Key Takeaways

  • If you’re enrolled in or approaching enrollment in the Postal Service Health Benefits (PSHB) Program and nearing age 65, it’s critical to understand whether you’re required to enroll in Medicare Part B to keep your coverage.

  • While Medicare Part B is technically optional, PSHB rules may make it mandatory for certain retirees to maintain their full health benefits.

Understanding the PSHB and Medicare Intersection

The Postal Service Health Benefits (PSHB) Program began in 2025 as a replacement for the Federal Employees Health Benefits (FEHB) Program for Postal Service employees and retirees. One of the most significant changes under PSHB involves how it integrates with Medicare, especially for those nearing age 65.

When you turn 65, you become eligible for Medicare. But just because you’re eligible doesn’t mean you can ignore what PSHB expects of you. To maintain uninterrupted and full health coverage under the PSHB program, your decision around Medicare Part B becomes more than just a personal choice. It may be a program requirement.

Who Must Enroll in Medicare Part B?

Starting in 2025, many PSHB annuitants and their covered family members must be enrolled in Medicare Part B as a condition to continue PSHB coverage. The requirement affects those who:

  • Are annuitants (or family members) who are Medicare-eligible,

  • Turned 65 after January 1, 2025, and

  • Are not otherwise exempt under specific rules.

If you fall into this category and you choose not to enroll in Part B, you may lose your PSHB coverage entirely.

Exceptions to the Rule

Some individuals are not required to enroll in Medicare Part B to keep their PSHB plan. These include:

  • Annuitants who retired on or before January 1, 2025

  • Employees who were aged 64 or older as of January 1, 2025

  • Individuals living outside the United States

  • Those eligible for health coverage from the Department of Veterans Affairs (VA) or Indian Health Services (IHS)

If you fall under any of these exceptions, you can keep your PSHB coverage without enrolling in Part B. But be cautious: if your circumstances change, your exemption status might also change.

The Timing of Your Medicare Decisions

Most people become eligible for Medicare when they turn 65. You have a 7-month window called the Initial Enrollment Period (IEP) to sign up for Medicare:

  • 3 months before your 65th birthday

  • The month of your 65th birthday

  • 3 months after your 65th birthday

If you’re required to enroll in Part B under PSHB rules and miss this window, you may face late enrollment penalties and, more importantly, a disruption or loss of PSHB coverage.

What Happens If You Delay Part B?

If you delay enrolling in Medicare Part B without having other credible coverage (and you don’t meet an exemption), you may:

  • Be removed from your PSHB plan

  • Owe a lifetime late enrollment penalty on your Medicare Part B premium

  • Face a gap in coverage until the next available enrollment period

Delaying enrollment is risky unless you’re absolutely sure you qualify for an exception or still have active employment-based health coverage.

Why PSHB Encourages Part B Enrollment

The PSHB Program is designed to work alongside Medicare, particularly Parts A and B. When you have both PSHB and Medicare, your costs are often lower because:

  • Medicare pays first for most services

  • Your PSHB plan may waive deductibles or coinsurance

  • Some PSHB plans offer additional cost-sharing benefits for Part B enrollees

In this way, Medicare Part B can act as a cost-reduction tool for those who qualify. The PSHB structure assumes this pairing, which is why Part B enrollment is strongly tied to your continued eligibility for benefits.

Drug Coverage Tied to Medicare

For those who are Medicare-eligible, PSHB plans automatically provide prescription drug coverage through a Medicare Part D Employer Group Waiver Plan (EGWP). You cannot enroll in this drug plan unless you also have Medicare Part A and B.

If you decline Medicare Part B, you also lose access to your PSHB prescription drug benefits unless you’re exempt. And since drug coverage is essential for many retirees, losing this benefit could create financial strain.

How to Know If You’re Required to Enroll

The Office of Personnel Management (OPM) sends out notices before and during the Open Season period, which runs from November to December each year. These notices let you know if you’re required to have Medicare Part B to keep your PSHB plan.

If you’re approaching age 65, pay close attention to any communication from OPM or your plan provider. Notices may include:

  • Medicare eligibility verification

  • Enrollment confirmation deadlines

  • Consequences of non-enrollment

What to Do If You’re Still Working at 65

If you’re still employed by the USPS at age 65, you are not yet an annuitant. That means you’re not required to enroll in Medicare Part B until you retire.

Once you do retire, your Medicare Special Enrollment Period (SEP) begins. This SEP lasts 8 months from the end of your employment or employer-provided coverage, whichever comes first. Enrolling during this SEP allows you to avoid the late penalty and ensures continuous PSHB coverage if Part B is required for you.

PSHB Plan Savings for Part B Enrollees

Many PSHB plans offer incentives or cost-sharing reductions if you’re enrolled in Medicare Part B, such as:

  • Reduced or waived deductibles

  • Lower coinsurance and copayment amounts

  • Access to a broader provider network

  • Reimbursement for some or all of your Part B premium (in select cases)

These features can make having both PSHB and Part B financially advantageous, even if you’re not strictly required to enroll.

Common Misunderstandings About Medicare and PSHB

“Medicare is optional, so I can just skip Part B.”

Not necessarily. While Medicare is federally optional, the PSHB program makes it conditionally mandatory. Skipping it could mean losing your entire health plan.

“I paid into Medicare, so it should cover everything.”

Part A covers hospital stays, but Part B covers outpatient care, preventive services, and doctors’ visits. Without Part B, your PSHB plan may not cover many services fully.

“I’ll just wait until I need it.”

Waiting may cost you a lifetime penalty and loss of access to PSHB benefits. Don’t wait unless you’re actively working or exempt.

How to Enroll in Medicare Part B

You can enroll in Medicare online through the Social Security Administration’s website, by phone, or in person at your local office. Here’s what you’ll need:

  • Your Social Security number

  • Proof of age (birth certificate or passport)

  • Current insurance information

Make sure to initiate enrollment at least 3 months before your 65th birthday to ensure your coverage starts on time and meets PSHB requirements.

If You Missed Your Initial Enrollment Period

If you didn’t enroll in Part B during your IEP and don’t qualify for a SEP, your only chance to enroll may be during the General Enrollment Period (GEP) from January 1 to March 31. Coverage then starts July 1, and you may owe a late penalty.

This delay could disrupt your PSHB benefits or leave you without coverage, so use the IEP or SEP whenever possible.

Make the Right Choice for Long-Term Coverage

Your decision to enroll in Medicare Part B at or near age 65 is no longer just about Medicare. If you’re part of the PSHB Program, that decision also affects whether you can keep your plan and access your prescription drug coverage.

Planning ahead, understanding your eligibility, and acting during your enrollment window are essential steps. Even if you’re not required to enroll in Part B, you might find that doing so offers better value and broader protection in retirement.

Your Medicare Decision and PSHB Future Are Tied Together

Understanding the PSHB requirements for Medicare Part B enrollment is essential if you’re nearing age 65. Missing a step can have serious consequences, including losing coverage or paying penalties.

Don’t assume Medicare is optional in your case. Review your situation carefully. For help determining whether you’re required to enroll or to better understand your health plan’s coordination with Medicare, speak to a licensed agent listed on this website.