Key Takeaways

• If you’re eligible for Medicare and enrolled in a Postal Service Health Benefits (PSHB) plan in 2025, Medicare Part B enrollment is required in most cases.

• Failing to enroll in Medicare Part B could mean you lose your PSHB coverage entirely or face higher out-of-pocket costs.

What You Need to Know About Medicare Part B and PSHB

The transition from the Federal Employees Health Benefits (FEHB) Program to the new Postal Service Health Benefits (PSHB) Program marks a significant change for postal retirees and workers. One of the most critical changes is the Medicare Part B enrollment requirement. If you are Medicare-eligible and want to maintain full PSHB coverage in 2025 and beyond, enrolling in Part B is not just a recommendation—it’s often mandatory.

Understanding how Medicare Part B integrates with your PSHB plan is essential to avoid unexpected coverage issues or increased costs.

Who Must Enroll in Medicare Part B

As of January 1, 2025, many Postal Service annuitants and eligible family members must be enrolled in Medicare Part B to maintain their PSHB coverage. This requirement applies to:

• Annuitants who retired after January 1, 2025, and are eligible for Medicare.

• Medicare-eligible family members of annuitants.

• Employees aged 64 or older as of January 1, 2025, who retire and become Medicare eligible.

Who Is Exempt

Some individuals are exempt from the Part B requirement:

• Those who retired on or before January 1, 2025, and are not enrolled in Part B.

• Individuals living overseas where Medicare is not available.

• Those receiving coverage through the VA or Indian Health Services.

You should confirm your status to determine whether the requirement applies to you. The consequences of skipping Part B can be severe.

Why Part B Enrollment Matters

Medicare Part B covers outpatient services, including:

• Doctor visits

• Preventive care

• Durable medical equipment

• Lab services

In the PSHB structure, Medicare becomes your primary payer when you’re enrolled in both Medicare and PSHB. This means Medicare pays first, and your PSHB plan picks up the rest.

Without Medicare Part B, your PSHB plan will shift to become your primary payer. But here’s the catch: it won’t pay the portion that Medicare would have covered. That gap becomes your responsibility.

This leads to higher costs and possibly reduced benefits. Worse, in some cases, failure to enroll in Part B may result in termination of PSHB coverage.

The Timeline You Need to Follow

Timing is everything when it comes to Medicare Part B and PSHB.

• Initial Enrollment Period (IEP): This 7-month window starts 3 months before the month you turn 65, includes your birthday month, and ends 3 months afterward.

• General Enrollment Period (GEP): If you missed your IEP, the GEP runs from January 1 to March 31 each year, with coverage starting July 1. Late penalties may apply.

• Special Enrollment Period (SEP): For those transitioning from employment to retirement, you may qualify for an SEP, allowing penalty-free enrollment in Part B for up to 8 months after your job-based coverage ends.

If you’re already 65 or older and still working, your window depends on your retirement date. It’s critical to plan well in advance.

Penalties for Delayed Enrollment

The late enrollment penalty for Medicare Part B is permanent and adds 10% to your premium for every 12-month period you delay enrollment after becoming eligible.

Example: If you delay for 2 full years, you could pay 20% more on your monthly premium for life. This can add up significantly in retirement.

For postal retirees, the stakes are higher. Not only do you face higher monthly costs, but your PSHB plan may not cover what Medicare would have, meaning more money out-of-pocket.

What Happens to Your PSHB Plan Without Part B

If you are required to enroll in Medicare Part B and fail to do so, here’s what could happen:

• Coverage Termination: Some PSHB plans will drop your coverage altogether if you fail to enroll in Part B.

• Higher Out-of-Pocket Costs: Others will continue to cover you but reduce benefits significantly, making you pay what Medicare would have covered.

• Loss of Drug Coverage: Because PSHB includes integrated Medicare Part D coverage through an Employer Group Waiver Plan (EGWP), failing to enroll in Part B may also disqualify you from this benefit.

How PSHB Coordinates With Medicare

Once you have both Medicare Part A and B, your PSHB plan works as a secondary payer. This dual-layered structure provides robust coverage:

• Medicare pays its approved amount.

• PSHB pays most or all of the remaining costs.

This setup minimizes your out-of-pocket expenses. It also streamlines claims and billing, with most providers accepting Medicare.

Some PSHB plans even offer Part B premium reimbursement, waived deductibles, or enhanced benefits for those enrolled in Medicare.

What If You Already Have Medicare Part B?

If you already have Part B and you’re transitioning to a PSHB plan, you’re in a strong position. Your coverage will be more comprehensive, and you’ll avoid penalties or benefit reductions.

But even in this case, it’s important to:

• Verify that your PSHB plan is properly coordinating with Medicare.

• Understand your plan’s benefits when Medicare is your primary insurer.

• Reassess your plan during Open Season to ensure it still meets your needs.

The Medicare Part D Connection

Your PSHB plan in 2025 automatically includes prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP) for Medicare enrollees.

You cannot opt out of this drug plan without losing drug coverage from your PSHB plan. And you generally cannot enroll in a separate standalone Part D plan while keeping PSHB coverage.

The EGWP offers benefits such as:

• A $2,000 out-of-pocket cap for prescriptions in 2025.

• A $35 monthly cap on insulin.

• Broader pharmacy networks.

But again, you must be enrolled in both Medicare Part A and Part B to access these.

Planning Ahead Is Non-Negotiable

With all the moving parts—PSHB rules, Medicare requirements, enrollment timelines, and penalties—you need to start planning long before your retirement date or 65th birthday.

Checklist to prepare:

• Confirm your Medicare eligibility and enrollment timeline.

• Verify if you’re required to enroll in Part B for your PSHB plan.

• Enroll during the appropriate period to avoid penalties.

• Review PSHB plan brochures for coordination of benefits.

• Contact a licensed insurance agent listed on this website for one-on-one help.

Missing any part of the puzzle could result in coverage gaps, higher costs, or even a loss of insurance.

Don’t Wait Until It’s Too Late to Understand Your Coverage

The PSHB requirement for Medicare Part B isn’t just a detail—it’s a foundational rule in 2025 that affects your eligibility, costs, and access to care. By understanding this requirement, following the correct timeline, and taking steps early, you can ensure your health coverage remains uninterrupted and cost-effective.

If you’re unsure about your status or timeline, reach out to a licensed insurance agent listed on this website for personalized guidance. It’s better to ask now than to pay later.