Key Takeaways

• Even if you do not use Medicare Part B immediately, PSHB plans in 2025 still expect eligible annuitants and family members to enroll to retain full benefits.

• Delaying Part B enrollment can result in the loss of drug coverage under PSHB and restrict future re-enrollment options.

Why Part B Enrollment Is No Longer Optional for Many

In 2025, the Postal Service Health Benefits (PSHB) Program introduces a major shift in how Medicare coordination works for annuitants and their eligible family members. If you or a family member are Medicare-eligible, your PSHB plan likely requires enrollment in Medicare Part B—even if you do not plan to actively use it right away.

This is not just a recommendation. In many cases, it is a condition for keeping your full PSHB benefits, especially prescription drug coverage. This change applies to:

• Postal Service annuitants who become eligible for Medicare on or after January 1, 2025

• Medicare-eligible family members covered under a PSHB plan

If you fall into one of these categories, enrolling in Medicare Part B when first eligible is essential to prevent coverage disruptions.

Understanding the New PSHB-Medicare Coordination Rules

The Postal Service Health Benefits Program replaces FEHB coverage for postal retirees and active employees in 2025. Unlike the broader FEHB system, PSHB has unique integration requirements with Medicare, particularly regarding Part B.

Who Must Enroll in Part B?

You are required to enroll in Medicare Part B if:

• You are a Postal Service annuitant or family member who becomes Medicare-eligible on or after January 1, 2025

• You are already Medicare-eligible but choose to enroll in a PSHB plan during or after 2025

Certain groups are exempt from this requirement, including:

• Those who retired on or before January 1, 2025, and are already Medicare-eligible but not enrolled in Part B

• Employees aged 64 or older as of January 1, 2025

• Residents living abroad where Medicare does not apply

• Beneficiaries receiving health coverage from the VA or Indian Health Services

You May Not Use Part B Immediately—But It Still Matters

It’s common to think that if you’re healthy or rarely visit doctors, you can skip Medicare Part B. But under PSHB, even if you are not using Part B services today, your plan benefits are designed with the assumption that Medicare will be your primary insurer.

Without Part B:

• Your PSHB plan may pay less or nothing for services Medicare would have covered

• You lose access to integrated prescription drug coverage

• Your out-of-pocket costs can be much higher

This is not a penalty imposed by Medicare but a direct result of how PSHB plans now coordinate benefits.

The Critical Impact on Prescription Drug Coverage

If you are Medicare-eligible and choose not to enroll in Part B, your PSHB plan will automatically disenroll you from its Medicare-integrated prescription drug benefit, which is based on Medicare Part D rules. This benefit includes:

• A $2,000 annual out-of-pocket cap for prescription drug costs

• A $35 monthly cap on insulin

• Coverage for a broad network of retail and mail-order pharmacies

Without Part B, you forfeit this enhanced coverage. That means you’ll be left with significantly reduced drug benefits or none at all.

Even worse, opting out of Part B now makes it difficult to rejoin later. Re-enrollment opportunities are limited, and you may have to wait until a future Open Season or experience a qualifying life event. By then, you may be subject to late enrollment penalties or delayed coverage.

What Happens if You Delay Part B?

If you miss your Initial Enrollment Period (IEP) when first eligible for Medicare, your next chance to sign up is the General Enrollment Period (GEP), which runs from January 1 to March 31 each year. However, coverage from GEP enrollment only starts in July, creating a coverage gap.

You may also face a late enrollment penalty of 10% for each 12-month period you delayed enrollment without creditable coverage. This penalty is added to your Part B premium for life.

Given the structure of PSHB, delaying Part B can result in:

• Immediate loss of drug benefits

• Loss of reduced deductibles and coinsurance available only to Part B enrollees

• Higher out-of-pocket medical costs

• Limited opportunities to rejoin Part B and restore full PSHB benefits

The Financial Implications of Skipping Part B

In 2025, the standard Part B premium is $185 per month, with an annual deductible of $257. While this may seem like an added cost, it enables access to:

• Lower cost-sharing for doctor visits, lab work, and outpatient services

• Waived or reduced deductibles under PSHB for enrollees with Part B

• Part D integration that caps your total out-of-pocket costs

The real cost of skipping Part B is often higher than the monthly premium, especially when you account for:

• Full responsibility for 100% of the cost of outpatient services that Medicare would have covered

• Loss of enhanced prescription benefits under your PSHB plan

• No access to Medicare-coordinated benefits like wellness visits and preventive screenings

Your PSHB Plan Assumes Medicare Pays First

By design, PSHB plans for Medicare-eligible enrollees are secondary payers. This means they expect Medicare to process and pay eligible claims first. Without Part B, there’s no primary payment for outpatient care, and your PSHB plan is not obligated to fill the gap.

In practice, this could leave you with:

• Full bills for Part B-covered services (like surgeries, diagnostics, or emergency care)

• Denials from your PSHB plan for services not coordinated through Medicare

PSHB plans are not structured to act as standalone coverage for Medicare-eligible members who opt out of Part B.

How Medicare and PSHB Work Together in 2025

When enrolled in both programs:

• Medicare pays first for eligible services

• PSHB covers most of the remaining costs

• Prescription drug coverage through an Employer Group Waiver Plan (EGWP) is automatically included

In this setup, your healthcare costs are lower, billing is streamlined, and coverage gaps are minimized.

Your PSHB plan uses your Medicare enrollment to determine:

• How much to pay for services

• Whether to reduce your deductible

• Eligibility for lower copayments or coinsurance

• Your access to enhanced prescription drug protection

When Should You Enroll in Part B?

Your Initial Enrollment Period lasts for 7 months:

• Begins 3 months before the month you turn 65

• Includes your birthday month

• Ends 3 months after your birthday month

If you enroll during the first 3 months, your Part B coverage starts the month you turn 65. If you enroll later, the start date may be delayed, creating potential gaps.

For 2025 PSHB plans, if you or a family member turns 65 and becomes Medicare-eligible, it is crucial to:

• Apply during your IEP to avoid coverage gaps

• Ensure Part B is active before January 1 if your PSHB plan starts at the beginning of the year

Missing this timeline could result in limited benefits under PSHB, especially in the first year of retirement.

If You’re Already Enrolled in Part B

If you’re already enrolled in Part B and join a PSHB plan in 2025, your benefits are maximized. Many PSHB plans:

• Reduce your deductible automatically

• Offer lower copayments

• Give access to integrated drug coverage

• Waive or reduce coinsurance for hospital and outpatient care

Your coordination is seamless, and you will not face the disruptions experienced by those who delayed or declined Part B.

Enroll Once, Stay Covered for Life

Part B enrollment is a one-time action with lasting value. Once you are in, you retain eligibility for:

• Comprehensive PSHB benefits

• Seamless coordination with Medicare

• Cost-protective drug coverage

Unless you cancel your Part B coverage or lose eligibility, you remain protected. And you avoid costly enrollment penalties, loss of benefits, or restricted access to future coverage enhancements.

PSHB and Medicare: Know What’s at Stake

The transition to PSHB brings improved integration, but also stricter expectations. Enrolling in Medicare Part B is not just a personal health decision. It’s now a requirement that affects your eligibility for PSHB drug coverage and overall plan value.

To keep your full benefits:

• Know when you become Medicare-eligible

• Enroll in Part B during your initial window

• Understand how PSHB relies on your Medicare coordination

Delaying this step, even if you’re healthy, can lead to lost coverage, higher costs, and limited options later. If you need support, get in touch with a licensed agent listed on this website to review your Medicare status and enrollment strategy.