Key Takeaways

• Turning 65 isn’t just a Medicare milestone—it changes how your PSHB plan works, especially if you’re eligible for Medicare Part B.

• If you don’t enroll in Medicare Part B when required, you may lose significant benefits under your PSHB plan or face higher out-of-pocket costs.

Medicare and PSHB: A Dual System You Can’t Ignore

If you’re a Postal Service annuitant or family member enrolled in the Postal Service Health Benefits (PSHB) program, your 65th birthday isn’t just a personal milestone. It’s a critical turning point for your health coverage. That’s because your eligibility for Medicare directly affects how your PSHB plan operates. Starting in 2025, Medicare and PSHB are more intertwined than ever, and ignoring the rules can result in reduced benefits or even loss of drug coverage.

Understanding the timing, enrollment steps, and consequences of how Medicare integrates with PSHB ensures you keep your full benefits and avoid preventable costs.

How PSHB Treats Medicare Eligibility

Under the PSHB program, if you become eligible for Medicare Part A and Part B, your PSHB plan expects you to enroll in both, especially Part B. While Part A is generally premium-free for those with sufficient work history, Part B requires a monthly premium. Even so, not enrolling in Part B when required could have real consequences.

As of 2025, Medicare-eligible annuitants and family members must enroll in Part B to retain full PSHB medical and prescription coverage, unless they qualify for one of the limited exemptions.

Who Is Required to Enroll in Part B?

You must enroll in Medicare Part B if:

• You are a Postal Service annuitant or family member enrolled in PSHB.

• You are age 65 or older, or otherwise eligible for Medicare.

Exemptions Apply If You:

• Retired on or before January 1, 2025.

• Are an employee who was age 64 or older as of January 1, 2025.

• Live outside the United States.

• Have coverage through Veterans Affairs or the Indian Health Service.

What Happens If You Don’t Enroll in Medicare Part B?

Failure to enroll in Medicare Part B when required may mean:

• You lose access to your PSHB prescription drug benefits.

• You pay higher out-of-pocket costs for medical services.

• You face a late enrollment penalty from Medicare, increasing your Part B premium permanently.

In short, your PSHB coverage is not designed to work alone once you reach Medicare eligibility. The expectation is for Medicare to be your primary payer, with PSHB acting as secondary.

Medicare Part B Timeline at Age 65

Your Initial Enrollment Period (IEP) for Medicare begins three months before the month you turn 65, includes your birthday month, and extends three months after. This gives you a seven-month window to enroll in Medicare Parts A and B.

If you miss that window and aren’t exempt, you must wait for the General Enrollment Period (January 1 to March 31). Coverage under that route only starts July 1, and you may face penalties.

Prescription Drug Coverage Is Tied to Medicare

Starting January 1, 2025, most PSHB plans automatically enroll Medicare-eligible annuitants and family members into an Employer Group Waiver Plan (EGWP) for prescription drugs. This is a Medicare Part D plan coordinated with your PSHB coverage.

However, this only works if you’re enrolled in Medicare Part B. If you opt out of Part B, you lose eligibility for this drug coverage. And once lost, re-enrollment opportunities are extremely limited.

What Does EGWP Include?

• A $2,000 annual cap on out-of-pocket drug costs.

• A $35 monthly cap on insulin.

• Access to an expanded nationwide pharmacy network.

Without Medicare Part B, these savings and protections are off the table.

Cost Sharing: Medicare First, PSHB Second

Once enrolled in Medicare, your PSHB plan changes the way it pays your claims. Medicare becomes your primary payer, and PSHB becomes secondary.

Here’s what that means:

• Medicare Part B pays 80% of covered outpatient services.

• Your PSHB plan picks up all or most of the remaining 20%, depending on your plan.

Many PSHB plans waive deductibles, coinsurance, and copayments for Medicare-enrolled members, providing real savings for those who coordinate both coverages.

Premium Reimbursements: A Lesser-Known Advantage

Some PSHB plans offer a partial or full reimbursement of your Medicare Part B premium as a benefit. While this varies by plan, it’s an incentive that helps offset the cost of Part B enrollment.

But again, this is only available if you enroll in Part B. No enrollment means no reimbursement.

Planning for Age 65: What You Should Do

If you’re approaching Medicare age, take these steps to prepare:

1. Check Your Eligibility Timeline

Use the seven-month Medicare IEP to plan your enrollment. Mark your calendar three months before your 65th birthday.

2. Review Your Exemption Status

If you think you might qualify for an exemption, confirm it in writing. Don’t assume your status.

3. Understand Part B Costs

For 2025, the standard monthly Part B premium is $185, with higher amounts for those with higher incomes. The annual deductible is $257.

4. Review Your PSHB Plan Brochure

Look for how your plan coordinates with Medicare. Some include detailed information about secondary coverage and out-of-pocket savings.

5. Know the Consequences of Opting Out

If you decline Part B without an exemption:

• Your PSHB plan will not function as expected.

• You may be disenrolled from your prescription drug coverage.

• You will owe late enrollment penalties if you join later.

Post-65 Enrollment Periods and Late Enrollment

If you didn’t sign up for Medicare at 65, you still have options, but they come with conditions:

• General Enrollment Period: January 1 to March 31. Coverage starts July 1.

• Special Enrollment Period (SEP): If you had employer coverage and are retiring, you may qualify for a penalty-free SEP.

However, for PSHB, you must maintain continuous Part B enrollment to remain eligible for drug coverage and full medical benefits.

What About Those Under 65 With Medicare?

Some Postal Service annuitants or dependents qualify for Medicare before age 65 due to disability. In these cases, the same rules apply: if you’re eligible for both Medicare and PSHB, you must have both Part A and Part B to maintain full benefits.

The requirement to enroll in Part B applies regardless of your age once you are eligible for Medicare.

Medicare Coordination Doesn’t Replace PSHB

Enrolling in Medicare doesn’t mean you drop your PSHB plan. Instead, they work together to enhance your coverage.

You continue paying PSHB premiums, but you may find your overall healthcare costs are lower thanks to Medicare picking up a large share of expenses. The coordination allows for more predictable costs and often less paperwork due to automatic claims crossover between Medicare and your PSHB carrier.

Timeline of Key PSHB and Medicare Events in 2025

• January 1, 2025: PSHB officially replaces FEHB for Postal Service annuitants and employees.

• April to September 2024: Special enrollment window for Medicare Part B (now closed).

• November to December 2025: PSHB Open Season. You can change plans if desired.

• Anytime: Turning 65 triggers Medicare enrollment obligations within the 7-month window around your birthday.

Why Planning Ahead Is Critical

The integration between PSHB and Medicare is not passive. You are expected to take action when you become eligible for Medicare. Missing key dates or ignoring the requirement to enroll in Part B can lead to:

• Lost prescription drug benefits

• Higher costs for outpatient care

• Limited re-enrollment opportunities

• Permanent penalties

Proactively enrolling in Medicare and reviewing your PSHB coordination details before your 65th birthday can save you hundreds or even thousands of dollars per year.

Make Your Next Step an Informed One

Medicare may seem like a separate program for retirees, but once you turn 65, it directly shapes how your PSHB benefits function. Understanding this relationship helps you make informed decisions that protect your access to care and financial security.

If you’re nearing 65 or already eligible for Medicare, take time to assess your enrollment status, exemptions, and how your PSHB plan aligns with Medicare rules.

If you’re unsure where to begin or need help reviewing your options, get in touch with a licensed agent listed on this website to walk you through your choices and ensure you don’t miss a critical step.