Key Takeaways

• Your window to coordinate Medicare and your PSHB coverage correctly often comes just once, especially if you’re already Medicare-eligible or approaching eligibility soon.

• Missing key deadlines or failing to understand how PSHB integrates with Medicare Part B and D could result in penalties, coverage gaps, or higher lifetime healthcare costs.

Why the Medicare-PSHB Decision Is So Critical

Starting in 2025, Postal Service Health Benefits (PSHB) have fully replaced FEHB for USPS employees and retirees. With this change, Medicare integration is no longer optional for many. If you’re eligible for Medicare, understanding how and when to enroll alongside PSHB can make or break the affordability and adequacy of your healthcare coverage.

Timing, plan choice, and Medicare coordination aren’t just checkboxes—they are decisions that carry long-term financial consequences. And unfortunately, many retirees are learning too late that certain opportunities to pair PSHB and Medicare Part B only come once.

The Enrollment Mandate You Can’t Ignore

If you’re a Medicare-eligible Postal retiree or annuitant, you may now be required to enroll in Medicare Part B to maintain your PSHB plan.

Who Must Enroll in Medicare Part B:

• Retirees who became eligible for Medicare after January 1, 2025

• Family members on your plan who are also Medicare-eligible

Who Is Exempt:

• Retirees who were already retired as of January 1, 2025 and are not enrolled in Medicare Part B

• Annuitants or family members who qualify for Medicare Part B exceptions, such as those with VA or Indian Health Service coverage or those living abroad

If you’re required to enroll and fail to do so, you may lose your PSHB coverage entirely. This makes your Medicare Part B enrollment decision not only urgent but essential.

Understanding the Timeline

The Medicare enrollment period doesn’t last forever—and it’s not always obvious when it applies to you. If you miss it, you may be locked out of coverage or subject to permanent financial penalties.

The Initial Enrollment Period (IEP):

This 7-month window includes:

• 3 months before the month you turn 65

• Your birth month

• 3 months after your birth month

Enroll during the first 3 months to ensure your Medicare coverage starts on the first day of your birth month.

The General Enrollment Period (GEP):

If you miss your IEP, you can only enroll during the General Enrollment Period from January 1 to March 31, but coverage won’t begin until July 1, and you may face late penalties.

Special Enrollment Period (SEP):

Some Postal retirees may qualify for a Special Enrollment Period if they are coming off active employment or other qualifying group coverage. But this is limited in scope.

Why You Can’t Skip Part B Anymore

Under FEHB, many retirees chose not to enroll in Medicare Part B because they felt their FEHB plan was enough. But PSHB changes this calculus.

If you’re required to enroll in Part B and don’t, your PSHB coverage will terminate. Even if you’re exempt, skipping Part B could still result in:

• Higher out-of-pocket costs for care not fully covered by PSHB alone

• No access to Medicare-coordinated benefits like waived deductibles or reduced coinsurance

• Late enrollment penalties if you change your mind later

The current standard monthly premium for Medicare Part B in 2025 is $185, with an annual deductible of $257. If you delay enrollment and later decide to sign up, you’ll pay 10% more for each 12-month period you were eligible but didn’t enroll—and this penalty applies for life.

Prescription Drug Coverage Under PSHB and Medicare Part D

In 2025, the structure of drug coverage has shifted dramatically. If you’re Medicare-eligible, your prescription benefits under PSHB come from a Medicare Part D Employer Group Waiver Plan (EGWP) tied to your PSHB plan.

What That Means:

• You do not need to sign up separately for Medicare Part D

• If you opt out of Medicare, you lose access to this prescription drug coverage

• Drug costs are now capped at $2,000 out-of-pocket annually under Medicare Part D changes

This integration offers significant financial protection—but only if you are enrolled in both PSHB and Medicare.

What Happens If You Decline Medicare and Want to Rejoin Later

If you are required to enroll and miss the deadline, you may lose your PSHB coverage permanently. For those who are exempt and decline Medicare Part B now, rejoining later involves hurdles:

• You’ll likely wait until the next General Enrollment Period (January–March), with coverage starting in July

• You’ll be hit with the lifetime late enrollment penalty

• You may miss out on EGWP-based drug coverage during the interim

In other words, the cost of waiting can be high—not just financially, but in terms of your access to care.

How Medicare Works With PSHB Benefits

If you’re enrolled in both PSHB and Medicare:

• Medicare becomes your primary payer

• PSHB becomes your secondary payer

• Many PSHB plans waive or reduce cost-sharing like deductibles, coinsurance, and copayments when Medicare is primary

This dual-layered structure can save you thousands annually, especially for frequent or high-cost medical services. But the coordination only works if you’re properly enrolled in both.

Spouses and Dependents Also Need to Plan Carefully

If your spouse or dependent is Medicare-eligible, the same rules apply. If they’re required to enroll and fail to do so, they could be removed from your PSHB plan entirely.

This makes it critical to:

• Track the age and Medicare eligibility of every person on your plan

• Review your PSHB plan’s integration with Medicare Part B and Part D

• Coordinate enrollment timelines to avoid penalties or coverage loss

What You Should Do During Open Season

Each year from November to December, you have the opportunity to review or change your PSHB plan.

Here’s what you should focus on:

• Does your current plan offer full benefits when paired with Medicare?

• Are cost-sharing reductions available if you have both PSHB and Medicare?

• Are your spouse or family members properly enrolled in Medicare, if required?

Use this time to ask questions, compare plan brochures, and get assistance if you’re unsure. The wrong assumption could cost you coverage—or significantly raise your healthcare expenses.

Planning Tips to Get It Right the First Time

• Don’t assume you’re exempt—double-check your retirement date and Medicare status

• Enroll early—don’t wait until the final months of your IEP or GEP

• Coordinate timelines—ensure your Medicare and PSHB start dates align

• Budget for both—PSHB premiums and Medicare Part B premiums are separate but both essential

• Use resources wisely—review plan brochures and speak with a licensed agent listed on this website

Don’t Gamble With Your Only Window

In 2025, the stakes are higher for pairing Medicare with your PSHB plan correctly. You don’t get unlimited chances. For most, this is a one-time coordination that will define your coverage and costs for the rest of your retirement.

Waiting, guessing, or misinterpreting your eligibility rules could lead to losing your PSHB coverage altogether or facing unnecessary Medicare penalties.

If you’re unsure where you fall, don’t wait. Speak with a licensed agent listed on this website to confirm your next steps. The peace of mind is worth it.