The shift from FEHB to PSHB was one of the biggest changes to come out of the 2022 Postal Service Reform Act. For active employees, the transition was mostly seamless — your plan likely carried over with the same name and similar benefits. But the details matter, especially around Medicare Part B requirements, premium costs, and what happens when you retire.
This guide covers how PSHB works, what’s different from FEHB, and what you need to plan for — whether you’re a new employee, mid-career, or approaching retirement.
What Changed from FEHB to PSHB
PSHB is a separate health benefits program exclusively for USPS employees, retirees, and their eligible family members. It’s administered by OPM (the same agency that ran FEHB) but operates as a distinct program with its own plan options and pricing.
Many of the same carriers that offered plans under FEHB — like Blue Cross Blue Shield (FEP), GEHA, and others — now offer plans under PSHB. In some cases the plan names are identical, but the premiums and networks may differ because PSHB and FEHB are now priced separately.
What stayed the same: The basic structure of choosing a plan during open season, employer premium contributions, self-only/self-plus-one/family enrollment tiers, and the FEDVIP dental and vision program (which is separate from PSHB and wasn’t affected by the change).
What changed: The plan pool is USPS-specific, premiums are calculated independently from the broader federal workforce, and there’s a new Medicare Part B requirement for most future retirees.
The Medicare Part B Requirement
This is the single biggest difference between PSHB and the old FEHB system, and the part that causes the most confusion.
The rule: If you retire after January 1, 2025 and become eligible for Medicare (generally at age 65), you and your Medicare-eligible family members must enroll in Medicare Part B to maintain PSHB coverage. If you don’t enroll in Part B, you lose your PSHB health insurance.
The cost: Medicare Part B premiums are approximately $185 per month per person in 2026. For a couple, that’s $370/month in additional healthcare costs that pre-2025 retirees don’t face. This is a significant expense to factor into retirement planning.
Who Is Exempt from the Medicare Part B Requirement?
Not everyone has to enroll in Part B. The following groups are generally exempt:
Retirees who retired on or before January 1, 2025 and were not already enrolled in Medicare Part B. If you were already retired before PSHB started, you’re grandfathered in.
Employees who were age 64 or older on January 1, 2025. If you were born before January 2, 1961, you’re exempt. Your eligible family members are also exempt.
Retirees or family members living outside the United States and its territories.
Those eligible for VA healthcare benefits under specific provisions of Title 38. When a retiree qualifies for this exemption, their family members are also exempt regardless of their own VA eligibility.
Those eligible for Indian Health Service (IHS) benefits. Same family member exemption applies.
2026 Premium Costs
PSHB premiums increased by an average of about 11.3% for 2026. Here are the government contribution maximums:
| Enrollment Type | Biweekly Max Gov’t Contribution | Monthly Max |
|---|---|---|
| Self Only | $304.64 | $660.05 |
| Self Plus One | $657.50 | $1,424.58 |
| Self and Family | $712.30 | $1,543.32 |
The government contribution covers 72% of the weighted average premium. Your out-of-pocket share depends on which specific plan you choose — some plans cost more, some less. Use Checkbook’s Guide to PSHB Plans (available free through the MyHR website) to compare your options.
The Five-Year Rule for Retirees
To carry PSHB coverage into retirement, you must have been continuously enrolled for five years before your retirement date (or since your first opportunity to enroll, if you haven’t been eligible for five years). This is the same rule that existed under FEHB.
If you’re planning to retire in the next few years, make sure your enrollment has been continuous. Any gap in coverage could disqualify you from carrying health insurance into retirement — and at that point, your options become very limited and expensive.
What This Means for Retirement Planning
The Medicare Part B requirement adds a significant cost that didn’t exist under the old system. If you’re planning to retire after 2025 and will eventually turn 65, you need to budget approximately $2,220 per year per person ($185 × 12) for Medicare Part B premiums on top of your PSHB premium share.
For a couple, that’s roughly $4,440 per year in additional healthcare costs starting at age 65. Factor this into your FERS retirement calculations and your Social Security claiming strategy.
See how your FERS annuity, TSP, and Social Security combine into total retirement income.
Open the Retirement Planner →For Active Employees: What to Do Now
Review your plan annually. Don’t auto-renew without checking. PSHB plans are new and carriers are still adjusting their networks and pricing. What was the best value last year may not be this year.
Use the comparison tool. Checkbook’s Guide to PSHB Plans is available free through the MyHR website. It lets you compare plans side by side including copays, deductibles, prescription costs, and network coverage.
Understand your premium share. Your biweekly PSHB deduction shows on your pay stub. Make sure you know what you’re paying and whether a different plan could save you money for equivalent coverage. Use our take-home pay guide to understand how health premiums affect your net pay.
Plan for Medicare Part B early. If you’re within 10 years of retirement, start factoring the Part B premium into your retirement income projections now. The earlier you plan for it, the less it stings when the bill arrives.
Sources: OPM PSHB Program page, 2022 Postal Service Reform Act, OPM PSHB Premium tables for 2026, USPS Employee News open season announcements (November 2025), Checkbook’s Guide to PSHB Plans.