Key Takeaways

• If you’re a Postal Service retiree or annuitant who is eligible for Medicare, enrolling in Medicare Part B is not optional under the 2025 PSHB rules unless you meet specific pre-retirement exceptions.

• Failing to enroll in Medicare Part B will lead to termination of your PSHB plan coverage, and this consequence applies without exception once you are retired.

Understanding the PSHB and Medicare Part B Rule

As of 2025, the Postal Service Health Benefits (PSHB) Program operates under a critical coordination rule: Medicare-eligible annuitants and their family members must enroll in Medicare Part B to maintain PSHB coverage. This rule is not flexible for retirees, and exceptions only apply to a narrowly defined group of individuals who meet specific conditions before retirement.

PSHB was designed to align with Medicare and control long-term healthcare costs. In doing so, it requires dual enrollment—especially in Medicare Part B—for the system to function effectively. If you’re planning to retire from the Postal Service or are already retired, understanding this requirement is essential to avoid losing your health benefits.

Who Must Enroll in Medicare Part B

You must enroll in Medicare Part B to maintain your PSHB coverage if you are:

• A Medicare-eligible Postal Service annuitant (retiree)

• A Medicare-eligible family member covered under your PSHB plan

This applies to those turning 65 and those who qualify for Medicare due to disability.

Who Is Exempt From the Requirement

There are limited exceptions, but they apply only if certain criteria were met before January 1, 2025:

• You retired on or before January 1, 2025, and were not enrolled in Medicare Part B at that time.

• You were an active Postal Service employee who was age 64 or older as of January 1, 2025.

• You live overseas and are not eligible for Medicare Part B services.

• You are covered by certain other qualifying government health services (e.g., Veterans Affairs or Indian Health Services).

If you don’t fall into one of these categories, then enrolling in Medicare Part B is mandatory to maintain PSHB coverage.

Why the Rule Exists

The requirement is rooted in the PSHB Program’s cost-sharing structure. Medicare is the primary payer once you turn 65, and PSHB plans become secondary payers. This setup helps reduce your out-of-pocket expenses and the plan’s total costs.

By requiring Medicare Part B enrollment, the PSHB Program:

• Coordinates coverage to minimize coverage gaps

• Reduces overall claims costs for the system

• Aligns your benefits with the structure of integrated Medicare Advantage Employer Group Waiver Plans (EGWPs) often used by PSHB carriers

What Happens If You Don’t Enroll

If you are required to enroll in Medicare Part B and do not:

• Your PSHB plan will disenroll you from coverage.

• You cannot re-enroll unless you become newly eligible through a life event that qualifies for a Special Enrollment Period.

• You will be left without health coverage through the PSHB system.

This is a permanent consequence unless your situation qualifies for a new enrollment opportunity.

Enrollment Timelines to Remember

To avoid disruptions, follow these enrollment timelines:

• Initial Enrollment Period (IEP): Begins three months before your 65th birthday, includes your birthday month, and ends three months after. You must enroll in Medicare Part B during this window.

• Special Enrollment Period (SEP): If you delayed Part B because you were actively working and covered under PSHB, you have up to eight months after employment ends to enroll without a late penalty.

• General Enrollment Period (GEP): Runs annually from January 1 to March 31, with coverage beginning in July. If you miss your IEP and SEP, this is your fallback—but late enrollment penalties will apply.

Late Enrollment Penalties

Missing your Medicare Part B enrollment window can result in lifetime penalties:

• The premium increases by 10% for every 12-month period you were eligible but didn’t enroll.

• This penalty applies for as long as you have Medicare Part B.

PSHB will not wait for you to resolve this. If you should have been enrolled and you’re not, your plan will end your coverage even if you intend to enroll later.

Medicare Part B Costs in 2025

For 2025, the standard monthly premium for Medicare Part B is $185, with an annual deductible of $257. If your income is above certain thresholds, your monthly premium may include an Income-Related Monthly Adjustment Amount (IRMAA).

Keep in mind:

• PSHB plans often reduce or waive cost-sharing for members enrolled in Part B.

• Some PSHB plans offer partial reimbursement of the Part B premium, depending on plan rules.

However, these advantages only apply after you’ve enrolled in Medicare Part B.

PSHB Prescription Drug Coverage and Medicare

Another critical integration: if you’re Medicare-eligible and enrolled in Part B, your PSHB plan automatically provides prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP).

• This includes an annual $2,000 out-of-pocket cap for prescription drugs.

• Most plans also feature a $35 monthly cap for insulin, enhanced pharmacy networks, and home delivery options.

• Opting out of Part D disenrolls you from the EGWP coverage, which could drastically increase your drug costs.

Coordinating Claims: How It Works

Once you’re enrolled in both PSHB and Medicare Part B:

• Medicare Part B pays first for medical services.

• Your PSHB plan pays second, reducing or eliminating your share of the costs.

This layered coverage results in:

• Lower copayments

• Waived deductibles

• Reduced coinsurance

Failure to enroll in Medicare disrupts this order, placing you at risk for higher medical bills or total loss of PSHB coverage.

Key Administrative Steps

To stay compliant:

• Enroll in Medicare Part B during your Initial Enrollment Period.

• Provide your Medicare Beneficiary Identifier (MBI) to your PSHB plan.

• Keep your contact information up to date with the Social Security Administration and OPM.

• Watch for PSHB communications and respond promptly to any coverage-related requests.

The Role of Life Events

In some situations, such as marriage, divorce, or loss of other coverage, you may qualify for a Special Enrollment Period (SEP) to sign up for Medicare Part B or make changes to your PSHB plan. These events are your only opportunities to correct a lapse in coverage if you’ve missed earlier deadlines.

Retiree Planning Starts Now

If you’re currently working for USPS and planning to retire soon, you must consider:

• Whether you meet any exemption criteria

• When you’ll become Medicare-eligible

• How you’ll coordinate both Medicare and PSHB

Many employees mistakenly assume that their strong PSHB plan will continue to function independently after retirement. In reality, it cannot—unless Medicare Part B is in place.

Enrolling Online or In Person

You can enroll in Medicare Part B:

• Online via the Social Security Administration’s website

• By calling or visiting your local Social Security office

Make sure to do this at least two to three months before your 65th birthday to ensure smooth processing.

The Cost of Inaction Is High

Failing to act can leave you exposed to:

• Sudden loss of health coverage

• Lifetime late enrollment penalties

• Unplanned out-of-pocket medical costs

• Disqualification from PSHB Part D prescription benefits

In 2025, PSHB compliance is not flexible once you’re retired. Even if you were unaware of the rules, you will not be excused.

Don’t Let a Missed Deadline Derail Your Health Coverage

Planning for Medicare Part B alongside your PSHB enrollment is not just smart—it’s mandatory for most retirees. With tight rules and irreversible penalties, taking the right action at the right time is crucial.

If you’re unsure about your status or need help understanding your Medicare and PSHB responsibilities, get in touch with a licensed agent listed on this website for guidance. It’s the best way to ensure you won’t lose the benefits you’ve worked hard to earn.