Federal Employee Health Insurance

Until 2025, the Federal Employees Health Benefits (FEHB) program was the sole program for federal employees and retirees, including those working for, or who had retired from, the semi-corporate U.S. Postal Service. The Postal Service Health Benefits (PSHB) began in calendar year 2025 as a largely parallel program for Postal Service employees and retirees, under terms of a 2022 Postal Service reform law.

Unlike many private sector health benefit plans, they provide coverage without physical examinations or a waiting period, place no restrictions on age or physical condition, offer a wide range of plans to choose from, cannot be canceled during a plan year, and apply to retirees so long as they meet certain criteria.

The cost is shared by the enrollee and the government as the employer/former employer (in the case of the FEHB) and the Postal Service (in the case of the PSHB), with the enrollee share about 30 percent of the total cost. Active employees generally pay premiums through biweekly payroll withholding, and retirees through withholdings from their monthly annuity payments.

The programs offer largely the same coverage with generally comparable premium rates. However, they differ in ways including:

· The PSHB has fewer insurance carriers, although it offers plans parallel to those that cover the large majority of FEHB enrollees.

· Those retiring from the Postal Service in 2025 and afterward generally must enroll (and stay enrolled) in Medicare Part B and pay its premiums to be eligible for PSHB coverage. That does not apply to those retired before 2025, to those still employed by the USPS who reached age 64 or older before 2025, or to post-2024 retirees living overseas or who are receiving care through the VA or Indian Health Service. There is no Medicare Part B enrollment requirement in the FEHB.

· In the PSHB, prescription drug coverage for retirees and their covered family members is integrated with Medicare Part D; in the FEHB, enrollment in Part D is voluntary and generally is declined on grounds that it mostly duplicates prescription drug benefits provided by FEHB plans at an additional cost.

Note: Postal Service injury compensationers are not required to enroll in Medicare Part B to enroll in a PSHB plan, regardless of Medicare Part A entitlement. At retirement, compensationers may have to enroll in Medicare Part B, if eligible, unless they meet one of the above exceptions.

On the launch of the PSHB, postal employees and retirees moving from the FEHB were given the opportunity to choose PSHB coverage in the annual open season in late 2024. Those who made no choice were transferred by default into the parallel PSHB plan where one existed; where one didn’t exist, those who made no election were transferred into the lowest-cost national PSHB plan that met certain other standards, the Blue Cross/Blue Shield FEP Blue Focus plan.

Note: Postal employees and retirees may be in the FEHB as a covered family member of a spouse eligible for the FEHB through their own federal employment.

The creation of the PSHB did not change eligibility of Postal Service employees and retirees under the life insurance, dental-vision insurance or long-term care insurance programs.

Key similarities of the programs are:

· Employees who have been covered by either program for at least the five years before retirement (or from their first opportunity to enroll, if after) can carry coverage into retirement and continue it as long as they don’t cancel it. Waivers of this five-year coverage requirement are allowed in limited circumstances, as described below.

· Premium rates are the same for retirees as for active employees, except that retirees pay premiums on a monthly basis rather than biweekly, and they are not eligible to pay them on a pre-tax basis as described below.

· Retirees may make the same types of changes in coverage during annual open seasons or due to life events applying to active employees but should note that generally they may not reenroll if they voluntarily end coverage, unless they return as rehired annuitants into a job that confers eligibility.

Premiums, deductibles, copayments, and coinsurance amounts vary across plans. Many plans offer two or more options with different premiums and levels of coverage. Even within individual plans, enrollees may be offered a lower deductible and coinsurance amount if they choose to use services, such as a physician or hospital provider, in the plan’s network.

All plans cover hospital, surgical, physician, and emergency care within guidelines set by the Office of Personnel Management. OPM also requires plans to cover certain special benefits including prescription drugs (which may have separate deductibles and coinsurance); certain preventive care services; mental health care with parity of coverage for mental health and general medical care coverage; child immunizations; tobacco cessation benefits; fertility treatments; anti-obesity treatments; and limits on an enrollee’s total out-of-pocket costs for a year, called the catastrophic limit. Plans have leeway to determine exact terms within the general guidance.

Many FEHB and PSHB plans offer cost savings to their enrollees who are also enrolled in Medicare Part B, such as Part B premium reimbursement, waived deductibles, and waived cost-sharing for certain medical services. Details are in plan brochures; for the PSHB, also see www.keepingposted.org/assets/pdf/pshb-cost-savings-for-medicare-enrollees.pdf.

Generally, once an enrollee’s covered out-of-pocket expenditures reach a “catastrophic limit,” the plan pays 100 percent of covered medical expenses for the remainder of the year. Plans must also include certain cost-containment provisions, such as offering preferred provider organization networks in fee-for-service plans and requiring hospital pre-admission certification.

Premium rates for both programs are at www.opm.gov/healthcare-insurance/healthcare/plan-information/premiums.

Additional information specific to the FEHB is at www.opm.gov/healthcare-insurance/healthcare; additional information specific to the PSHB is at www.opm.gov/healthcare-insurance/pshb and at www.keepingposted.org/assets/pdf/guide-to-understanding-the-pshb-program.pdf.

See also OPM’s FEHB Plan Comparison Tool

Self Only, Self Plus One, Self and Family

The three levels of enrollment are self only, which provides benefits only to the enrollee; self plus one, which provides benefits to the enrollee and one eligible family member; and self and family, providing benefits to the enrollee and all eligible family members. These enrollment levels may be changed during an open season, or outside of an open season due to certain life events as described below, so long as the change is consistent with the event.

An enrollee with more than one eligible family member may enroll in self plus one and would have to designate the second person to have coverage, but that would mean that any other family member would have to get health coverage elsewhere.

Also, the second person can be changed during an open season or due to certain life events, although also only if consistent with the event. For example, an enrollee with a spouse and one eligible child and who is insuring only the child could switch coverage to the spouse if the child hits the age 26 cutoff for coverage. (Note: The carrier may request documentation to prove the eligibility of the newly designated family member.) However, if a childless couple has or adopts a child, the enrollee could not switch coverage from the spouse to the child—although in that case the enrollee could switch to family coverage.

Choosing the self only option isn’t just for someone who is either unmarried and/or has no eligible children. It’s also an option for married couples. In some cases both work for the federal government and have an entitlement to enroll in the FEHB or PSHB on their own. One attraction of having separate coverage is that it allows each of them to tailor their plan selection to their specific needs.

Another is that there are times when the premium cost of two self only enrollments will be less than that for one self plus one or one self and family enrollment. However, keep in mind that each enrollee will have to meet the co-insurance and deductible requirement plus the catastrophic limit on his or her own. Also, one of the enrollees would have to elect a self plus one or self and family plan to obtain coverage for any eligible child or children.

There are also situations where one of the spouses has a job outside the federal government and where coverage is provided at little or no cost, at least for self-only enrollment. In such cases it might make sense to have two self-only plans—or, if there is one eligible child, one self-only and one self plus one enrollment.

However, it’s not uncommon for employees retiring from non-federal jobs to lose their health benefits coverage or have it substantially reduced. It also happens when they get laid off. Also, while it’s easy to switch to self plus one or to self and family coverage during an open season, it would be impossible if you were to die before doing so. If that happened, your widow(er) (and children, if any) wouldn’t be eligible for coverage.

Another possibility is for the federal spouse to be covered under the non-federal spouse’s plan and not enroll at all. If that non-federal coverage were to suddenly end, both could be left without health insurance, although possibly with rights for temporary continuation with no employer share of the premium. If you were a federal employee, you could enroll during the next open season; but even if you did so, in most cases you’d have to be enrolled in the FEHB and/or PSHB program for the five consecutive years before you retired to be eligible to carry that coverage into retirement. If you were a retiree when that non-federal coverage ended, you wouldn’t be eligible to enroll.

Note: A court order such as a divorce decree could impact an enrollee’s freedom of choice among the options by mandating coverage for a child/children, and potentially also the choice of plans if the enrollee lives in a different area than the child/children.

Employees who have been covered by the FEHB for at least the five years before retirement (or from their first opportunity to enroll, if after) can carry coverage into retirement and continue it as long as they don’t cancel it. Waivers of this five-year coverage requirement are allowed in limited circumstances.

All plans cover hospital, surgical, physician, and emergency care within guidelines set by OPM. OPM also requires plans to cover certain special benefits including prescription drugs (which may have separate deductibles and coinsurance); mental health care with parity of coverage for mental health and general medical care coverage; child immunizations; and limits on an enrollee’s total out-of-pocket costs for a year, called the catastrophic limit. Plans have leeway to determine exact terms within the general guidance.

Choosing Among Types of Plans

You can choose from among managed fee for service (FFS) plans, regardless of where you live, or plans offering a point of service (POS) product and health maintenance organizations (HMO) if you live (or sometimes if you work) within the area serviced by the plan. You will find managed care features in all the plans. Common features of managed care are pre-approval of hospital stays, the use of primary care providers as “gatekeepers” to coordinate your medical care, and networks of physicians and other providers.

In prepaid plans, your covered health services are pre-funded by your premium and the government’s contribution toward the cost of your health insurance. Generally you must use specified plan physicians, hospitals and other providers at designated locations, although care elsewhere may be available after a referral.

FFS plans reimburse you or your physician or hospital for covered services rather than provide or arrange for services as prepaid plans do. FFS plans allow you to choose your own physicians, hospitals and other health care providers without a referral. Some are open to all enrollees, but others require that you join the organization that sponsors the plan. Some plans limit enrollment to certain employee groups.

A plan offering a point of service product has rules about doctor choice and access to specialists, but you can choose any doctor you like and see specialists without referrals if you agree to pay more. Membership requirements and/or limitations also apply to any POS product the FFS plan may be offering.

There are two other major variants. In “consumer-driven” options, enrollees get a sum of money to pay toward health costs, then pay a deductible, and then have standard fee-for-service or HMO coverage. In “high-deductible health plans,” enrollees have a tax-favored account—typically, a health savings account for those not eligible to draw Medicare benefits, and a health reimbursement arrangement for those who are—that can be used to pay the deductible and certain other qualifying health expenses.

In addition, Medicare-sponsored coordinated care plans are an option for anyone who is age 65 or older. These plans generally are prepaid plans. If you join such a plan, you may suspend your FEHB enrollment and later reenroll in the FEHB program. Ask your local Social Security office for the names of the MCCPs in your area.

Coverage of family members

Eligible family members are your spouse and your children under age 26 (health benefits can continue after the age cutoff if the person is incapable of self-support because of a disability incurred before the cutoff), including your legally adopted children, recognized children born out of wedlock, and, under certain circumstances, foster children.

Children may remain covered up to age 26 even if they are eligible for employer-sponsored health insurance on their own; if they have such insurance, FEHB/PSHB becomes the secondary payer. Coverage for married children does not extend to their spouses or to their own children.

Note: Children under age 26 who are federal employees themselves are covered under a parent’s family policy unless the parent is in a health maintenance organization plan and the child lives outside its coverage area, or unless the child has a spouse and/or child or children of his or her own for whom the child wishes to get coverage. Unless one of those exceptions applies, a child is covered by a parent’s family coverage and cannot enroll on his or her own account until turning age 26, at which point enrollment will be allowed, even outside an open season, as a qualifying life event.

A covered stepchild remains eligible after a divorce, end of a domestic partnership, or the death of the spouse or partner if the child continues to live with the enrollee in a parent-child relationship.

To be eligible, a foster child must live with you as the sponsor in a parent-child relationship, you must be the primary source of support for the child and you must expect to raise the child to adulthood. You must sign a certification that the foster child meets those requirements.

Other relatives, such as parents or a grandchild (unless the grandchild qualifies as a foster child), are not eligible for coverage as family members even if they live with and are dependent on you.

Your spouse will lose eligibility for coverage upon divorce or annulment of the marriage, unless made eligible under a court order. A child loses eligibility on hitting age 26, unless disabled as described above.

An employing office may require an enrollee to verify eligibility of family members during initial enrollment and when family members are being added to an existing enrollment due to a qualifying life event such as marriage (in the latter case, for retirees OPM may issue such a requirement). Carriers similarly can impose such requirements in situations in which premiums do not change such as adding a family member to an existing family enrollment.

Enrollees may be required to produce documents such as a marriage license and proof of common residency for a marriage; a government-issued birth certificate for a child; an adoption certificate or decree for an adopted child; and a medical certificate of disability for a child age 26 or older who is incapable of self-support because of a condition arising before that age. If the documentation is not considered sufficient, enrollees are to be given a chance to produce sufficient documents, and a reconsideration procedure is available in the case of a decision of ineligibility.

Documentation requirements and other eligibility policies are www.opm.gov/healthcare-insurance/healthcare/eligibility.

Note: Under certain circumstances voluntary removal from coverage of an eligible family member is allowed, primarily so that the family member may enroll in health insurance sponsored by his or her own employer. In such situations the enrollee may downgrade to a less expensive type of enrollment, for example from family coverage to self plus one or from self plus one to self-only.