Key Takeaways

• In 2025, Medicare enrollment is now a required step for many Postal Service retirees and their eligible family members to maintain PSHB coverage.

• Failing to enroll in Medicare Part B could result in loss of PSHB benefits, particularly for Medicare-eligible individuals subject to the new rules.

Understanding the New Requirement in 2025

If you are a Postal Service employee or retiree, you may be familiar with the Federal Employees Health Benefits (FEHB) Program. But as of January 1, 2025, things have changed dramatically. The newly implemented Postal Service Health Benefits (PSHB) Program is now the primary system for health coverage, replacing FEHB for USPS workers and annuitants.

One of the most significant updates? Medicare Part B is no longer optional for many. Under the new structure, certain Medicare-eligible individuals are required to enroll in Part B to keep their PSHB coverage active. This marks a notable shift in federal health policy—and it’s important that you fully understand what it means for your benefits, costs, and access to care.

Who Is Required to Enroll in Medicare Part B?

Not everyone falls under the same mandate. The PSHB requirement to enroll in Medicare Part B applies to a specific group:

• Medicare-eligible annuitants and family members who retired after January 1, 2025 must be enrolled in Medicare Part B to maintain PSHB coverage.

• Employees who are 64 or older as of January 1, 2025 are exempt from this requirement.

• Annuitants who retired on or before January 1, 2025 are also exempt, even if they are Medicare-eligible.

• Individuals living overseas or receiving health benefits through the VA or Indian Health Services may be exempt under certain conditions.

It’s crucial to check your own eligibility status and retirement timeline, because these criteria determine whether or not Medicare enrollment is mandatory for you.

Why the Shift Toward Medicare?

The introduction of the PSHB Program came with a policy goal: coordinate better with Medicare and reduce long-term health care costs for the Postal Service. By requiring Medicare Part B enrollment, the system ensures that:

• Medicare acts as the primary payer, reducing the burden on PSHB plans.

• PSHB plans function as secondary coverage, helping fill gaps in Medicare (such as copayments and deductibles).

• Overall costs are shared, improving sustainability of the benefits program over time.

For you, this means a shift in how your medical bills are processed and who pays what. It also means you may need to manage more moving parts—especially if you’re approaching Medicare eligibility age or are newly retired.

Medicare and PSHB: How the Coverage Works Together

If you’re enrolled in both Medicare Part B and a PSHB plan, here’s how the coordination generally works in 2025:

• Medicare Part B pays first for covered outpatient services like doctor visits, diagnostic tests, and preventive care.

• Your PSHB plan pays second, covering some or all of your remaining costs depending on the plan design.

• You may experience reduced out-of-pocket costs, such as waived deductibles or lower copayments, when both coverages are in place.

This layered coverage can be a financial advantage, but only if you’re properly enrolled in both programs. If you miss your Medicare Part B enrollment window and fall into the mandatory group, you risk losing PSHB altogether.

Timing Matters: Enrollment Periods and Deadlines

The transition to PSHB in 2025 included key timeframes you need to be aware of:

• April 1 to September 30, 2024: A Special Enrollment Period (SEP) was offered for Medicare-eligible annuitants to enroll in Medicare Part B without late penalties.

• November to December 2024: Open Season allowed all USPS workers and retirees to choose a PSHB plan for 2025.

• January 1, 2025: PSHB officially replaced FEHB for Postal employees and annuitants.

If you’re just approaching age 65 in 2025, you’ll need to enroll in Medicare Part B during your Initial Enrollment Period—the seven-month window that spans three months before, the month of, and three months after your 65th birthday.

Missing this window could result in late penalties, delayed coverage, or even ineligibility for your PSHB plan if you’re in the mandated group.

Financial Impact of Medicare Enrollment

Understanding how costs work under the new PSHB-Medicare coordination model can help you plan better.

Medicare Part B Premium

In 2025, the standard monthly premium for Medicare Part B is $185, with higher-income individuals paying more based on IRMAA (Income-Related Monthly Adjustment Amount). This premium is paid directly to Medicare and is separate from your PSHB premiums.

PSHB Premiums and Cost-Sharing

Many PSHB plans offer:

• Lower deductibles if you’re also enrolled in Medicare

• Reduced copayments or coinsurance

• Automatic enrollment in a Medicare Part D EGWP (Employer Group Waiver Plan) for prescription drugs

Together, these benefits can help offset the cost of the Medicare Part B premium. Still, it’s important to factor both premiums into your monthly healthcare budget to avoid surprises.

What Happens If You Don’t Enroll?

If you are subject to the PSHB requirement and fail to enroll in Medicare Part B, here’s what you could face:

• Loss of PSHB coverage: You may not be allowed to remain enrolled in your health plan.

• No prescription drug coverage: If you lose PSHB coverage, you also lose the integrated Medicare Part D drug benefit.

• Re-enrollment restrictions: Opting out or disenrolling from Medicare Part B later may not guarantee you can rejoin PSHB.

• Lifetime late penalties: If you miss your enrollment window, your Medicare Part B premiums could be permanently higher.

Given these potential outcomes, it’s critical to meet all deadlines and confirm your enrollment.

Coordinating Benefits: PSHB, Medicare, and Prescription Drugs

Starting in 2025, Medicare-eligible PSHB enrollees are automatically enrolled in an Employer Group Waiver Plan (EGWP) under Medicare Part D. This provides:

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

• $35 monthly cap on insulin, aligning with federal requirements

• Expanded pharmacy networks

This prescription coverage is bundled with your PSHB plan. If you opt out of Medicare Part B or Part D, you may lose this drug coverage completely—and reinstatement is not guaranteed.

Special Considerations for Overseas Residents and Alternative Coverage

If you live abroad or receive benefits through the VA or Indian Health Services, you may be exempt from the Medicare requirement. But exemption is not automatic—you’ll need to document your status and possibly provide supporting evidence to your plan administrator or OPM.

Even if exempt, consider enrolling in Medicare Part B voluntarily if you return to the U.S. or anticipate needing stateside care, especially since penalties apply for late enrollment unless you qualify for a SEP.

Steps You Should Take Right Now

Here’s how to ensure you stay compliant with PSHB requirements in 2025 and beyond:

• Verify your retirement date: If you retired after January 1, 2025, and are Medicare-eligible, Part B enrollment is likely mandatory.

• Review your plan materials: Check for PSHB plan-specific rules about Medicare coordination, cost-sharing, and benefits.

• Track enrollment periods: Know when you’re eligible to enroll in Medicare and act within your required window.

• Budget for dual premiums: Understand how both Medicare and PSHB premiums fit into your financial plan.

• Keep documentation: If you believe you’re exempt, maintain paperwork that supports your case.

Making these proactive moves now will protect your access to care and avoid future disruptions.

Medicare Isn’t Optional Anymore for Many PSHB Enrollees

What once felt like a choice—whether to enroll in Medicare—has become a mandatory step for many Postal Service retirees and their family members in 2025. This shift isn’t just administrative; it impacts your monthly costs, access to prescription drugs, and your ability to stay enrolled in PSHB.

Take time to review your eligibility and act within the correct timelines. If you’re unsure whether you’re affected or what your best next step is, get in touch with a licensed agent listed on this website who can help guide you through the Medicare and PSHB coordination rules.