Key Takeaways

• If you’re a Postal Service retiree or annuitant eligible for Medicare, skipping Medicare Part B in 2025 can lead to permanent late enrollment penalties that increase the longer you delay.

• Enrolling in Part B when first eligible helps you avoid penalties and ensures full access to PSHB plan benefits integrated with Medicare.

Why This Matters Now More Than Ever

In 2025, the Postal Service Health Benefits (PSHB) Program officially replaces your former FEHB coverage. As a USPS retiree or worker nearing retirement, your decisions regarding Medicare enrollment have lasting consequences. The most crucial among them: whether to enroll in Medicare Part B when you first become eligible.

Starting this year, Medicare-eligible Postal Service annuitants and their covered family members must be enrolled in Part B to maintain full PSHB coverage—unless they qualify for one of the few exemptions. Skipping Part B could not only compromise your access to care but saddle you with lifelong financial penalties.

What Is Medicare Part B?

Medicare Part B covers outpatient care, doctor visits, preventive services, and medical supplies. Unlike Part A, which many people receive premium-free, Part B comes with a monthly premium. In 2025, the standard premium is $185. If you don’t enroll during your Initial Enrollment Period (IEP), you’ll pay more later—permanently.

Understanding the Initial Enrollment Period (IEP)

Your IEP is your first chance to enroll in Medicare. It begins three months before the month you turn 65, includes your birth month, and continues for three months after. For many Postal retirees, this period aligns closely with their retirement timeline.

Missing this window has consequences. If you’re not actively working for the Postal Service and not covered by an employer-sponsored group plan, delaying enrollment means you’ll need to wait for the General Enrollment Period (GEP)—and face penalties.

General Enrollment Period (GEP): A Costly Second Chance

The GEP runs from January 1 to March 31 each year. Coverage begins the month after you enroll. But here’s the catch: if you missed your IEP and aren’t exempt, your Part B premiums will be permanently higher.

• Late Enrollment Penalty: 10% increase in monthly premiums for every 12-month period you delayed.

• Penalty Duration: For life. There is no cap or forgiveness.

For example, delaying enrollment for two full years would result in a 20% higher monthly premium—for the rest of your life.

How This Impacts Your PSHB Coverage

In 2025, the PSHB Program fully integrates with Medicare. If you’re eligible for Medicare and not enrolled in Part B, you may not receive the full benefits of your PSHB plan. In some cases, your coverage may be suspended or limited.

The Office of Personnel Management (OPM) outlines this clearly: certain PSHB benefits, including reduced deductibles and coinsurance, only apply if you’re enrolled in both Medicare Parts A and B.

Who Is Required to Enroll?

If you fall into one of the following categories, you are generally required to enroll in Medicare Part B:

• You are a Postal Service annuitant (retiree) who is Medicare-eligible.

• You are a family member covered under a PSHB plan and also eligible for Medicare.

Who Is Exempt?

You may qualify for an exemption if:

• You retired on or before January 1, 2025.

• You are an active USPS employee aged 64 or older as of January 1, 2025.

• You live overseas.

• You are enrolled in VA or Indian Health Services programs.

If you are unsure about your exemption status, it’s important to consult a licensed agent listed on this website.

PSHB and Medicare: Designed to Work Together

PSHB plans are designed to complement Medicare. When you enroll in both Part A and Part B:

• Your PSHB plan often waives or reduces deductibles.

• You may pay lower copayments and coinsurance.

• You’ll benefit from coordinated coverage and expanded provider access.

Skipping Part B may mean higher out-of-pocket costs and denied claims for services Medicare would otherwise cover.

The Financial Burden of Waiting

The penalty for late enrollment is not a one-time fee. It accrues every year you wait and never goes away. Additionally, if you’re forced to enroll later during the GEP, you may experience a gap in coverage.

Cost Breakdown (2025 Figures)

• Standard Monthly Premium: $185

• Penalty for One-Year Delay: +$18.50/month (10%)

• Penalty for Three-Year Delay: +$55.50/month (30%)

These costs add up. Over a 20-year retirement, a 30% penalty could result in thousands of dollars in unnecessary premiums.

The Value of Early Enrollment

Making the choice to enroll during your IEP means:

• No late penalties

• Immediate access to full PSHB benefits

• Fewer billing issues between providers and your plan

• Streamlined claims process

Delaying enrollment disrupts this harmony. PSHB and Medicare work best together—by design.

If You Already Delayed: What You Can Do

If you’ve missed your IEP and are not exempt, you should act immediately. Enroll during the next General Enrollment Period to stop the penalties from growing. While you can’t undo the past, enrolling as soon as possible limits further increases.

In addition, review your PSHB plan to see how non-enrollment in Part B affects your coverage. Some plans may reduce benefits or shift costs to you.

The Role of the PSHB Part D Prescription Benefit

All Medicare-eligible annuitants and family members will automatically receive drug coverage under a Medicare Part D Employer Group Waiver Plan (EGWP) integrated with your PSHB plan. But full access to these benefits also requires Part B enrollment. Opting out of Part B could disrupt your prescription drug coverage.

• Insulin cost cap: $35/month under Part D (if enrolled)

• $2,000 annual out-of-pocket limit: A key benefit starting in 2025

What About TRICARE or Other Federal Programs?

PSHB enrollment rules are specific to Postal Service employees and retirees. TRICARE and other federal programs operate separately. Being enrolled in TRICARE or a VA program may exempt you from the Part B requirement, but these cases are rare and must be verified.

Always confirm your specific situation before assuming an exemption applies.

Get Help Before You Make a Costly Decision

You don’t have to figure this out alone. If you’re approaching age 65 or already eligible for Medicare, now is the time to make an informed decision. The penalties for waiting are steep—and permanent. Reach out to a licensed agent listed on this website to understand your options, review your exemption status, and protect your retirement budget.

Your Medicare Decision Affects Everything

When it comes to PSHB and Medicare, timing isn’t just important—it’s everything. The cost of delaying Medicare Part B reaches far beyond your monthly budget. It touches your entire access to care, coverage quality, and financial well-being in retirement.

Avoid permanent penalties. Secure full PSHB benefits. Connect with a licensed agent today and make your choice with clarity and confidence.