likely weigh the costs and benefits of offering FEHB plans and PSHB plans. Shifting enrollment numbers and additional implementation costs may lead some carriers to scale back or discontinue participation in one or both kinds of plans.”
OPM further said that because premiums for the two programs would be determined separately, based on each covered population, the impact on rates in both is “highly uncertain because enrollee and carrier reactions to the effects on Medicare, the FEHB program, and the new PSHB program are unknown.”
The allusion to Medicare is because those who retire from the USPS in 2025 and after will have to enroll in Medicare Part B when they become eligible, typically at age 65. Those retired before 2025 will retain the option of not enrolling, as will current employees who are age 64 or older before that point, when they retire.
Currently about a quarter of postal and other federal retirees don’t enroll in Medicare Part B, largely because they generally are eligible to remain in the FEHB, and do; they view the Part B premiums as paying extra for largely duplicative coverage. For those with both, Medicare pays first for services both programs cover. The FEHB acts as supplement, covering some things Medicare doesn’t, but there is no reduction in its premiums.
Also under the postal reform law, there is to be a “special enrollment period” next April-September for retirees who did not enroll in Medicare when they became eligible but who wish to do so, with a waiver of the premium surcharge that normally would apply in that situation.
Large Share of Federal Workforce about to Experience a Payless Pay Period
OPM Details Coverage Changes, Plan Dropouts for FEHB/PSHB in 2026
OMB Says Federal Workforce RIFs are Starting as Shutdown Drags On
Financial Impact of Shutdown Starts to Hit Home; WH Threatens No Back Pay
Surge of Retirement Applications Is in the Pipeline, Says OPM
See also,
TSP Takes Step toward Upcoming In-Plan Roth Conversions
5 Steps to Protect Your Federal Job During the Shutdown
Over 30K TSP Accounts Have Crossed the Million Mark in 2025
The Best Ages for Federal Employees to Retire
