Key Takeaways

  • Medicare enrollment is required for certain Postal Service Health Benefits (PSHB) enrollees, especially if you or a covered family member are eligible due to age or disability.

  • Failing to enroll in Medicare Part B when required can result in significant coverage limitations and unexpected out-of-pocket costs under PSHB.

PSHB and Medicare Are Not Separate Decisions

You might assume that your decision to enroll in Medicare is independent from your Postal Service Health Benefits (PSHB) coverage. But under the new rules that took effect in 2025, these two systems are tightly interwoven. If you or a family member enrolled in PSHB are eligible for Medicare, your participation in Part B can directly impact your health benefits.

This is not how it worked under the Federal Employees Health Benefits (fehb) Program. Before the shift, Medicare enrollment was encouraged but not mandatory. PSHB, however, introduces a requirement for some enrollees that you cannot afford to ignore.

Who Must Enroll in Medicare Part B Under PSHB?

Not every PSHB enrollee is required to sign up for Medicare Part B, but many are. The rule applies primarily to annuitants and covered family members who meet the following conditions:

  • You are entitled to Medicare Part A (hospital insurance) at no cost

  • You are age 65 or older or qualify due to disability

  • You retire on or after January 1, 2025, unless an exception applies

This requirement also affects certain family members who are Medicare-eligible and covered under your PSHB plan.

Exceptions to the Requirement

Some individuals are exempt from mandatory Medicare Part B enrollment under PSHB, including:

  • Annuitants who retired on or before January 1, 2025

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

  • Individuals living permanently overseas

  • Those who receive coverage through the Indian Health Service or Veterans Affairs (VA)

If you fall into one of these categories, you may choose whether or not to enroll in Medicare Part B. However, if you’re not exempt, opting out of Part B comes with serious consequences.

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

If you are required to enroll in Medicare Part B but fail to do so, the PSHB plan you are in will treat you differently. Instead of covering services the way FEHB once did, the plan will:

  • Pay as if you had Medicare Part B

  • Leave you responsible for the portion Medicare would have covered

  • Restrict access to prescription drug coverage

This means that you could pay up to 80% of costs for many medical services out of pocket. PSHB plans are structured with the assumption that Medicare will be the primary payer for retirees. Without Part B, you lose that coordination.

Prescription Drug Coverage Gets Complicated

Beginning in 2025, PSHB plans automatically provide prescription drug coverage through Medicare Part D for all Medicare-eligible enrollees. This is called the Employer Group Waiver Plan (EGWP), which includes valuable benefits like:

  • A $2,000 annual out-of-pocket cap

  • A $35 insulin cap

  • An expanded pharmacy network

However, you can only receive this Part D drug coverage if you are enrolled in both Medicare Part A and Part B. If you skip Part B, you will not be eligible for this prescription benefit through PSHB. That means losing access to reduced-cost medications and network pharmacies.

Worse, if you opt out of this integrated Part D coverage, you cannot re-enroll later unless you experience a qualifying life event. This makes the decision permanent in most cases.

Enrollment Timing Matters

The timing of your Medicare enrollment is critical. Here’s a look at the enrollment windows you need to know:

Initial Enrollment Period (IEP)

This is a 7-month window around your 65th birthday:

  • Begins 3 months before your 65th birthday month

  • Includes your birthday month

  • Ends 3 months after your birthday month

Enrolling during this time ensures you won’t face late enrollment penalties.

Special Enrollment Period (SEP)

If you’re covered by active employment health coverage when you turn 65, you qualify for a Special Enrollment Period after you retire. This lasts for 8 months after your job-based coverage ends.

But keep in mind: PSHB considers you retired once you are no longer an active USPS employee. You must act within this 8-month window to avoid delays and penalties.

General Enrollment Period (GEP)

If you miss your IEP and SEP, you can only enroll between January 1 and March 31 each year. Coverage begins in July, and you may be subject to a late enrollment penalty that adds 10% to your Part B premium for each year you delayed.

PSHB Coordination of Benefits With Medicare

Once enrolled in both Medicare and PSHB, your benefits coordinate to help reduce your out-of-pocket costs. Here’s how they generally work together:

  • Medicare Part A and B become your primary coverage

  • PSHB becomes secondary, picking up costs Medicare doesn’t cover

This dual coverage usually results in:

  • Lower deductibles

  • Reduced coinsurance

  • Lower or waived copayments

Some PSHB plans even offer Medicare Part B premium reimbursement, which can significantly offset your monthly costs. However, this varies by plan and only applies if you’re enrolled in Part B.

If You Delay Enrollment or Opt Out

Choosing not to enroll in Part B—or delaying your enrollment—may feel like a way to save money in the short term. But the long-term consequences can outweigh those initial savings:

  • Higher out-of-pocket medical costs

  • No access to Medicare-integrated prescription drug benefits

  • Permanent late enrollment penalties

You could also face disruptions in coverage, fewer provider options, and coordination challenges between Medicare and your PSHB plan.

Planning Ahead Before You Retire

If you’re approaching retirement, it’s essential to begin planning your Medicare enrollment at least six months before your anticipated retirement date. You should:

  • Verify your Medicare eligibility and Part A entitlement

  • Review your retirement timeline to determine the applicable enrollment period

  • Evaluate whether any exceptions apply to you or your covered family members

  • Budget for Medicare Part B premiums and review how your PSHB plan coordinates with Medicare

Failing to prepare in advance can result in gaps in coverage or higher costs once you transition into retirement.

Spouses and Covered Family Members

Medicare requirements under PSHB also extend to your dependents who are covered under your plan. If your spouse or other covered family member becomes Medicare-eligible, they too may be required to enroll in Part B to maintain full PSHB benefits.

You need to track their eligibility status and ensure they meet enrollment timelines. If they don’t enroll, their benefits under PSHB will be limited just as yours would.

How to Enroll in Medicare

Enrollment in Medicare Part A and B is managed by the Social Security Administration. You can apply:

  • Online at SSA.gov

  • By phone at 1-800-772-1213

  • At your local Social Security office

Be sure to keep records of your application and confirmation of enrollment. These documents may be needed to verify eligibility with your PSHB plan.

What to Expect in Terms of Cost

In 2025, the standard Medicare Part B premium is $185 per month, with an annual deductible of $257. These figures may be higher if your income exceeds certain thresholds.

When combined with PSHB, however, your total out-of-pocket spending may actually decrease due to reduced coinsurance, waived deductibles, and better drug coverage—provided you enroll in both programs.

Get Ahead of the Enrollment Curve

Don’t wait until the last minute. The PSHB-Medicare integration makes it essential to align your enrollment with your retirement and eligibility milestones. Avoid surprises by reviewing your options now and developing a strategy that protects your health coverage for years to come.

Understanding Your Medicare Obligation Under PSHB

Medicare is not an afterthought under the PSHB program. It’s a central requirement for many enrollees—and ignoring it can seriously limit your coverage. You owe it to yourself and your family to take this requirement seriously. Review your status, understand your deadlines, and plan your transition carefully.

For personalized help with your Medicare and PSHB decisions, reach out to a licensed agent listed on this website.