Don’t Let the Two Major Postal Health Plan Changes Confuse You

written by Lacie Harmon exclusively for © Postal Employees Network

9/5/24 – If you’re a postal employee or retiree (annuitant), you would be forgiven for having some confusion about the Post Office Health Plan switchover from the Federal Employee Health Benefit (FEHB) to the Postal Service Health Benefits Program (PSHB). The change is a massive and complicated affair, and while the USPS and OPM are doing everything they can to make the upcoming transition smooth, quite a few folks have mentioned to my office that they aren’t quite sure what’s going on. One question that comes up more than any other right now:

“Does this change affect me?”

Actually, there are two answers. That’s because there are two major transitions with two separate deadlines at play right now. Let’s take a look at what they are:

1. If you’re a Post Office employee or annuitant, you will need to transition to the PSHB during Open Season (Nov. 11 – Dec. 9, 2024).

The PSHB is the new group health plan exclusive to USPS employees and annuitants, currently provisionally comprised of 32 plans similar to plans previously offered under FEHB. This split of the USPS from all other federal employees/annuitants is a legal requirement resulting from the passage of the Postal Service Reform Act of 2022, and it affects everyone, regardless of age or employment status.

In terms of what you need to do, there’s good news: in many cases, you won’t need to do anything. This is because in cases where the PSHB offers a plan similar to your FEHB plan, the USPS will send you a letter in late October showing the new plan into which the USPS intends to “crosswalk” you. When you receive the letter, if you agree with it, you just do nothing. But, in cases where there isn’t a roughly equivalent option available, you can shop for a plan that meets your needs. The USPS will send plan details by mail once they’re available.

2. If you’re a Post Office retiree, you may have the opportunity to sign up for Medicare Part B penalty-free during the Special Enrollment Period (SEP) taking place April 1 – September 30, 2024. This change is an option but is not required.

Generally speaking, folks who don’t sign up for Medicare Part B when they turn 65 or retire, whichever is later, incur a 10% penalty for every year they wait beyond that window of opportunity, should they decide to enroll at a later date.

But, because Medicare Part B has never been a requirement for USPS retirees to keep their Post Office health plan (though it will be required for almost all new retirees as of Jan. 1, 2025), many USPS retirees never took advantage of Medicare Part B when they initially had the chance.

This is why, as an incentive to bring more folks into Medicare, the USPS is offering to pay penalties on behalf of those who enroll late. If you’re eligible for this, you should have received a letter from the USPS in March letting you know.

There are a few reasons why you might consider taking advantage of the SEP offer. For one thing, when combining Medicare Part B with your Post Office health insurance, OPM says your Post Office plan will often “waive its copayments, coinsurance, and deductibles for Part B services.” Also, some of the carriers are currently offering to reimburse you for some or all of your Part B monthly premium ($177/mth. for most people). And finally, Medicare Part B often has stronger coverage for “durable medical goods” than the Post Office health plan (i.e., wheelchairs, oxygen tanks, hospital beds in the home). So, particularly for folks who have health issues and visit the doctor often, there can end up being a cost savings for taking Medicare Part B.

With regard to the PSHB plans, the USPS reports new plan details will be available as of September 15, and they’ll be sent out via hard mail in the weeks that follow. Details will also be offered on a new PSHB centralized online system available in late October, and enrollment in the new plans will be available on that site.

Navigating these changes may seem daunting but keep an eye out for the upcoming USPS mail communications, and you’ll do just fine. If you have questions about your own situation, resources for getting those answered are below.  Remember, health coverage is an essential part of your retirement security so it’s worth choosing wisely. Here’s hoping this information makes your decisions a bit easier.

RESOURCES:

PSHB webinars every 2 weeks until December 5th are available: https://www.keepingposted.org/pshb-lunch-learn-seminars.htm.

For questions about the PSHB transition or Medicare SEP, you can call 813-712-7742 or email retirementbenefits@usps.gov.

Lacie Harmon is a Federal Benefits and Retirement Specialist who helps federal employees understand and maximize their benefits, both during employment and retirement years. She teaches regularly at federal agencies and offers monthly federal retirement webinars. Past classes taught include for clients such as the FAA, USDA and GAO, as well as union locals of the APWU and NALC. Web: https://www.lacieharmon.com | Facebook | Email: LHarmon@thefederalbenefitsgroup.com

Warm Regards,

Lacie

Lacie Harmon
818-370-6490
Benefits/Retirement Counselor
The Federal Benefits Group

www.lacieharmon.com

P.S. Thinking about retiring in the next 5 years? Click here to set time for a complimentary Retirement Income Review with me.

PEN Notice: Please use the contact information for Lacie above if you have questions or, visit her website www.lacieharmon.com.