Attention all USPS employees, once more, it's time to delve into a noteworthy transformation that looms on the horizon - the impending modifications to your current Federal Employees Health Benefits (FEHB) health insurance.

While it's safe to assume that a substantial majority of you are already well-versed in the intricacies of these changes and the potential impact they may have on your coverage (and probably sick of hearing about them at this point); because we still get questions on the subject every week, I know there remains a group of Postal workers who might still be seeking clarity. If this describes you, fear not, this comprehensive guide is designed to shed light on the impending alterations to your USPS Employee Benefits, as we step away from the long standing FEHB, and into the era of the Postal Service Health Benefits Program, more commonly known as PSHB.

In the information that follows, we'll navigate the nuances of this transition and decipher how this new health insurance program aims to provide a seamless continuum of health coverage for all USPS Employees and Annuitants.. For those who haven't fully grasped the details yet, consider this your compass through the evolving landscape of your USPS Employee Benefits as it pertains to healthcare. Let’s dive in!

The Postal Service Health Benefits Program (PSHB): A Breakdown

In January 2025, the Postal Service population will transition out of the Federal Employees Health Benefits (FEHB) program and into a new "Postal Service Health Benefits Program" (PSHB). This transition will bring about changes in health coverage, and it's crucial for USPS employees and annuitants to be well-informed. Here's what you need to know:

The Birth of PSHB

The Postal Service Reform Act of 2022 established the PSHB program, which will be incorporated into the Federal Employees Health Benefits (FEHB) program starting in January 2025. This program aims to provide health plans that closely mirror current FEHB plans, but with different rates. These rates reflect a separate risk pool for postal employees and annuitants, along with cost savings resulting from increased Medicare integration.

Why The Change From FEHB to Postal Service Health Benefit?

Why MONEY of course! The future looks brighter for postal employees as the Postal Service Health Benefits Program (PSHB) gears up to deliver substantial savings. Projections indicate that postal employee and annuitant premiums are poised to decrease by $5.71 billion over the next decade. These sizable savings underscore the positive financial impact that the PSHB program is set to bring to USPS employees and retirees.

And further, according to the Congressional Budget Office (CBO), non-postal employees and annuitants can ALSO anticipate reduced spending on premiums amounting to an additional $1.5 Billion over the same time period! And while these savings for non-postal groups are substantial, the focus remains on the significant financial benefits that await postal employees within the PSHB program.

Medicare Part B Enrollments

While this transition brings significant changes, it's essential to clarify Medicare Part B enrollment requirements. Unlike previous postal reform bills, the Postal Service Reform Act does not impose new requirements on CURRENT postal annuitants to enroll in Medicare Part B (if they haven't already done so). However, postal employees under the age of 64 as of January 1, 2025, will be required to enroll in Medicare Part B once they become eligible for Medicare (typically at age 65) and retire as postal annuitants.

Medicare Part B: Special Enrollment Period

Current postal annuitants are in luck, as the law waives late enrollment penalties for Medicare-eligible postal annuitants who decide to enroll in Medicare Part B during a new, six-month special enrollment period beginning on April 1, 2024. This period allows for penalty-free enrollment in Medicare Part B, providing financial relief for those who wish to take advantage of it.

PSHB Program Details

Starting in January 2025, the program will offer plans that are parallel to FEHB plans. However, please note that PSHB is exclusively available to postal workers, annuitants, and their covered family members. These individuals will no longer have the option to enroll in parallel FEHB plans.

The PSHB program must, "to the greatest extent practicable," include plans that offer equivalent benefits to FEHB plans containing 1,500 or more postal workers or annuitants during the 2023 contract year. Health benefit plans from carriers in the PSHB will generally be subject to the same requirements and continuation of coverage rules as those in FEHB.

All postal workers will be required to select a health insurance plan in the new Postal Service Benefit Program during the 2024 open season, which will run from November 11, 2024, to December 9, 2024.

It's important to understand that eligible postal workers or annuitants who do not actively enroll in a PSHB plan during Open Season will be automatically enrolled. This automatic enrollment will match individuals with the appropriate PSHB plan to limit changes in coverage.

Health Benefits Education Program

By law, by October 2023, the United States Postal Service (USPS) is required to create a “Health Benefits Education Program” to further educate and inform postal workers and annuitants about the new program and its requirements. USPS will provide detailed information about the health care options available under PSHB, enrollment provisions, and the Medicare enrollment requirement. However, as of the writing of this post (Early Oct. 2023), I am unable to locate a specific training program. I will update this when the program comes out (unless it’s only available to internal employees of USPS). However at the end of this article, I will provide links to some valuable resources.

In conclusion, these upcoming changes in health coverage are significant, and it's crucial for USPS employees and annuitants to stay informed. Mark your calendars for the Open Season in late 2024, consider your options carefully, and be prepared for a smoother transition into the Postal Service Health Benefits Program (PSHB). Your health coverage matters, and taking proactive steps now will ensure a secure future.

And as always, should you have any questions regarding this new program, or anything related to your Federal Employee Retirement, feel free to reach out, we’re always here to help!

Resources

OPM’s PSHC Page

USPS Lite Blue PSHC Fact Sheet (Current Employees)

KeepingPosted.org PSHC Fact Sheet (Retired USPS aka. Annuitants)

Medicare Website