Key Takeaways

• Enrolling in a Medicare Advantage plan while covered under the Postal Service Health Benefits (PSHB) program can lead to termination of your PSHB coverage if you are not careful about coordination.

• To preserve your PSHB benefits and avoid conflicts, it is critical to understand how Medicare Advantage enrollment interacts with PSHB rules, especially regarding prescription drug coverage and Medicare Part B.

Understanding the Basics: PSHB and Medicare

The Postal Service Health Benefits (PSHB) program offers health coverage for Postal Service employees, retirees, and eligible family members. Starting in 2025, PSHB replaces FEHB for USPS enrollees. One of the key features of the PSHB program is its integration with Medicare for annuitants aged 65 and older.

Medicare is divided into four parts:

• Part A: Hospital insurance, typically premium-free if you have sufficient work history.

• Part B: Medical insurance, with a monthly premium.

• Part C: Also called Medicare Advantage, a private plan alternative that replaces Original Medicare.

• Part D: Prescription drug coverage, which PSHB integrates via an Employer Group Waiver Plan (EGWP).

Problems can arise when you enroll in Medicare Part C without understanding how it interacts with PSHB.

Why Medicare Advantage Enrollment Can Cause Issues

Medicare Advantage (Part C) plans are marketed as bundled alternatives to Original Medicare. They often include hospital, medical, and prescription drug coverage within one private plan. However, enrolling in a Medicare Advantage plan can conflict with your PSHB benefits for several reasons:

• Dual enrollment rules: Medicare only allows you to be enrolled in one Part D plan at a time. PSHB plans provide Part D through EGWP. If you join a Medicare Advantage plan that includes Part D, it automatically disenrolls you from your PSHB Part D coverage.

• Automatic disenrollment: Once you are enrolled in a Medicare Advantage plan with Part D, your PSHB prescription drug benefits are dropped. This may result in reduced pharmacy access, higher out-of-pocket costs, and the inability to re-enroll until the next Open Season.

• Potential loss of coordination benefits: Many PSHB plans offer lower deductibles, waived copays, or Part B premium reimbursement when you enroll in Original Medicare. These benefits do not apply if you replace Original Medicare with a Medicare Advantage plan.

What Happens If You Accidentally Enroll in Medicare Advantage

In 2025, PSHB coordination is tightly linked to Medicare enrollment. If you unintentionally enroll in a Medicare Advantage plan, you could experience the following:

• Termination of PSHB Part D drug coverage: Because your Medicare Advantage plan includes its own drug benefit, Medicare automatically drops you from the PSHB EGWP Part D.

• Ineligibility for certain PSHB enhancements: If your PSHB plan offers cost-sharing reductions for those enrolled in Medicare Part B, these may be forfeited if you’re enrolled in Medicare Advantage instead.

• Confusion over primary vs. secondary payers: PSHB is designed to coordinate with Original Medicare. With a Medicare Advantage plan, your private carrier becomes primary, and your PSHB plan may not coordinate benefits at all.

How to Avoid Coverage Disruption

To preserve your PSHB benefits while still getting Medicare coverage, consider the following steps:

1. Enroll in Original Medicare Only

Stick with Medicare Part A and Part B. This allows your PSHB plan to coordinate benefits properly. You’ll retain eligibility for enhanced PSHB benefits and continue receiving prescription drug coverage through your PSHB plan’s EGWP.

2. Avoid Medicare Advantage Plans with Part D

If you still want a Medicare Advantage plan, choose one without drug coverage (known as MA-only). However, this option is limited and may still disrupt other PSHB benefits.

3. Carefully Review PSHB Plan Documents

Each PSHB plan provides a detailed brochure explaining how it interacts with Medicare. Pay special attention to sections covering coordination of benefits, Medicare Part D integration, and Part B reimbursement.

4. Use the Medicare Open Enrollment Period Wisely

From October 15 to December 7 each year, you can switch Medicare plans. If you mistakenly enroll in a Medicare Advantage plan, you can return to Original Medicare and reinstate PSHB EGWP coverage for the following year. But until then, you may face coverage gaps.

5. Contact a Licensed Agent for Guidance

Before enrolling in any Medicare plan outside PSHB, speak with a licensed agent listed on this website. They can help assess whether a Medicare Advantage plan fits your needs or puts your PSHB benefits at risk.

Key Rules for 2025 PSHB Participants

Mandatory Medicare Part B Enrollment for Some Annuitants

In 2025, if you are a Medicare-eligible annuitant or family member and you:

• Retired after January 1, 2025 and

• Are not otherwise exempt

then you must enroll in Medicare Part B to stay in a PSHB plan. Enrolling in a Medicare Advantage plan with Part B does not meet this requirement unless the plan is integrated into your PSHB coverage, which most are not.

Prescription Drug Coverage Automatically Included

All Medicare-eligible annuitants in PSHB will be enrolled in an EGWP for Part D. This coverage cannot coexist with another Part D plan, including one embedded in a Medicare Advantage plan.

Losing PSHB Drug Coverage is Not Easily Reversible

If you are disenrolled from PSHB Part D coverage because of enrollment in a Medicare Advantage plan, you may not be able to get that coverage back until the next Open Season or unless you qualify for a Special Enrollment Period (SEP).

The Role of EGWP in PSHB Plans

Employer Group Waiver Plans (EGWP) are group-based Medicare Part D drug plans designed for retirees. PSHB plans automatically enroll Medicare-eligible annuitants in EGWP coverage. EGWP has advantages over individual Part D plans:

• Lower out-of-pocket drug costs

• $2,000 annual out-of-pocket cap for 2025

• Broader network of pharmacies

• Coordination with the rest of your PSHB benefits

These benefits are forfeited if you enroll in a Medicare Advantage plan with its own drug coverage.

Special Enrollment Period Rules and Recovery Options

If you mistakenly enroll in a Medicare Advantage plan and lose your PSHB drug coverage, you may be eligible for a Special Enrollment Period (SEP) to switch back, but the rules are strict:

• You typically have 2 months after leaving a Medicare Advantage plan to enroll in a new Part D plan.

• However, since PSHB drug coverage is group-based, re-enrollment is usually only possible during Open Season.

• Some PSHB plans may allow exceptions, but they are rare and require agency approval.

Avoid relying on SEPs unless absolutely necessary. Proactive planning is key.

Why Original Medicare Works Best with PSHB

Staying with Original Medicare (Parts A and B) ensures full access to PSHB coordination benefits, including:

• Continued drug coverage under EGWP

• Eligibility for plans offering reduced copays and deductibles

• Access to broader provider networks

• Simpler claim coordination between Medicare and your PSHB plan

If you switch to Medicare Advantage, most of these benefits are reduced or eliminated.

Timeline to Watch in 2025

• January 1: PSHB coverage begins for all USPS employees and retirees.

• October 15 to December 7: Medicare Open Enrollment. Critical window to make changes for 2026.

• Throughout the year: Qualifying Life Events (QLEs) or Special Enrollment Periods may apply if you lose or gain other coverage.

What You Can Do Right Now

• Check your Medicare status: Are you enrolled in Parts A and B only, or have you also signed up for a Medicare Advantage plan?

• Request your PSHB plan brochure: Look at how your plan coordinates with Medicare.

• Speak with a licensed agent: A knowledgeable professional can walk you through your choices.

• Review any recent mail from Medicare or OPM: Look for notices about coverage changes, coordination, or penalties.

Protect Your PSHB Coverage with Smart Medicare Decisions

Your PSHB coverage in 2025 comes with advantages, but it also requires careful decision-making once you’re Medicare-eligible. Enrolling in a Medicare Advantage plan without understanding the consequences can unintentionally drop critical coverage, especially prescription drugs.

You have better options. Choosing Original Medicare keeps your PSHB benefits intact, including access to enhanced features like reduced out-of-pocket costs and reliable drug coverage through EGWP.

If you’re uncertain or already enrolled in Medicare Advantage, it’s not too late to review your options. Speak with a licensed agent listed on this website to get personalized advice and avoid costly mistakes.