Key Takeaways

• In 2025, Medicare Part B enrollment becomes mandatory for many Postal Service annuitants and their covered family members to maintain their PSHB coverage.

• Failing to enroll in Part B when required can result in losing key PSHB benefits, including integrated prescription drug coverage and reduced cost-sharing.

Understanding Medicare Part B Within the PSHB Framework

The Postal Service Health Benefits (PSHB) Program now requires closer coordination with Medicare, especially Medicare Part B. As of 2025, the integration of Medicare and PSHB changes how you manage your healthcare in retirement.

Medicare Part B, which covers outpatient care, doctor visits, and preventive services, plays a pivotal role in determining how much you pay out-of-pocket and what services are covered. When combined correctly with your PSHB plan, Part B can significantly reduce your healthcare expenses. But for some annuitants and family members, it is no longer a choice—it is required.

Who Must Enroll in Medicare Part B in 2025

Beginning January 1, 2025, enrollment in Medicare Part B becomes mandatory for certain annuitants and covered family members. You are required to enroll in Medicare Part B to keep your PSHB plan if:

• You are a Postal Service annuitant or family member who is Medicare-eligible and

• You are enrolled in Medicare Part A and

• You are not exempt based on retirement status or age.

Exemptions

Some individuals are exempt from the mandatory Part B requirement:

• You retired on or before January 1, 2025.

• You are an active USPS employee who is age 64 or older as of January 1, 2025.

• You live permanently outside the United States.

• You are enrolled in the VA or Indian Health Service that provides primary care.

If you fall under these categories, you may keep your PSHB coverage without enrolling in Medicare Part B. However, if you lose this exemption or become eligible later, you must enroll in Part B to avoid losing PSHB benefits.

The Cost of Medicare Part B in 2025

In 2025, the standard monthly premium for Medicare Part B is $185. Higher-income beneficiaries pay more based on Income-Related Monthly Adjustment Amounts (IRMAA), which are tied to your modified adjusted gross income from two years prior (2023 tax year).

There is also an annual deductible of $257. After meeting the deductible, you typically pay 20% coinsurance for most covered services.

While these costs can seem high, your PSHB plan may reduce or eliminate some of your out-of-pocket expenses if you are also enrolled in Part B.

What Happens If You Don’t Enroll When Required

Failing to enroll in Medicare Part B when required under PSHB rules can have serious consequences:

• Loss of PSHB drug coverage: You will be automatically disenrolled from the Medicare Part D Employer Group Waiver Plan (EGWP), which includes prescription drug coverage.

• Loss of coordination benefits: Your PSHB plan may not cover services in full without Part B, meaning higher deductibles and coinsurance.

• Limited re-enrollment: Opting out of Part B when required can limit your ability to rejoin PSHB drug coverage later.

• Late enrollment penalties: If you delay enrolling in Part B beyond your Initial Enrollment Period, you may face a lifetime premium penalty, adding 10% for every full 12 months of delay.

How Part B Enhances PSHB Benefits

When you are enrolled in both Medicare Part B and a PSHB plan, your benefits can align to reduce out-of-pocket costs. Here’s how this integration works in 2025:

• Lower deductibles: Many PSHB plans waive or reduce in-network deductibles when you have Part B.

• Reduced copayments: You may pay less for outpatient visits and services.

• Medicare as primary: Medicare pays first, and PSHB pays secondary, covering most or all of the remaining costs.

• Prescription drug savings: You gain access to enhanced drug benefits through Medicare Part D EGWP, including a $2,000 out-of-pocket cap.

This coordination is designed to offer comprehensive coverage with minimal gaps.

Enrollment Timeline: Key Deadlines and Periods

You must enroll in Medicare Part B during specific timeframes to avoid penalties or loss of coverage:

• Initial Enrollment Period (IEP): Starts three months before the month you turn 65 and ends three months after.

• General Enrollment Period (GEP): Runs from January 1 to March 31 each year. Coverage begins July 1, but late enrollment penalties may apply.

• Special Enrollment Period (SEP): If you missed IEP and had other coverage, such as employer group health, you may qualify for a penalty-free SEP.

For PSHB-specific enrollment, make sure you:

• Review your eligibility status in early 2025.

• Submit your Medicare Part B enrollment if required before your PSHB plan denies coordination.

• Use the Social Security Administration’s website or contact center to enroll in Part B.

What You Need to Know About Prescription Drug Coverage

As of 2025, Medicare-eligible annuitants enrolled in PSHB receive drug coverage through a Medicare Part D EGWP. This prescription drug plan offers:

• An annual out-of-pocket cap of $2,000.

• A monthly payment option through the Medicare Prescription Payment Plan, allowing you to spread drug costs over time.

• Coverage for insulin at $35 or less per month, per covered prescription.

• Access to a broader pharmacy network.

However, you only retain this benefit if you stay enrolled in Medicare Part B. Dropping Part B also disqualifies you from the PSHB Part D EGWP coverage.

Why PSHB and Medicare Part B Are Now Tied Together

This shift toward mandatory Medicare Part B enrollment under the PSHB Program is driven by legislative reforms aimed at reducing costs for both enrollees and the system as a whole.

By requiring Medicare-eligible annuitants to enroll in Part B:

• The federal government can reduce duplicate payments.

• PSHB plans can align their benefits more efficiently.

• Enrollees can benefit from better coordination and lower out-of-pocket costs.

The integration also reflects the broader move to ensure sustainability and affordability in retiree healthcare benefits.

What If You Missed Your Chance to Enroll?

If you missed your Initial Enrollment Period and don’t qualify for a Special Enrollment Period, you must wait for the next General Enrollment Period (January 1 to March 31). Your Part B coverage will then begin on July 1.

You may face a late enrollment penalty that adds 10% to your premium for every 12-month period you delayed enrollment. This penalty applies for life unless you qualify for Medicaid or other limited exceptions.

Avoid this by enrolling as soon as you’re eligible—particularly if you are required to under the PSHB rules.

Staying in Compliance with PSHB in 2025

Here’s how to stay on the right track this year:

• Confirm whether you are required to enroll in Medicare Part B based on your retirement date and age.

• If required, ensure you are enrolled in both Medicare Part A and Part B.

• Keep records of your Medicare enrollment and confirm your status with your PSHB plan.

• Don’t delay. Late actions can lead to permanent penalties and coverage loss.

The stakes are higher in 2025 due to new requirements and tighter enforcement. Being proactive is key.

Where You Can Get Personalized Help

Medicare enrollment can be complicated. And now that it directly affects your PSHB coverage, the need for accurate, personalized advice is more important than ever. If you’re unsure:

• Reach out to the Social Security Administration to confirm your Medicare eligibility and enrollment status.

• Talk to your PSHB plan for guidance on how Part B works with your benefits.

• Speak with a licensed agent listed on this website for help reviewing your options and obligations.

Keep Your Coverage Aligned to Avoid Unnecessary Costs

Your decisions about Medicare Part B are no longer independent from your PSHB benefits. They are now directly linked, especially for annuitants retiring in 2025 or later. Failing to understand or meet your Part B requirements could cost you prescription drug benefits, result in higher out-of-pocket expenses, or even lead to coverage loss.

Understanding these rules and timelines ensures that you can protect your health and your wallet. If you’re unsure where you stand, get in touch with a licensed agent listed on this website who can walk you through what to do next.