Key Takeaways

• If you’re enrolled in a PSHB plan and eligible for Medicare in 2025, you can no longer treat Medicare as optional. It now directly impacts your coverage, benefits, and out-of-pocket costs.

• The PSHB program links with Medicare Part B for integrated benefits, and failing to enroll could result in reduced access to prescription drug coverage and higher expenses.

Medicare Becomes a Central Piece of PSHB in 2025

If you’re a postal retiree or eligible family member enrolled in a Postal Service Health Benefits (PSHB) plan, the rules have changed significantly in 2025. Medicare, particularly Part B, is no longer something you can afford to ignore or postpone. Unlike the older FEHB system, the PSHB program has a structured relationship with Medicare, and your enrollment decisions carry serious consequences.

Starting this year, most Medicare-eligible annuitants and family members must enroll in Medicare Part B to maintain full PSHB coverage. This requirement is part of the broader shift from FEHB to PSHB, designed specifically for Postal Service employees and retirees. Let’s explore what this means for you, why timing matters, and how your healthcare strategy must adjust moving forward.

Who Must Enroll in Medicare Part B?

The mandate to enroll in Medicare Part B applies to:

• Postal Service annuitants who turned 65 before or during 2025 and are Medicare-eligible

• Covered family members who are also Medicare-eligible

However, there are key exemptions:

• You retired on or before January 1, 2025, and were not already enrolled in Medicare Part B

• You are an active employee aged 64 or older as of January 1, 2025

• You reside overseas

• You receive health benefits through the Department of Veterans Affairs (VA) or Indian Health Services (IHS)

If you fall into one of these categories, you are not required to enroll in Part B to keep your PSHB plan. Everyone else must take action.

The Enrollment Timeline Matters

The 2024 Special Enrollment Period (SEP) for Medicare Part B ran from April 1 to September 30, 2024. This gave eligible retirees and family members a final window to enroll without penalty.

Now that it’s 2025, if you missed that SEP and are subject to the new rules, you may face permanent late enrollment penalties and gaps in your PSHB coverage.

If you’re turning 65 in 2025, your Initial Enrollment Period is your best opportunity. It lasts for 7 months:

• 3 months before the month you turn 65

• The month of your 65th birthday

• 3 months after your birthday month

Missing this window could create delays in coverage and additional costs.

What Happens If You Don’t Enroll?

If you’re required to have Medicare Part B and don’t enroll:

• You lose access to integrated prescription drug benefits, which are tied to a Medicare Part D Employer Group Waiver Plan (EGWP)

• You could face higher out-of-pocket costs for doctor visits, outpatient procedures, and other services Part B would normally cover

• You may lose eligibility for cost-saving benefits that PSHB plans provide when you’re enrolled in both Medicare and PSHB

In short, declining Part B can seriously weaken your healthcare protection under the PSHB system.

How Medicare Works With Your PSHB Plan

When you are enrolled in both Medicare Parts A and B, your PSHB plan typically acts as secondary payer. This means Medicare pays first, and your PSHB plan covers remaining eligible costs, often with reduced or waived copayments, coinsurance, and deductibles.

Some key advantages of combining Medicare and PSHB:

• Lower out-of-pocket spending: Many plans waive or reduce deductibles and copays if you have Medicare

• Prescription drug integration: Your PSHB plan includes a Medicare Part D EGWP, providing strong drug coverage without the coverage gap that existed under the old system

• Better provider access: Medicare is widely accepted, especially among providers who may not accept all PSHB networks

What About Medicare Advantage?

Some postal retirees consider enrolling in Medicare Advantage plans instead of Original Medicare. While this option remains available, you need to understand how it interacts with PSHB.

• If you opt for a Medicare Advantage plan, it could duplicate coverage you already get through PSHB

• Enrolling in Medicare Advantage does not exempt you from the PSHB Medicare Part B requirement

• Most PSHB plans coordinate best with Original Medicare (Parts A and B) rather than with Medicare Advantage plans

If you’re considering Medicare Advantage, review the specifics of your PSHB plan. You may not gain additional value—and you could create confusion in claims and coverage.

Prescription Drug Coverage Tied to Medicare

PSHB plans include Part D coverage through a special arrangement called the Employer Group Waiver Plan (EGWP). This prescription coverage:

• Has a $2,000 annual out-of-pocket cap in 2025

• Is integrated with your PSHB medical plan

• Covers a broad network of pharmacies and medications

But this benefit requires you to be enrolled in Medicare Part B. If you decline Part B, you automatically forfeit access to this integrated drug coverage under your PSHB plan.

There is no standalone drug plan option within PSHB for those who skip Medicare.

Cost Implications of Delaying Medicare Part B

If you delay enrolling in Medicare Part B past your eligibility window, you may face the following:

• Permanent monthly penalty added to your Part B premium—10% for every 12 months you delay

• Delayed effective date, leaving you temporarily without coverage for outpatient care

• Loss of drug benefits under PSHB

The longer you wait, the more expensive and disruptive it becomes. Enrolling on time ensures you don’t pay more than necessary or go without important coverage.

Medicare and Your PSHB Premiums

While Medicare enrollment doesn’t reduce your PSHB premium directly, the combination of benefits can make your total healthcare costs more manageable.

With Medicare Parts A and B paying first, your PSHB plan often pays most or all of what’s left. This could save you on:

• Specialist visits

• Diagnostic tests

• Surgery center fees

• Durable medical equipment

So while you’re paying for both Medicare and PSHB premiums, your total out-of-pocket expenses may be much lower than with PSHB alone.

Reviewing Your Plan Annually Is More Important Than Ever

Each year, you’ll receive an Annual Notice of Change (ANOC) from your PSHB plan. You should review this carefully:

• Look for changes to how the plan coordinates with Medicare

• Confirm the plan still includes the Medicare Part D EGWP drug coverage

• Ensure your providers and pharmacies remain in-network

From November to December during Open Season, you can make changes to your PSHB plan. Don’t skip this opportunity—especially if your Medicare status or household circumstances have changed.

You’re No Longer in the FEHB World

This bears repeating: PSHB is not the same as FEHB. While many plan names are familiar, the structure is different in 2025. Medicare now plays a formal role.

• FEHB allowed more flexibility with Medicare enrollment

• PSHB ties prescription drug coverage and cost-sharing benefits directly to Medicare

Assuming nothing has changed could result in lost coverage or surprise costs. This year, you must be more proactive.

Making Sense of PSHB and Medicare Together

This new landscape can feel overwhelming. You may be wondering:

• Do I need both PSHB and Medicare?

• What happens if my spouse has a different Medicare status?

• Can I delay Part B if I’m still working?

These are valid concerns, and each situation is a little different. But here’s what’s clear: you cannot treat Medicare enrollment as optional anymore. If you’re Medicare-eligible and not exempt, you must enroll in Part B to keep full PSHB benefits.

Take the Next Step With Confidence

If you’re unsure about your enrollment status or how Medicare will affect your PSHB plan, this is the time to get help. Speak with a licensed insurance agent listed on this website to review your current coverage, check for potential gaps, and ensure you’re enrolled in what you need.