Key Takeaways

• Your Medicare and PSHB benefits only work well together if you take the correct steps in the right order, especially around age 65.

• Delaying Medicare Part B or not understanding how it integrates with PSHB can lead to higher costs, reduced drug coverage, or even loss of benefits.

Why the Order of Your Decisions Matters

If you’re covered by the Postal Service Health Benefits (PSHB) Program and approaching age 65, it’s critical to understand how Medicare fits into your overall health coverage. PSHB and Medicare can complement each other, but only if you make the right moves at the right time. The biggest mistake you can make is assuming it will all fall into place automatically.

The decisions you make about Medicare enrollment, especially Part B, directly impact how well your PSHB plan functions once you’re Medicare-eligible. Timing matters. Sequence matters. And if you get it wrong, you could find yourself paying more or getting less.

The Role of Medicare Part B in PSHB Coordination

Medicare Part B covers outpatient care, including doctor visits, preventive services, and durable medical equipment. Under PSHB rules for 2025, if you’re a Medicare-eligible Postal Service annuitant or a family member of one, enrolling in Medicare Part B is mandatory unless you meet one of the specific exceptions:

• You retired on or before January 1, 2025.

• You were age 64 or older as of January 1, 2025.

• You reside permanently overseas.

• You are eligible for health services through the VA or Indian Health Service.

If none of these exceptions apply to you, and you fail to enroll in Medicare Part B, your PSHB plan may deny claims or refuse to pay for services that would have been covered under Part B. This can lead to substantial out-of-pocket costs.

Special Enrollment Periods Have Strict Timelines

There was a Special Enrollment Period (SEP) for certain Postal Service annuitants and family members in 2024, running from April 1 to September 30. During this window, those who hadn’t previously enrolled in Medicare Part B were given a penalty-free opportunity to sign up.

That window has now closed. If you missed it, you may now have to wait until the General Enrollment Period (January 1 to March 31 annually), and coverage won’t begin until July 1 of that year. Additionally, you could face late enrollment penalties if you are not exempt.

How Prescription Drug Coverage Changes

Another area where sequence matters is drug coverage. PSHB plans integrate with Medicare Part D through what’s called an Employer Group Waiver Plan (EGWP). If you’re enrolled in Medicare and PSHB, your drug benefits are automatically upgraded. This provides:

• A $35 monthly cap on insulin

• An annual $2,000 out-of-pocket maximum on prescription drugs

• A broader pharmacy network

However, if you decline this EGWP coverage or delay enrolling in Medicare, you may:

• Lose access to these enhanced drug benefits

• Be unable to re-enroll in drug coverage later, except under limited circumstances

That’s why doing things in the right order is so important: Medicare Part B enrollment unlocks additional benefits in your PSHB plan.

What Happens If You Delay Medicare?

Some retirees believe they can delay Medicare enrollment and just rely on PSHB coverage. In many cases, that’s no longer true.

If you’re subject to the mandatory Medicare requirement and fail to enroll in Part B:

• Your PSHB plan can reduce or deny benefits for services that Medicare Part B would have paid for.

• You’ll be fully responsible for those costs.

• You may face a lifetime penalty if you enroll in Part B later.

The penalty for late enrollment in Part B is 10% for each 12-month period you were eligible but didn’t sign up, and it applies for as long as you have Medicare. The financial consequences can be steep.

Medicare and PSHB Work Best Together

When you’re properly enrolled in both Medicare and PSHB:

• PSHB becomes your secondary payer, covering what Medicare Part B doesn’t (like copays and coinsurance).

• You often pay little to no out-of-pocket for many covered services.

• You gain access to better prescription benefits and potentially waived deductibles, depending on the PSHB plan you select.

This synergy only happens if you enroll in Medicare Part A and Part B on time. Skipping either disrupts the coordination of benefits and puts your financial protection at risk.

Know Your Medicare Enrollment Window

Most people become eligible for Medicare at age 65. Your Initial Enrollment Period (IEP) is a seven-month window:

• Begins 3 months before the month you turn 65

• Includes your birth month

• Ends 3 months after your birth month

Failing to enroll during this time can mean penalties and coverage gaps unless you qualify for a Special Enrollment Period.

If you’re a current Postal Service employee working past age 65, you may defer Medicare Part B without penalty while still employed. But once you retire, you’ll need to enroll promptly to maintain full PSHB benefits.

The Impact on Family Members

Medicare requirements for PSHB aren’t just about you. They also affect your covered dependents.

If your spouse or other family members are Medicare-eligible and don’t enroll in Part B when required, it can compromise the entire family’s access to full PSHB benefits. Coordination of benefits works only when all Medicare-eligible members are properly enrolled.

That’s why it’s important to:

• Review eligibility for each covered person

• Ensure everyone meets the enrollment timeline

• Contact a licensed agent if there’s uncertainty about any family member’s situation

You Can Still Compare Plans During Open Season

Each year from November through December, PSHB participants have the opportunity to review and change their plan selection. This Open Season is your chance to:

• Evaluate plan benefits with and without Medicare

• Choose a plan that offers better coordination with Medicare

• Understand how costs shift depending on your enrollment status

If you’ve recently turned 65 or plan to do so in the coming year, Open Season is the ideal time to make sure your PSHB plan aligns with your Medicare enrollment.

Watch for Notifications and Keep Documentation

OPM and your PSHB provider will send you letters when you’re approaching Medicare eligibility. Don’t ignore these notices. They contain:

• Instructions for how to enroll in Medicare

• Deadlines you must meet to avoid penalties

• Explanations of how your current plan will change

It’s smart to keep:

• A copy of your Medicare card

• Enrollment confirmation letters

• Documentation of any exceptions you qualify for

This paperwork will be important if there’s ever a dispute about your coverage.

Making the Right Moves Before and After 65

To ensure everything works smoothly, follow these steps:

1. Check your Medicare eligibility at least 6 months before turning 65.

2. Enroll in both Part A and Part B during your Initial Enrollment Period unless you qualify for a deferral.

3. Notify your PSHB plan of your Medicare enrollment so benefits can coordinate.

4. Review your drug coverage and don’t opt out of the EGWP unless you’re absolutely sure.

5. Evaluate PSHB plan choices during Open Season with Medicare coordination in mind.

Doing these in the correct order helps ensure you avoid penalties, reduce costs, and get the full benefit of both Medicare and PSHB.

When in Doubt, Ask a Licensed Agent

PSHB and Medicare are complex enough on their own. When combined, the details can get overwhelming. If you’re unsure about your Medicare timeline, eligibility, or how it affects your PSHB plan, speak to a professional.

Agents who specialize in Postal Service benefits can:

• Review your situation and timeline

• Explain how plan costs and benefits will change

• Guide you through Medicare enrollment

• Help you avoid costly mistakes

Make Smart Medicare Moves to Get the Most Out of PSHB

Medicare doesn’t automatically work in perfect harmony with your PSHB plan. It’s your actions that make the difference. Enroll on time, coordinate your benefits properly, and ensure your dependents do the same. By taking the right steps early, you protect your health and your wallet.

If you need personalized help, get in touch with a licensed agent listed on this website. They can walk you through each part of the process and ensure your benefits are aligned.