In 2025, the healthcare landscape for U.S. Postal Service retirees is changing significantly. With the introduction of the Postal Service Health Benefits (PSHB) program—mandated by the Postal Service Reform Act of 2022—postal retirees will transition away from the Federal Employees Health Benefits (FEHB) program. This shift requires a closer look at Medicare coordination, enrollment requirements, and how to protect your healthcare coverage.
This blog breaks down key points from the 2025 Medicare Basics for PSHB booklet created by Hawaiʻi SHIP and the Executive Office on Aging, so you can make confident choices in your retirement years.
PSHB replaces FEHB starting January 1, 2025, for all Postal Service retirees, employees, compensationers, and eligible family members. If you were enrolled in FEHB as of December 31, 2024, you were automatically transitioned to a similar PSHB plan. During Open Season (Nov. 11 – Dec. 9, 2024), participants had the opportunity to choose their PSHB plan. If no action was taken, you were auto-enrolled into the closest match from your previous coverage.
Those covered by a non-postal family member’s FEHB plan may remain in FEHB. Others, including retirees on Temporary Continuation of Coverage, will stay in FEHB until otherwise directed.
Medicare now plays a critical role in keeping your PSHB coverage. If you become eligible for Medicare after January 1, 2025, you must enroll in Medicare Part B to maintain your PSHB plan—unless you meet specific exemptions (such as still being actively employed at age 64+ as of that date).
When enrolled in both Medicare and PSHB:
| Status | Is Part B Required? |
|---|---|
| Retired before Jan 1, 2025 | ❌ Not required |
| Retired after Jan 1, 2025 | ✅ Required |
| Still working at 64+ (as of Jan 1, 2025) | ❌ Not required until retirement |
| Under 64, retiring after Jan 1, 2025 | ✅ Required at Medicare eligibility |
Failing to enroll in Part B when required means you may permanently lose your PSHB coverage and face late enrollment penalties.
If you are Medicare-eligible, you’ll automatically receive Part D coverage through your PSHB plan at no additional cost. This includes:
⚠️ Opting out of Part D means you will not have drug coverage under PSHB.
If your income exceeds certain thresholds, you may pay additional premiums called IRMAA (Income-Related Monthly Adjustment Amount). These apply to both Part B and Part D and are based on your income from two years prior.
For example:
Some PSHB plans offer the following savings to Medicare-enrolled retirees:
You can make changes to your PSHB plan outside of Open Season if you experience a QLE, such as:
The transition to PSHB and its coordination with Medicare can feel complex, but resources like Hawaii SHIP are here to help. Take time to understand:
For up-to-date guidance, plan comparisons, and counseling:
