Key Takeaways

• As of 2025, most Medicare-eligible Postal retirees must enroll in Medicare Part B to keep full PSHB coverage unless they meet very specific exemption criteria.

• Not enrolling in Part B when required can result in reduced benefits, loss of prescription drug coverage, and limited re-enrollment options.

The Shift to PSHB: What Changed for Postal Retirees

Beginning January 1, 2025, the new Postal Service Health Benefits (PSHB) program replaces FEHB for Postal Service employees and annuitants. This shift brings with it a significant rule: if you are eligible for Medicare, particularly Part B, and not already enrolled, you may now be required to do so to retain full PSHB coverage.

This is not a suggestion. For many retirees and family members, it is a condition. Understanding how Medicare Part B interacts with PSHB in 2025 is essential to protecting your health benefits.

Medicare Part B: A Quick Refresher

Medicare Part B covers:

• Outpatient doctor visits

• Preventive services

• Durable medical equipment

• Mental health services

• Emergency room visits not requiring admission

The 2025 Part B premium is $185 per month, with an annual deductible of $257. This is separate from any premiums you pay for your PSHB plan.

Why Medicare Part B Is Now a Critical Requirement

Before 2025, enrollment in Medicare Part B was optional for Postal retirees. However, with the launch of the PSHB program, that flexibility largely disappears. The law now mandates that certain Medicare-eligible retirees must enroll in Part B to remain eligible for full PSHB benefits.

This is especially important because PSHB plans are designed to coordinate with Medicare. Many benefits, including prescription drug coverage and reduced cost-sharing, rely on the assumption that you have both Parts A and B.

Who Must Enroll in Medicare Part B

In 2025, you must enroll in Medicare Part B if:

• You are a Postal retiree who is already Medicare eligible

• You turn 65 and become eligible for Medicare after January 1, 2025

• Your covered family member becomes eligible for Medicare after January 1, 2025

Failure to enroll when required can lead to:

• Loss of PSHB medical and drug coverage

• Higher out-of-pocket costs

• Delays in re-enrollment opportunities

Who Is Exempt from the Part B Requirement

You are not required to enroll in Medicare Part B if any of the following apply:

• You retired on or before January 1, 2025, and are not currently enrolled in Part B

• You are an active Postal Service employee as of January 1, 2025, and you turn 65 while still working

• You reside overseas with no access to Medicare-covered providers

• You receive health services exclusively through the VA or Indian Health Services

Even if you meet one of these exemptions, it is crucial to review your situation annually, as future changes (like returning to the U.S. or retiring after deferral) could trigger the Part B requirement.

The Medicare Part B Special Enrollment Period (SEP)

To help with the transition, a one-time Special Enrollment Period (SEP) ran from April 1 through September 30, 2024. During this time, eligible Postal retirees and family members could enroll in Medicare Part B without a late enrollment penalty.

If you missed that SEP and you are now required to enroll, you may face a late penalty of 10% per year delayed unless you qualify for another SEP through other circumstances (e.g., loss of employer coverage).

How Medicare Part B Enhances Your PSHB Plan

When you enroll in both PSHB and Medicare Part B, the plans coordinate benefits, reducing your out-of-pocket expenses.

Here’s what that often looks like:

• Lower copayments and coinsurance for many services

• Deductibles may be waived or reduced

• Prescription drug costs drop significantly, thanks to integration with Medicare Part D through a Part D Employer Group Waiver Plan (EGWP)

Some PSHB plans may also offer incentives such as partial Part B premium reimbursements or additional coverage if you enroll in both Parts A and B.

What Happens If You Don’t Enroll in Medicare Part B

Skipping Part B when it is required has serious consequences:

• Your PSHB medical coverage may be suspended or significantly reduced

• Prescription drug coverage through PSHB could be terminated, as it depends on Medicare coordination

• Re-enrollment into PSHB drug benefits may not be allowed except during limited windows or qualifying life events

You will likely end up paying more for medical services out-of-pocket, with less protection from high-cost care.

Timing Matters: Enrollment Windows You Need to Know

To avoid gaps in coverage or penalties, keep the following timelines in mind:

• Initial Enrollment Period (IEP): Begins 3 months before your 65th birthday, includes the month of your birthday, and ends 3 months after

• General Enrollment Period (GEP): January 1 to March 31 each year (if you miss IEP)

• Coverage from GEP starts July 1, and may come with late penalties

If you miss your window and do not qualify for a Special Enrollment Period, you may be locked out of Part B and PSHB drug benefits for months.

What to Consider Before Delaying Part B

Delaying Medicare Part B might seem like a cost-saving choice, but for PSHB enrollees, it often backfires. Here’s why:

• PSHB is now structured to work with Medicare Part B; without it, your PSHB plan behaves like a secondary plan with reduced coverage

• Even if you’re exempt today, losing that exemption later (like moving back to the U.S.) could force enrollment at a later date—with penalties

• You could end up permanently excluded from PSHB drug coverage if you opt out of Part B now

PSHB Prescription Drug Coverage: Tied to Medicare Participation

Another major change in 2025 is that prescription coverage through PSHB is delivered via a Medicare Part D EGWP. You are automatically enrolled in this plan only if you are enrolled in both Medicare Part A and B.

If you opt out of Medicare Part B:

• You forfeit your Part D EGWP coverage

• You lose access to PSHB-covered drugs

• You may not be allowed to rejoin until the next Open Season or qualifying event

This makes drug coverage directly contingent on Medicare enrollment.

Common Questions About the New Rules

Can I keep my PSHB plan without Medicare Part B?

Yes, but only if you meet the exemption criteria. Otherwise, your PSHB coverage will be limited or dropped.

What if my spouse is Medicare-eligible but I’m not?

Each person is evaluated separately. If your spouse is Medicare-eligible and not enrolled in Part B, they may lose their PSHB drug and medical benefits—even if you remain covered.

What if I missed the 2024 SEP?

You can still enroll during the General Enrollment Period (January 1 to March 31), but coverage starts in July and penalties may apply.

Steps to Take Now

1. Check your Medicare eligibility: Are you 65 or older? Have you worked enough quarters?

2. Determine if you’re exempt: Use the criteria above to assess whether you fall into an exception

3. Enroll in Medicare Part B: If required, don’t delay. Late penalties and gaps in coverage are avoidable

4. Review your PSHB plan options: Some plans offer extra benefits for Medicare-enrolled members

5. Get help if you’re unsure: Speak to a licensed agent listed on this website for one-on-one assistance

Medicare and PSHB: The Coordination Is Built In

The new structure of PSHB assumes Medicare is the primary payer for eligible retirees. If you enroll in both, Medicare pays first, and your PSHB plan picks up many remaining costs. If you opt out, your PSHB plan may not pay at all.

This coordination is designed to lower both your expenses and the government’s cost, but it only works if you meet the enrollment requirements.

Safeguarding Your Postal Retirement Health Benefits

If you’re a Postal retiree or annuitant in 2025, Medicare Part B is more than a supplement. It’s a gatekeeper to your full PSHB coverage. Failing to enroll can cause your drug and medical benefits to shrink or disappear entirely. Even if you think you’re exempt, it’s worth reviewing your status, especially if your circumstances change.

For support in choosing the right course of action, get in touch with a licensed agent listed on this website who can review your eligibility and explain your options in detail.