Key Takeaways

• In 2025, Medicare Part D is automatically included in most PSHB plans for Medicare-eligible Postal retirees and family members, but opting out or mishandling enrollment can result in loss of drug coverage.

• Understanding how the PSHB-integrated Part D Employer Group Waiver Plan (EGWP) works is critical to maintaining continuous, cost-effective prescription drug benefits.

What the New Part D Integration Means in 2025

If you’re a Medicare-eligible Postal retiree or a family member covered under the Postal Service Health Benefits (PSHB) Program, you’ve probably heard that Medicare Part D prescription drug coverage is now baked into your plan. Starting January 1, 2025, this change automatically enrolls eligible individuals in a Part D Employer Group Waiver Plan (EGWP) if they’re also enrolled in Medicare Part A and/or B.

This integration is not just a convenience—it’s a foundational feature of how your prescription drug coverage works under PSHB now. It’s designed to streamline drug coverage and eliminate the need for you to shop for a standalone Medicare Part D plan. But just because it’s automatic doesn’t mean you can’t go wrong.

Who Gets Enrolled—and Who Doesn’t

Not everyone is automatically enrolled. Here’s how eligibility for the PSHB Part D benefit works:

• You must be enrolled in Medicare Part A and/or Part B to qualify for automatic enrollment into the PSHB-provided Part D EGWP.

• If you’re not enrolled in either Part A or Part B, you will not be automatically enrolled in the Part D benefit through PSHB, and you won’t receive prescription drug coverage from your plan.

• If you opt out of the EGWP, your PSHB plan cannot offer any other form of prescription drug coverage. That means no coverage at all for medications unless you separately enroll in a standalone Part D plan.

This makes it vital that you understand your enrollment status with Medicare and ensure that you’re not missing eligibility triggers.

What Happens If You Opt Out

You may receive an opt-out form from your plan provider. It might seem harmless—but if you sign and submit that form, here’s what happens:

• Your PSHB plan will not include Part D drug coverage.

• You will be left without any prescription drug benefit under your PSHB plan.

• You may not be able to re-enroll in the EGWP until the next enrollment period or without a qualifying life event.

And no, you can’t expect to fall back on a standard PSHB drug plan. That no longer exists for Medicare-eligible enrollees. The EGWP is the only prescription drug coverage PSHB offers you once you qualify for Medicare.

How the $2,000 Out-of-Pocket Cap Works

As of 2025, all Medicare Part D plans—including those embedded within PSHB—include a $2,000 cap on annual out-of-pocket drug costs. That means once your personal spending hits $2,000 in a calendar year:

• You enter the catastrophic coverage phase.

• Your PSHB-integrated plan covers 100% of approved drug costs for the rest of the year.

This feature significantly reduces the risk of runaway costs for medications, especially for those with chronic health needs. But you only benefit from this if you’re enrolled in the EGWP through PSHB.

What You Risk By Enrolling in a Separate Part D Plan

You may think you can improve your coverage by enrolling in a standalone Part D plan. But in the context of PSHB, that’s a mistake. If you enroll in an individual Medicare Part D plan:

• Your PSHB plan will automatically disenroll you from its own EGWP.

• You’ll lose any cost-sharing waivers, such as reduced deductibles or lower copayments, that your PSHB plan provides when paired with its own Part D.

• You may face coordination-of-benefits issues that lead to unexpected denials or delays at the pharmacy.

Even if a standalone Part D plan advertises broader networks or extras, the loss of PSHB-integrated benefits often outweighs those perks.

Enrollment Deadlines and Timelines You Shouldn’t Miss

For 2025, all Medicare-eligible Postal retirees and family members were subject to a special enrollment period for Medicare Part B (April 1 through September 30, 2024). This was your window to align with PSHB expectations.

Moving forward, your eligibility to participate in PSHB’s drug benefits is tied to:

• Your Medicare enrollment: If you become Medicare-eligible in 2025 or later, be sure to enroll in Part A and/or B promptly.

• The annual Open Season: Runs each year from November through December. During this time, you can:

  • Change PSHB plans.

  • Confirm continued enrollment in the EGWP.

  • Make any other plan elections.

Missing these periods—or ignoring EGWP opt-out forms—can delay your drug coverage or leave you without it entirely.

Coordination With Medicare Part B Matters

While Part B is not required to enroll in the PSHB’s EGWP, having it gives you access to:

• Lower medical copayments in your PSHB plan.

• Waived deductibles in some plans.

• More seamless coordination with prescription and medical claims.

Many PSHB plans also offer incentives such as premium reimbursements when you enroll in both Medicare Part B and the EGWP. Opting out of either may reduce your benefits.

Situations Where You May Be Exempt

Some enrollees may be exempt from automatic Part D enrollment under PSHB:

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

• You live permanently outside the United States.

• You are enrolled in VA or Indian Health Services and have alternate drug coverage.

If any of these apply, confirm your status with PSHB to avoid disruptions or miscommunication.

The Impact of Dropping the EGWP Mid-Year

Should you voluntarily disenroll from the EGWP mid-year, several consequences follow:

• Your PSHB plan will immediately stop covering your prescriptions.

• You may have to wait until the next Open Season to regain any form of drug coverage.

• You’ll lose eligibility for the $2,000 cap protection on drug costs.

In most cases, this choice results in higher out-of-pocket costs for you, plus disruption of ongoing treatments.

Mail-Order and Retail Access Under PSHB Part D

The good news: PSHB plans continue to offer wide access to retail and mail-order pharmacies through their integrated Part D coverage. Here’s what you typically get:

• Access to national pharmacy chains and local outlets.

• Mail-order options for maintenance medications, often with a 90-day supply and reduced copayments.

• Use of preferred pharmacy networks to reduce your cost-sharing.

These benefits only apply if you stay enrolled in the PSHB’s own EGWP.

Don’t Let Plan Overlap Confuse You

Some retirees still believe they can combine a private Medicare Advantage plan (Part C) with PSHB. This is not recommended. Doing so may result in:

• Conflicts between provider networks.

• Coverage coordination issues.

• Automatic disenrollment from PSHB-integrated prescription benefits.

It’s important to let PSHB stand on its own if you’re already enrolled. Stacking it with outside Medicare plans often leads to duplication of premiums and disruption of benefits.

Why Staying Enrolled in PSHB’s Part D Matters

In 2025, staying enrolled in your PSHB-provided EGWP plan offers:

• Automatic coordination with your medical and drug claims.

• Streamlined access to care and medications.

• Lower out-of-pocket costs with caps and copayment reductions.

You only unlock these benefits by remaining enrolled. Opting out—even by accident—can close the door to advantages you can’t easily get back.

PSHB Drug Coverage Only Works One Way

There’s no substitute for the EGWP built into PSHB. If you’re Medicare-eligible and you reject it, you’re rejecting drug coverage entirely under your PSHB plan. That’s not a temporary consequence—it may impact your healthcare access for the rest of the year.

If you’re unsure about your options, don’t guess. Confirm your Medicare enrollment, understand what EGWP means, and avoid signing forms you don’t fully understand.

Protect Your PSHB Benefits by Making the Right Choices

The integration of Medicare Part D into PSHB is a major improvement in 2025—but only if you handle it correctly. Always verify your Medicare status, understand the timelines, and carefully review any paperwork you receive about your drug coverage. If you have questions about whether to opt out, drop another plan, or coordinate benefits, speak with a licensed agent listed on this website who can help you make the most informed decision.