Key Takeaways

  • You must meet strict enrollment timelines and eligibility rules to qualify for PSHB coverage in retirement, regardless of how long you worked in the federal government.

  • Simply being a USPS career employee isn’t enough. If you don’t meet the 5-year enrollment rule or certain Medicare integration criteria, you could be denied coverage when you retire.

The Misconception About Lifetime Government Service

Many Postal Service employees assume that decades of dedicated service automatically guarantee continued health coverage after retirement. However, the transition to the Postal Service Health Benefits (PSHB) Program in 2025 introduces eligibility requirements that can disrupt this expectation—even for long-serving career employees.

In 2025, all USPS annuitants must be enrolled in a PSHB plan to maintain their federal health benefits. The eligibility to enroll in PSHB isn’t just about your job title or years of service—it hinges on how consistently you’ve been enrolled in qualifying health coverage before retirement and how your Medicare status aligns with PSHB requirements.

You Must Be Enrolled in FEHB or PSHB for 5 Years Before Retirement

One of the most overlooked rules is the 5-Year Enrollment Requirement. To qualify for continued health coverage into retirement:

  • You must be enrolled in an FEHB or PSHB plan for the five years immediately before retiring,

  • Or, you must have been covered for the entire period of federal service if you were hired less than five years before retiring.

Why This Rule Matters in 2025

In the shift from FEHB to PSHB, many career employees nearing retirement are realizing too late that they aren’t eligible to continue their coverage. For example, if you opted out of FEHB coverage earlier in your career and only enrolled in the last year or two, you won’t qualify for PSHB coverage after retirement.

And remember: enrollment under a spouse’s FEHB doesn’t count unless you were listed as a covered family member on their Self Plus One or Self and Family plan.

Medicare Part B Enrollment is Mandatory for Most Retirees

Starting January 1, 2025, Medicare Part B enrollment is required for certain annuitants to keep their PSHB coverage.

Who Must Enroll in Part B

You must be enrolled in Medicare Part B if:

  • You are a Postal Service annuitant eligible for Medicare (typically age 65 or older), and

  • You retired after January 1, 2025, and

  • You are not otherwise exempt.

Who Is Exempt

You may be exempt from the Part B requirement if:

  • You retired on or before January 1, 2025,

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

  • You live abroad (outside the U.S. and its territories),

  • You qualify for Veterans Affairs or Indian Health Services benefits that conflict with Medicare.

Failing to enroll in Medicare Part B if required could mean losing access to prescription drug benefits and enhanced cost savings that your PSHB plan offers.

Retiring Without Meeting Both Conditions? You May Be Denied Coverage

Even if you worked for the federal government for 30 or more years, your PSHB application can be denied if you:

  • Didn’t maintain FEHB or PSHB enrollment for the required 5 years prior to retirement,

  • Don’t enroll in Medicare Part B when required.

And unlike other benefits, there is no appeal process for failing to meet the 5-year rule. The only exceptions are waivers issued under extremely limited circumstances, such as when documentation proves you attempted to enroll but were unable due to administrative error.

Survivor Benefits Depend on Proper Enrollment Type

It’s not just your own coverage that’s at risk. If you want your spouse or eligible dependents to continue receiving health coverage after your death, you must:

  • Be enrolled in a Self Plus One or Self and Family plan at the time of your death,

  • Elect a survivor annuity at retirement, and

  • Ensure your survivors are eligible family members under PSHB rules.

If you retire under a Self Only plan, your survivors will not be eligible for continued coverage, even if they were previously covered under FEHB.

Automatic Enrollment Isn’t Guaranteed

Some USPS employees assume that their coverage will automatically convert from FEHB to PSHB. While that may be true for actively enrolled workers and annuitants, it does not apply if:

  • You are not currently enrolled in FEHB before the PSHB transition,

  • You fail to enroll during Open Season or a qualifying life event (QLE),

  • You become ineligible due to missing Medicare Part B enrollment.

In other words, automatic enrollment will only work if you are already participating and meet all other criteria.

Watch for the Part D Prescription Drug Auto-Enrollment

Starting in 2025, if you’re a Medicare-eligible annuitant and enrolled in a PSHB plan, you will also be automatically enrolled in a Medicare Part D plan (known as an EGWP: Employer Group Waiver Plan).

What This Means for You

  • You may no longer need to maintain a separate Part D plan.

  • If you opt out of this automatic Part D plan, you will lose prescription drug coverage under PSHB.

  • The Part D EGWP includes a $2,000 annual out-of-pocket maximum and coverage for insulin capped at $35/month.

Make sure your Medicare enrollment is active to avoid disruptions in prescription drug coverage.

Common Scenarios That Lead to Ineligibility

Several situations can unexpectedly disqualify you from PSHB coverage:

  • You dropped FEHB coverage earlier in your career and didn’t re-enroll in time.

  • You stayed on your spouse’s private insurance instead of enrolling in FEHB or PSHB.

  • You assumed you could wait until retirement to enroll in health benefits.

  • You missed the Medicare Part B sign-up window.

  • You enrolled in Self Only at retirement but hoped for survivor coverage.

Each of these situations can result in permanent loss of PSHB eligibility.

Timing and Deadlines You Must Know in 2025

To retain or begin your PSHB coverage this year, you need to act within the following timelines:

  • Open Season runs from November to December, allowing you to enroll or change plans.

  • Medicare Special Enrollment Period for PSHB-related Part B requirements concluded September 30, 2024, for those needing to enroll in time.

  • Plan coverage begins January 1, 2025, for those who enrolled during Open Season 2024.

  • You must be actively enrolled in PSHB before retiring in 2025 to keep your health coverage in retirement.

What You Can Do Now to Avoid Surprises

To make sure you don’t lose your health coverage after a full career, take the following steps:

  • Review your enrollment history. Confirm that you’ve maintained continuous FEHB or PSHB coverage for at least 5 years.

  • Check your Medicare status. If you’re turning 65 or older and plan to retire this year, start your Medicare Part B enrollment.

  • Switch from Self Only to Self Plus One or Self and Family if you want survivors to be eligible for continued coverage.

  • Enroll during Open Season or a Qualifying Life Event if you’re not currently enrolled.

  • Contact HR or a licensed agent to discuss your options if you’re unsure about your eligibility.

Keeping Your Health Benefits Starts With Awareness

The PSHB program offers valuable health and prescription drug coverage for eligible Postal Service retirees. But eligibility isn’t automatic, even for long-time federal employees. If you fail to meet the 5-year enrollment requirement or miss mandatory Medicare enrollment, you could lose access to these benefits just when you need them most.

Get clear on your coverage today. Confirm your eligibility, check your timelines, and speak to a licensed agent listed on this website to make sure you’re not missing a requirement that could jeopardize your future benefits.