Letter carriers, clerks and postal retirees spent decades in the same health program as every other federal worker. That ended on January 1, 2025. The Postal Service Reform Act of 2022 carved out a separate program, and postal employees and annuitants are no longer eligible to enroll in or continue an FEHB plan through the Postal Service.
The change is not cosmetic. PSHB has its own risk pool, its own premiums, its own government contribution cap, and one rule that has no equivalent anywhere in FEHB: a Medicare Part B enrollment mandate with real teeth. Every figure below comes from OPM’s 2026 rate charts, plan brochures and program pages, checked on September 6, 2026.
What PSHB Is and Who Is In It
OPM describes PSHB as a separate program within the FEHB Program that it administers. The plans cover the same comprehensive set of benefits FEHB plans do, and many of the same carriers show up on both lists: Blue Cross, GEHA, Aetna, UnitedHealthcare, Kaiser, plus the postal union plans (APWU, NALC, Rural Carrier Benefit Plan, MHBP).
You are in PSHB if you are a Postal Service employee or a Postal Service annuitant, along with your eligible family members. A few groups stayed behind in FEHB:
- A postal employee or annuitant covered as a family member under someone else’s FEHB enrollment that is not through the Postal Service can keep that coverage.
- Former postal employees and their family members already on Temporary Continuation of Coverage through an FEHB plan before January 1, 2025 stayed with that FEHB plan.
- A former spouse who loses PSHB coverage through divorce may be eligible to enroll in an FEHB plan under the spouse equity provisions.
Postal compensationers (workers’ compensation recipients determined unable to return to duty) are in PSHB but are exempt from the Part B requirement while they hold that status. At retirement, the requirement can attach.
For 2026, OPM lists 17 carriers and 75 plan options in PSHB, against 47 carriers and 132 options in FEHB. Two options went away for 2026 (GEHA Indemnity Benefit Plan Elevate and Elevate Plus), and enrollees who did not pick something new were defaulted into Blue Cross FEP Blue Focus.
PSHB vs. FEHB: What Actually Changed
| PSHB (2026) | FEHB (2026) | |
|---|---|---|
| Who is covered | Postal Service employees, annuitants, family members | All other federal employees, annuitants, family members |
| Plan choice | 17 carriers, 75 options | 47 carriers, 132 options |
| Medicare Part B | Required for most Medicare-eligible annuitants and family members | No requirement at all |
| Max monthly government contribution, Self Only | $660.05 | $703.65 |
| Max monthly government contribution, Self and Family | $1,543.32 | $1,685.73 |
| Weighted average total monthly premium, Self Only | $916.74 | $977.28 |
| 2026 average premium increase | 9.0% overall, 11.3% enrollee share | 10.2% overall, 12.3% enrollee share |
| Plan year | January 1 to December 31 for everyone | Annuitants January 1; employees start the first day of the first full pay period in January |
| FSAFEDS | Not available | Available to active employees |
| Part D drug coverage | Required of every PSHB carrier for Medicare-eligible annuitants | Offered by many carriers, not all |
FEDVIP dental and vision, FEGLI life insurance and the long term care program are unaffected by the switch. FEDVIP enrollment carries on exactly as before.
Note the two contradictory-looking rows. PSHB’s average premium is lower than FEHB’s, but so is the government’s contribution cap, so a given plan can cost a postal enrollee more or less than the FEHB version depending on where its premium sits relative to the cap.
The Medicare Part B Requirement
This is the rule that matters most and the one people get wrong.
Under the Postal Service Reform Act, certain Medicare-eligible postal annuitants and their Medicare-eligible family members must enroll in Medicare Part B to remain enrolled in a PSHB plan. OPM’s own language on the PSHB annuitant page: participation in Part B is required, and if you chose not to enroll you will not be eligible for PSHB coverage in retirement, and you will not have the option to enroll in PSHB even if you later enroll in Part B.
The same applies family member by family member. OPM’s published example: a spouse covered under your PSHB family enrollment who becomes Medicare-eligible, does not qualify for an exception and does not enroll in Medicare is dropped from your PSHB coverage. You keep yours. She loses hers.
Five exception categories are written into the program. You are not required to enroll in Part B if you are:
- A postal annuitant who retired on or before January 1, 2025 and was not already enrolled in Medicare Part B. Family members of those annuitants are also exempt.
- A postal employee who was age 64 or older on January 1, 2025. This exemption follows you into retirement and covers your family members too.
- A postal annuitant or family member living outside the United States and its territories. Residency has to be documented, and moving back can end the exception.
- A postal annuitant or family member eligible for or enrolled in certain Department of Veterans Affairs health benefits under subchapter II of chapter 17 of title 38. If the annuitant qualifies, family members are exempt whether or not they have VA benefits.
- A postal annuitant or family member eligible for health services from the Indian Health Service, with the same family member spillover.
The cost of complying is the Part B premium itself: $202.90 a month in 2026 per person, according to CMS, or $2,434.80 a year, plus an income-related surcharge that runs as high as $487.00 a month on top for beneficiaries with 2024 income above $500,000 single or $750,000 joint.
The Special Enrollment Period That Already Closed
To let older postal annuitants comply without being punished for a decade of not carrying Part B, the law created a one-time Special Enrollment Period that ran April 1, 2024 through September 30, 2024. It is closed and it is not coming back.
There is a lasting benefit for the people who used it. USPS pays the Medicare Part B late enrollment penalty on their behalf, monthly, directly to Medicare, for as long as their PSHB enrollment is active or validly suspended. That is not a small thing: the Part B penalty is normally 10% of the standard premium for every full 12 months you went without it, charged for life.
The catch is in what breaks it. Cancel your PSHB coverage and you become responsible for the penalty yourself from the cancellation date forward, on top of the regular premium. Suspending PSHB is safe (you can suspend to use a Medicare Advantage plan, Medicaid, TRICARE, CHAMPVA or Peace Corps coverage), and so is cancelling in order to move onto a family member’s FEHB or PSHB enrollment. Any other cancellation shifts the penalty to you. General rules on the penalty are in the Medicare late enrollment penalty guide.
2026 PSHB Premiums
Annuitants pay monthly. The figures below are the 2026 monthly enrollee share for nationwide fee-for-service PSHB plans, straight from OPM’s rate chart.
| PSHB plan and option (2026) | Self Only | Self Plus One | Self and Family |
|---|---|---|---|
| Blue Cross Standard Option | $411.89 | $919.58 | $1,038.29 |
| Blue Cross Basic Option | $276.45 | $679.99 | $774.62 |
| Blue Cross FEP Blue Focus | $162.83 | $350.06 | $385.03 |
| APWU High Option | $232.16 | $468.38 | $597.87 |
| NALC High Option | $262.47 | $635.51 | $579.41 |
| NALC CDHP | $145.40 | $330.69 | $357.96 |
| Rural Carrier High Option | $342.86 | $664.09 | $650.56 |
| GEHA Standard Option | $183.67 | $394.90 | $487.90 |
| MHBP Value Plan | $152.54 | $361.43 | $368.65 |
Program-wide, OPM reports 2026 monthly weighted average total premiums of $916.74 for Self Only, $1,978.58 for Self Plus One and $2,143.48 for Self and Family, with the government paying up to $660.05, $1,424.58 and $1,543.32 respectively. Regional HMOs are priced separately.
Head to head on the same carrier and option, Self Only, monthly enrollee share: Blue Cross Standard costs $411.89 in PSHB against $408.02 in FEHB, Basic costs $276.45 against $289.83, and FEP Blue Focus costs $162.83 against $144.76. There is no simple “PSHB is cheaper” answer.
No 2027 PSHB premiums exist as of September 6, 2026. OPM normally posts new rates about a month before Open Season, so mid-October at the earliest.
Prescription Drugs Run Through Part D Now
Every PSHB carrier must provide drug coverage for Medicare-eligible postal annuitants through Medicare Part D. If you are Part D-eligible, your plan enrolls you automatically in a Part D Employer Group Waiver Plan. There is no additional premium and no action required.
What you get is generally better than a standard FEHB drug benefit: OPM says out-of-pocket costs will never be higher than under the plan’s regular drug coverage and are often lower, plus the $35 monthly cap on insulin products and the $2,000 annual cap on out-of-pocket Part D drug costs. Some PSHB plans also offer a Medicare Advantage prescription drug EGWP with extra benefits.
The failure mode is opting out. OPM states that if you opt out of the Part D benefit accessed through your PSHB plan and do not buy a separate Part D plan, you have no drug coverage at all, and you pay the same premium anyway. If you opted out by mistake, contact the plan within 90 days for a grace period. You also cannot be in two Part D plans at once, so tell your PSHB plan if you already hold a separate one. For help with drug costs, look at Medicare Extra Help.
What a Postal Retiree Should Actually Do
Confirm which side of the exception line you are on. Retired on or before January 1, 2025 without Part B, or age 64 or older as a postal employee on that date? You are exempt, and so is your spouse. Everyone else who is Medicare-eligible needs Part B to stay in PSHB.
Look at what the plan gives back for taking Part B. Blue Cross Basic Option members in PSHB who carry both Part A and Part B can be reimbursed up to $800 per calendar year for their Part B premiums, per the plan’s 2026 brochure. That offsets about a third of the $2,434.80 annual premium. Other carriers structure this differently, so read your own brochure.
Do not cancel PSHB casually. If USPS is paying your Part B late enrollment penalty because you used the 2024 Special Enrollment Period, cancelling hands that bill back to you permanently. Suspend instead when you have qualifying other coverage.
Reprice every Open Season. With 75 options and a 9.0% average premium increase for 2026, the plan that was right in 2025 may not be. The comparison logic is the same one non-postal retirees use, which is walked through in FEHB and Medicare Part B and FEHB in retirement.
Check the survivor math. PSHB survivor eligibility follows the same rules as FEHB, so a surviving spouse can keep the enrollment only if you were in Self Plus One or Self and Family at your death and someone is entitled to a survivor annuity.