Key Takeaways

• If you’re a Medicare-eligible Postal Service retiree, delaying enrollment in Medicare Part B could lead to higher healthcare costs and a loss of key PSHB benefits.

• Enrolling on time ensures that your PSHB plan coordinates smoothly with Medicare, offering reduced deductibles, waived copayments, and lower prescription drug costs.

Why Medicare Part B Matters for PSHB Enrollees

In 2025, Medicare Part B plays a central role in determining whether you receive full benefits under your Postal Service Health Benefits (PSHB) plan. For Medicare-eligible annuitants and their covered family members, failing to enroll in Part B on time can result in more than just a financial penalty—it can reduce or entirely eliminate important PSHB benefits.

Your PSHB plan is designed to integrate with Medicare. When Medicare is your primary payer, your PSHB plan becomes secondary, covering what Medicare does not. But if you skip Medicare Part B, you risk being treated as having incomplete coverage, which could mean higher out-of-pocket costs and limited access to care.

When Enrollment Becomes Mandatory

Starting January 1, 2025, most Medicare-eligible Postal Service annuitants and family members must be enrolled in Medicare Part B to remain fully covered under a PSHB plan. This rule applies specifically to:

• Annuitants who are age 65 or older and eligible for Medicare Part A and B

• Covered family members who are also Medicare-eligible

There are key exceptions:

• If you retired on or before January 1, 2025, and are not enrolled in Medicare Part B, you are not required to sign up, although it is still strongly recommended.

• If you are a current USPS employee and were age 64 or older as of January 1, 2025, you are also exempt.

• Medicare-eligible enrollees who live abroad or are covered by the Veterans Administration (VA) or Indian Health Service (IHS) are not required to enroll.

What Happens If You Delay Part B

Delaying Medicare Part B enrollment after you’re eligible can create a ripple effect on your health coverage:

• Late Enrollment Penalty: You may face a permanent monthly penalty added to your Part B premium. This penalty increases by 10% for every 12-month period you delay enrollment after becoming eligible.

• Loss of Secondary Coverage: PSHB plans may limit benefits or cost-sharing if you’re not enrolled in Part B. In some cases, the plan might process claims as if you had Part B, meaning you pay more.

• Prescription Drug Coverage Impact: PSHB prescription benefits for Medicare-eligible members are delivered through a Medicare Part D plan (specifically an Employer Group Waiver Plan). Skipping Part B may affect how this integrates with your overall coverage.

The Medicare Enrollment Timeline That Matters

To receive full PSHB benefits, timing your Medicare enrollment is crucial. Here’s how the timeline works:

• Initial Enrollment Period (IEP): This is a 7-month window surrounding your 65th birthday—3 months before, the month of, and 3 months after.

• Special Enrollment Period (SEP): If you’re still working and covered under an employer health plan (like PSHB as an active USPS employee), you can delay Part B without penalty. You have 8 months to enroll after employment or coverage ends.

• General Enrollment Period (GEP): If you miss IEP and SEP, you can enroll between January 1 and March 31 annually. Coverage starts July 1—and penalties apply.

For PSHB purposes, it’s ideal to enroll during your IEP or SEP to avoid coverage disruptions and penalties.

What PSHB Offers When You Have Medicare Part B

When you’re enrolled in both PSHB and Medicare Part B, you benefit from how these programs work together:

• Lower Deductibles and Coinsurance: Many PSHB plans waive their deductible when Medicare pays first.

• Reduced Copayments: Out-of-pocket costs for doctor visits, specialist consultations, and outpatient services can drop significantly.

• Better Coordination for Hospital Care: Medicare covers the bulk of inpatient costs. PSHB picks up what’s left.

• Prescription Drug Protection: Your plan includes Medicare Part D coverage with added features like a $2,000 cap on out-of-pocket costs and a wider pharmacy network.

What You May Lose Without Medicare Part B

If you’re Medicare-eligible but don’t enroll in Part B, your PSHB coverage will not coordinate as designed. Here’s what you risk losing:

• Full Cost-Sharing Benefits: The PSHB plan may process claims as if Medicare had paid first—even if you don’t have Part B. You pay the full cost instead.

• Access to Certain Providers: Some PSHB providers may refuse to treat you unless you have both Medicare and PSHB.

• Eligibility for Special Benefits: Some PSHB plans offer additional benefits—such as premium rebates, enhanced case management, or waived cost-sharing—for those who enroll in Part B. You miss out on these perks.

How Medicare and PSHB Coordinate Payments

When you have both Medicare and PSHB, the order of payment is clear:

1. Medicare pays first for services covered under Part A and Part B.

2. PSHB pays second, covering your remaining costs, including copayments, coinsurance, and deductibles.

This two-layer approach gives you broader protection and more predictable costs. But without Part B, PSHB becomes the sole payer, and your financial responsibility grows.

Common Misunderstandings About Medicare and PSHB

Several misconceptions can lead to costly mistakes:

• “I Don’t Need Part B if I Have PSHB”: False. Starting in 2025, Part B is required for full benefits unless you meet an exemption.

• “Part B Isn’t Worth the Premium”: Not true. While you do pay a monthly premium for Part B, the savings from lower copayments, waived deductibles, and capped drug costs often exceed the premium.

• “I Can Enroll Later Without Consequences”: Delaying Part B usually leads to penalties and coverage disruptions.

How to Confirm Your Part B Enrollment Status

To ensure you’re ready for 2025 PSHB changes:

• Contact the Social Security Administration to verify your enrollment in Medicare Part B.

• Check your PSHB plan documentation for how they coordinate with Medicare.

• Review your Medicare card. If it lists both Part A and Part B, you’re covered.

• If you’re not enrolled, act immediately—especially if you’re outside your IEP or SEP. You may need to wait for the next General Enrollment Period.

What to Expect if You Miss the Deadline

Missing the enrollment window for Medicare Part B can mean:

• No full PSHB benefits starting January 2025

• Late enrollment penalties added to your monthly Part B premium—for life

• Limited provider access and higher out-of-pocket expenses

Once the deadline passes, your options are reduced and costly. It’s critical to act before you lose eligibility for key benefits.

Your Next Move Matters

Understanding how Medicare Part B enrollment affects your PSHB benefits is essential in 2025. While the requirement may feel new or even unnecessary, it reflects how deeply Medicare and PSHB are now linked. The longer you wait to enroll, the more you risk in the form of penalties, gaps in coverage, and higher costs.

If you’re unsure about your status or need help enrolling, don’t wait. Reach out today to speak with a licensed agent listed on this website for personalized assistance.