Key Takeaways

• You need to understand how Medicare works with the new Postal Service Health Benefits (PSHB) Program to make smart health coverage choices in 2025.

• The timing of your retirement, Medicare eligibility, and enrollment status will directly affect your PSHB coverage and costs moving forward.

Welcome to a New Era of Postal Health Benefits

If you’re a current or retired USPS employee, 2025 brings a big shift in how your health coverage works. The Postal Service Health Benefits (PSHB) Program has officially replaced FEHB for USPS workers and retirees, and it’s here to stay. So if you’re trying to figure out how Medicare fits into this new world, you’re definitely not alone.

There are a lot of moving parts—especially if you’re getting close to retirement or already enrolled in Medicare. Let’s break this down so you can make sense of it all and choose a plan that truly works for your situation.

Medicare and PSHB: Two Systems That Now Work Together

Starting this year, Medicare and PSHB plans are linked more tightly than ever. If you’re a USPS annuitant or retiree and you’re eligible for Medicare Part A and Part B, enrolling in both is more than just recommended—it’s expected in most cases. Here’s what that looks like:

• If you retired after January 1, 2025, you’re required to enroll in Medicare Part B to keep your PSHB plan.

• If you retired before January 1, 2025, you’re not required to enroll in Medicare Part B, but doing so could still lower your out-of-pocket costs.

• If you’re still working and not yet 65, Medicare enrollment isn’t mandatory—but it will matter down the line.

Timing Matters More Than You Think

The year you retire and your age when you do it determines how Medicare interacts with your PSHB plan. So here’s what to consider:

Retiring Before 65

If you’re planning to retire before you’re eligible for Medicare, your PSHB plan will act much like your old FEHB coverage. You won’t need Medicare just yet, but you’ll want to prepare for that transition when you turn 65.

Turning 65 While Still Working

You may choose to delay Medicare Part B without penalty if you’re still employed by USPS and have active PSHB coverage. But be sure to enroll during your Special Enrollment Period once you retire, or you could face late penalties.

Retiring at 65 or Older

If you’re 65 or older and retiring now, make sure you’re enrolled in both Medicare Part A and B. That’s your golden ticket to full PSHB benefits.

What Medicare Covers (and What PSHB Covers on Top)

Here’s the general rule: Medicare becomes your primary payer when you retire and enroll, and PSHB becomes the secondary payer. This combo is designed to give you broader coverage and help cut down your costs.

• Medicare Part A helps with inpatient hospital care.

• Medicare Part B covers outpatient services, doctor visits, and preventive care.

• PSHB plans can fill the gaps, like deductibles, coinsurance, and additional benefits not covered by Medicare.

Your PSHB plan may also include a prescription drug plan that works with Medicare Part D to keep your medication costs under control.

What If You Skip Medicare Part B?

If you’re eligible and don’t enroll in Part B when required, you could lose your PSHB coverage entirely if you retired after 2025. For earlier retirees, skipping Part B doesn’t kick you off the plan, but it could make your costs a lot higher since PSHB will assume Medicare is your primary payer.

So unless you’re exempt, skipping Medicare Part B isn’t just risky—it could be costly.

Understanding Costs and Premiums

You already know healthcare isn’t free. But understanding how costs are shared between Medicare and PSHB helps you plan better:

• Medicare Part A is usually premium-free for most USPS retirees.

• Medicare Part B comes with a monthly premium. The standard premium in 2025 is $185, but it may be higher based on your income.

• PSHB premiums are shared between you and the government. The government continues to cover about 70% of your total premium.

Your out-of-pocket costs like copays and deductibles will depend on how well your PSHB plan complements your Medicare benefits. Enrolling in both can significantly lower your share of these costs.

The Medicare Part D Angle

If you’re enrolled in a PSHB plan and also have Medicare, your prescription coverage will typically be through a Medicare Part D Employer Group Waiver Plan (EGWP). That’s just a fancy way of saying you’ll get enhanced Part D benefits through your PSHB plan.

Benefits of this setup include:

• Lower drug costs

• No separate enrollment process for Part D

• No late enrollment penalties

Just make sure the plan you choose includes this coordination with Medicare Part D, especially if you take regular prescriptions.

Watch for These Deadlines

Staying on track with enrollment deadlines is key to avoiding penalties or coverage gaps. Here’s what to remember:

• Initial Enrollment Period (IEP): 3 months before, the month of, and 3 months after your 65th birthday.

• Special Enrollment Period (SEP): Available if you delay Medicare Part B while actively working. Begins when you retire.

• Open Season (Nov–Dec): This is your annual window to switch or update your PSHB plan.

Missing any of these windows could lock you into the wrong plan or stick you with a late enrollment penalty.

How to Compare Your Options the Smart Way

You’ve got plenty of PSHB plans to choose from. But not all of them work the same way with Medicare. As you compare options:

• Look for plans that waive or reduce cost-sharing when paired with Medicare.

• Pay attention to how the plan handles prescription drugs under Medicare.

• Check for any Part B premium reimbursement—some plans offer that.

• Compare in-network versus out-of-network coverage and whether you can use any provider with Medicare.

The more your PSHB plan complements Medicare, the better protected you’ll be overall.

Already Retired? Here’s What You Need to Do

If you’re already retired and enrolled in FEHB, your plan has automatically moved you into a similar PSHB plan for 2025. But that doesn’t mean you should ignore your choices:

• Review your new PSHB plan to ensure it meets your needs.

• Compare it to other PSHB options during Open Season.

• Check whether you’re enrolled in both Medicare A and B to keep costs down.

You’re not stuck—you can make changes, and it’s worth doing the homework.

Still Working? Plan Ahead Now

If you’re still employed by USPS, don’t wait until you hit retirement age to think about this. Here’s how to prep:

• Know your Medicare eligibility age: 65.

• Decide when you want to retire and how that lines up with your enrollment periods.

• Talk with HR to get a breakdown of your PSHB options as a future annuitant.

• Make sure you’re not caught off guard when Medicare kicks in.

A little planning now can save you a lot of stress later.

Your Health Plan Should Work for You—Not the Other Way Around

You don’t have to guess your way through this. When Medicare and PSHB are used together the right way, you can get stronger coverage with fewer surprise costs. The key is staying informed, enrolling on time, and choosing a plan that fits your health needs and financial situation.

If you’re unsure where to start, don’t go it alone. Get in touch with a licensed agent listed on this website who can help you review your options and make a smart choice.