Key Takeaways

• Having both Medicare and Postal Service Health Benefits (PSHB) can significantly reduce your out-of-pocket medical costs—but only if you time your enrollment correctly.

• Your Medicare Part B enrollment must align with PSHB rules, especially for annuitants and certain family members, or you could lose essential coverage.

Why Medicare Enrollment Isn’t Just a Box to Check

If you’re a Postal Service retiree or approaching retirement, you may assume your PSHB coverage alone is enough. But in 2025, that assumption can be costly. Medicare enrollment isn’t optional for many postal annuitants and eligible family members. It’s a condition for keeping your PSHB coverage once you qualify for Medicare.

This rule applies specifically to Medicare Part B. If you’re required and fail to enroll, your PSHB plan may no longer pay for your medical services, leaving you with far more out-of-pocket costs than expected. It’s not just about enrolling in Medicare—it’s about enrolling at the right time.

Understanding How PSHB and Medicare Work Together

When you’re enrolled in both Medicare and PSHB, your benefits coordinate to provide layered coverage. Here’s what that typically means:

• Medicare is your primary coverage.

• PSHB acts as your secondary payer.

This coordination can result in substantial savings. Medicare pays first, and PSHB covers most or all of the leftover costs—depending on the plan you choose.

That said, coordination only happens smoothly when Medicare enrollment is done properly. Delays or missteps can cause gaps in coverage or denial of claims.

The Mandatory Medicare Part B Requirement

Beginning in 2025, the rules are very clear: Certain Medicare-eligible Postal Service annuitants and family members must enroll in Medicare Part B to maintain PSHB coverage.

You fall under this requirement if:

• You are a USPS annuitant eligible for Medicare Part A.

• You have a covered family member who is eligible for Medicare Part A.

If you or your dependent is required to enroll in Medicare Part B and don’t do so, PSHB won’t cover the majority of your medical services. While you’ll keep your prescription drug benefits, your medical coverage will be drastically reduced.

Who Is Exempt from the Requirement

You may be exempt from the Medicare Part B enrollment rule if any of the following apply:

• You retired on or before January 1, 2025 and are not already enrolled in Medicare Part B.

• You are an active employee and not yet retired.

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

• You live permanently outside the United States.

• You qualify for VA or Indian Health Services benefits.

If you meet one of these conditions, Medicare Part B is not required to keep your PSHB coverage—but it may still be beneficial to enroll.

The Importance of Timely Medicare Enrollment

The moment you become eligible for Medicare is when the clock starts. Your Initial Enrollment Period (IEP) for Medicare lasts seven months:

• 3 months before the month you turn 65

• The month of your 65th birthday

• 3 months after your 65th birthday

Enrolling early within that window ensures your Medicare coverage begins as soon as you’re eligible, typically on the first day of your birthday month.

Failing to enroll during this period can mean:

• Delays in coverage

• Gaps in PSHB coordination

• Late enrollment penalties (for Medicare Part B)

If you missed your IEP, you must wait until the General Enrollment Period (January 1 to March 31) to enroll in Medicare Part B. But this delays your coverage start until July 1, leaving you vulnerable for months.

Why Medicare Part B Costs Are Worth It Under PSHB

Many retirees question whether the monthly Part B premium is worth it. But under PSHB in 2025, the benefits often outweigh the costs:

• Lower out-of-pocket medical expenses

• Reduced coinsurance and deductibles

• Broader access to care providers who accept Medicare

• Prescription drug savings through integrated Medicare Part D coverage

Some PSHB plans even offer incentives like reimbursement for part of your Part B premium or waived deductibles—if you’re enrolled in both.

Prescription Drug Coverage Through PSHB and Medicare

If you’re enrolled in Medicare and a PSHB plan, you automatically receive prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). This means:

• No need to enroll in a separate Part D plan

• Your prescription costs are typically lower than standard Part D plans

• A $2,000 annual out-of-pocket cap now applies in 2025

Failing to enroll in Medicare when required means losing access to this valuable integrated drug coverage.

The Role of Special Enrollment Periods (SEPs)

If you missed your IEP and qualify for an exception, you may be eligible for a Special Enrollment Period (SEP). One such SEP was held from April 1 through September 30, 2024 to help PSHB enrollees get on track before the program went live in 2025.

But in 2025, SEPs are limited to specific life changes, including:

• Loss of employer coverage

• Moving outside your plan’s service area

• Qualifying for Medicaid or Extra Help

You can’t assume another SEP will be available—so enroll on time.

What Changes Once You’re Fully Enrolled in Both

Once you’re officially enrolled in both Medicare and PSHB, several changes happen automatically:

• PSHB becomes secondary. Medicare now pays first for most services.

• Lower medical costs. You typically owe less for copays, deductibles, and coinsurance.

• Better coordination of benefits. Fewer denied claims due to clearer primary/secondary coverage roles.

• Prescription savings. You are automatically covered under Medicare Part D via your PSHB plan.

But remember: none of these benefits are guaranteed if you fail to enroll in Medicare properly or on time.

Medicare Coordination Doesn’t Mean Double Coverage

Some mistakenly believe having both plans means getting paid back or getting extra coverage. In reality, coordination means Medicare pays first, and PSHB fills in the remaining balance—within plan limits.

That’s why understanding plan details, including:

• Your out-of-pocket maximums

• Coinsurance rates

• Network restrictions

is just as important. You don’t get double the coverage, but you do often get better financial protection.

Why Timing Also Affects Your Dependents

If your spouse or other dependent is covered under your PSHB plan and is also Medicare-eligible, they too may be required to enroll in Medicare Part B. If they don’t, their PSHB coverage may be limited—just like yours.

That’s why it’s critical to:

• Review all covered family members

• Confirm each person’s Medicare eligibility and enrollment requirements

• Make coordinated decisions to avoid coverage disruptions

What to Do Now If You’re Approaching Age 65

If you’re getting close to Medicare eligibility, here’s a short checklist to help keep your coverage intact:

• Mark your Initial Enrollment Period window

• Apply for Medicare Parts A and B in the 3 months before your 65th birthday

• Review your current PSHB plan’s coordination rules

• Verify whether you (or your dependents) are required to enroll in Part B

• Avoid late penalties by enrolling on time

And most importantly, don’t wait until the last month of your IEP to act. Delays in processing can result in gaps in coverage.

How PSHB and Medicare Work Across State Lines

One benefit of having both Medicare and PSHB is flexibility. If you move to another state, Medicare’s nationwide network of providers continues to cover you. PSHB plans may have national or regional networks—so it’s important to verify if your plan requires referrals or network usage.

If you live abroad, note that:

• Medicare generally doesn’t cover services outside the U.S.

• PSHB coverage may be limited internationally

• You may be exempt from the Part B requirement if permanently overseas

Why You Shouldn’t Skip the Annual PSHB Open Season

Even after you’re enrolled in Medicare, PSHB Open Season (held each November through December) matters. That’s your opportunity to:

• Reevaluate your plan choices

• Compare deductibles, premiums, and benefit coordination

• Update covered dependents

Your needs may change from year to year—especially if your healthcare usage increases.

Getting the Coordination Right Matters for Long-Term Costs

Properly aligning your Medicare enrollment with PSHB isn’t just an administrative task—it’s a financial strategy. Poor timing can:

• Lead to higher out-of-pocket expenses

• Cause loss of essential coverage

• Result in permanent late penalties

In contrast, getting the timing right ensures:

• Smooth benefit coordination

• Maximum savings on medical and prescription costs

• Continued protection for you and your family

Make the Right Move While You Still Have Time

If you’re nearing Medicare eligibility or managing a dependent who is, now is the time to get your timeline right. Review your PSHB plan details. Mark your enrollment calendar. Avoid missteps.

And if you’re unsure, reach out to a licensed agent listed on this website. They can walk you through timelines, requirements, and options to ensure you don’t fall through the cracks.