Key Takeaways:

1. Starting January 1, 2025, USPS employees and retirees will be covered by the new Postal Service Health Benefits (PSHB) program, replacing the FEHB program.
2. Medicare Part B will be mandatory for many postal retirees to maintain full PSHB coverage, with enrollment crucial to avoid gaps in healthcare.

Preparing for the PSHB and Medicare Part B Changes in Retirement

As a USPS employee nearing retirement, you’re likely concerned about how the new Postal Service Health Benefits (PSHB) program and Medicare Part B will affect your healthcare coverage. Starting January 1, 2025, the PSHB program will replace the Federal Employees Health Benefits (FEHB) plan, and with that, several changes are coming your way, particularly when it comes to coordinating with Medicare.

PSHB’s open season, from November 11, 2024, to December 9, 2024, will be an important time for retirees and employees to make decisions about their future healthcare coverage. Here’s everything you need to know to ensure a smooth transition into this new system.

What Is the PSHB Program?

The Postal Service Health Benefits (PSHB) program is a new healthcare system created as part of the Postal Service Reform Act of 2022. It is designed to provide health insurance specifically to USPS employees, retirees, and their family members. PSHB will take effect on January 1, 2025, and will replace FEHB for postal workers. This change applies to both current employees and those already retired.

If you’re currently enrolled in FEHB, you will automatically transition to a PSHB plan unless you choose to make changes during the open season. It’s essential to review the available plans and ensure they meet your healthcare needs, especially as Medicare enrollment comes into play.

Why Is Medicare Part B Important for Postal Retirees?

One of the most significant changes in 2025 is the integration of Medicare Part B with PSHB. Medicare Part B covers outpatient services, such as doctor visits and preventive care, which can be critical in retirement. For many postal retirees, Medicare Part B will be mandatory to ensure full coverage under PSHB.

Here’s why enrolling in Medicare Part B is important:

• Better coverage: Medicare Part B helps cover medical services that would otherwise require higher out-of-pocket expenses if you relied solely on PSHB. Without Part B, you may find yourself paying more for doctor visits, durable medical equipment, and other outpatient services.
• Mandatory enrollment: If you’re eligible for Medicare and don’t enroll in Part B, your PSHB coverage may be reduced. This means you could face significant out-of-pocket costs for services that would otherwise be covered by Medicare.

Who Needs to Enroll in Medicare Part B?

If you’re a USPS retiree or planning to retire after January 1, 2025, and are eligible for Medicare, you will need to enroll in Medicare Part B to receive full PSHB benefits. However, there are important exceptions:

• Retirees who are 64 or older by January 1, 2025, and are not already enrolled in Medicare Part B are not required to enroll. These individuals can keep their current coverage without enrolling.
• Family members of retirees who are not required to enroll in Part B will also be exempt from this mandate.

If you are nearing 65 or already eligible for Medicare, you should review your options and ensure you are enrolled in Part B to avoid penalties or gaps in coverage.

How to Navigate PSHB Open Season

The PSHB open season, from November 11 to December 9, 2024, is the time to evaluate your healthcare options. During this period, USPS employees and retirees can make changes to their health coverage for the upcoming year. It’s important to be prepared to make informed decisions.

Here are some key steps to take during open season:

• Review available PSHB plans: You’ll automatically be enrolled in a PSHB plan based on your current FEHB coverage, but this may not be the best option for your future healthcare needs. Review all available plans to find the one that suits your medical and financial situation best.
• Coordinate with Medicare Part B: If you’re approaching 65, enrolling in Medicare Part B during this period will ensure there are no gaps in your coverage. It’s also worth noting that a special enrollment period for Medicare Part B runs from April 1 to September 30, 2024, which allows USPS retirees to enroll in Part B without late enrollment penalties.
• Understand your costs: Medicare Part B comes with a monthly premium, which is income-based. Additionally, PSHB plans may have their own premiums, copays, and deductibles, so it’s crucial to budget accordingly for these costs.

What Happens if You Don’t Enroll in Medicare Part B?

For postal retirees required to enroll in Medicare Part B, failure to do so could lead to significant financial consequences. First, your PSHB coverage might not cover the full range of healthcare services, leaving you responsible for higher out-of-pocket costs. For example, if Medicare is supposed to cover certain services and you’re not enrolled, you could be left with the bill.

Moreover, there’s a penalty for not enrolling in Medicare Part B when you are first eligible. For each year you delay enrollment, your monthly premium increases by 10%, which can add up quickly over time.

Preparing for the PSHB Launch

With the PSHB program launching on January 1, 2025, it’s important to start preparing now. The upcoming open season will be your opportunity to review your healthcare options and make changes to ensure your coverage is adequate.

Here’s what you can do to prepare:

1. Mark your calendar for PSHB open season: Between November 11 and December 9, 2024, you’ll have the chance to review and select your PSHB plan.
2. Check your Medicare eligibility: If you’re nearing 65, now is the time to ensure that you’re ready to enroll in Medicare Part B. Remember, if you miss your initial enrollment period, you could face higher premiums and coverage gaps.
3. Evaluate your current healthcare needs: Think about the services you may require in the future, such as frequent doctor visits or treatments for ongoing health conditions. Use this information to choose the right PSHB plan for your situation.

Key Dates and Deadlines

• PSHB Open Season: November 11 to December 9, 2024. This is your opportunity to enroll or make changes to your PSHB coverage.
• PSHB Plan Effective Date: January 1, 2025. At this point, all USPS employees and retirees will transition from FEHB to PSHB.
• Medicare Part B Special Enrollment Period: April 1 to September 30, 2024. This period allows USPS retirees to enroll in Medicare Part B without facing late penalties.

What Should You Do Next?

As a USPS employee or retiree, the upcoming changes to your healthcare can seem overwhelming, but planning ahead will help ensure a smooth transition. Start by reviewing your options for PSHB coverage and ensuring that you’re enrolled in Medicare Part B if required. The open season from November 11 to December 9, 2024, is the key window to make changes and select a plan that works for you.

Take the time to assess your healthcare needs and budget for potential costs, including Medicare premiums and other out-of-pocket expenses. If you need additional guidance, speaking with a licensed insurance agent can help clarify your choices and ensure that you’re making the best decision for your health and financial future.