Key Takeaways

  • Enrolling in Medicare Part B is not optional for many Postal Service retirees and their family members under the PSHB program. Your continued access to full PSHB coverage may depend on it.

  • Failing to enroll in Part B when required can result in reduced benefits, higher out-of-pocket costs, or even the loss of prescription drug coverage under the PSHB plan.

The PSHB Shift and the Role of Medicare Part B

In 2025, the Postal Service Health Benefits (PSHB) program officially replaces FEHB for Postal Service employees, annuitants, and their eligible family members. While many of the foundational aspects of coverage remain familiar, there are critical updates that affect how Medicare interacts with your health plan. Among the most impactful changes is that Medicare Part B isn’t just a helpful supplement to PSHB—for many of you, it’s now a requirement.

What Medicare Part B Covers

Before examining why it’s required under PSHB, it’s worth reviewing what Medicare Part B covers. As part of Original Medicare, Part B helps pay for:

  • Doctor visits (both primary and specialists)

  • Outpatient services and procedures

  • Preventive services (such as screenings and vaccines)

  • Durable medical equipment (like wheelchairs or oxygen equipment)

  • Certain home health care services

Unlike Part A, which most people receive without a premium if they worked long enough, Part B always has a monthly premium. For 2025, the standard premium is $185 per month, with higher amounts for individuals subject to IRMAA based on their income.

PSHB Makes Medicare Part B Enrollment Mandatory in Key Cases

The PSHB program integrates with Medicare more tightly than FEHB did. If you or your covered family member is Medicare-eligible, the PSHB rules now require you to enroll in Medicare Part B in many circumstances to retain full plan benefits.

This requirement specifically applies to:

  • Annuitants (retirees) who become eligible for Medicare on or after January 1, 2025

  • Family members who become eligible for Medicare on or after January 1, 2025

  • Annuitants who retired before 2025 but deferred Medicare and now wish to re-enroll in PSHB

Notably, if you retired before January 1, 2025, and are already enrolled in PSHB, you are not required to enroll in Part B. However, if you miss the required Medicare Part B enrollment window and do not qualify for an exemption, you may lose important aspects of PSHB coverage, such as prescription drug benefits.

Exceptions to the Part B Requirement

The PSHB program allows certain individuals to remain in their plan without enrolling in Part B. These exemptions include:

  • Annuitants who retired on or before January 1, 2025

  • Employees who were 64 or older as of January 1, 2025, and retire later

  • Those living abroad in countries where Medicare cannot be used

  • Enrollees who qualify for medical benefits through the VA or Indian Health Service

Even if you fall under one of these categories, it is still critical to evaluate whether enrolling in Part B might lower your costs. Many PSHB plans offer reduced cost-sharing when you are enrolled in both Medicare Parts A and B.

How Medicare Part B Coordinates with PSHB

When you are enrolled in both Medicare and a PSHB plan, Medicare becomes your primary payer and PSHB becomes secondary. This coordination often results in lower out-of-pocket costs, such as:

  • Reduced or eliminated deductibles

  • Lower copayments or coinsurance for services covered by both programs

  • Expanded access to providers who accept Medicare but not necessarily your PSHB plan

Additionally, PSHB plans often waive certain expenses if Medicare has already paid its portion. However, this cost-saving structure is only available to those who are actively enrolled in Part B.

The Risk of Skipping Part B Enrollment

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

  • Loss of employer-sponsored prescription drug coverage

  • Higher out-of-pocket costs for medical care

  • Possible termination from your PSHB plan if you do not meet the program’s eligibility criteria

It’s important to remember that PSHB plans automatically assume you will enroll in Part B when you become eligible. If you do not, your claims may be processed as if Medicare paid primary, even if it didn’t. That means you could be on the hook for costs Medicare would have paid.

Part B Enrollment Timing Matters

The Initial Enrollment Period (IEP) for Medicare is a seven-month window:

  • Begins three months before the month you turn 65

  • Includes your birth month

  • Ends three months after

Failing to enroll during this time can result in late penalties that last for life. The late enrollment penalty for Part B is an extra 10% added to your premium for each 12-month period you delayed enrollment.

A Special Enrollment Period (SEP) was available from April 1 to September 30, 2024, for annuitants affected by the PSHB transition who missed their original Medicare enrollment window. If you didn’t take advantage of that SEP, you may now have to wait for the General Enrollment Period (January 1 to March 31), with coverage starting in July.

How Part B Affects Your PSHB Prescription Drug Coverage

In 2025, PSHB plans automatically include prescription drug benefits for Medicare-eligible enrollees through a Medicare Part D Employer Group Waiver Plan (EGWP). However, to access this EGWP coverage, you must be enrolled in both Medicare Part A and Part B.

If you decline Part B, you forfeit the prescription drug coverage embedded in your PSHB plan. This is a major change from how FEHB operated in the past and can leave you without comprehensive medication coverage.

Cost Sharing Changes Based on Part B Enrollment

Your out-of-pocket costs within the PSHB program can differ significantly based on whether or not you have Part B. Here are some general differences:

With Medicare Part B enrollment:

  • Lower copayments for specialist and primary care visits

  • Waived or reduced deductibles in some PSHB plans

  • Cost savings on outpatient procedures

  • Access to a broader network of providers

Without Medicare Part B enrollment:

  • Standard deductibles apply

  • Full coinsurance for many services

  • Limited drug coverage or none at all

  • Potential denial of certain claims under the assumption Medicare would have paid

Planning Ahead: Medicare + PSHB Strategy

If you are approaching age 65 or nearing retirement, here are steps you should take now:

  • Check your retirement date. If you retire in 2025 or later, you likely fall under the Part B requirement.

  • Review your Medicare eligibility. Confirm your eligibility and understand your Initial Enrollment Period.

  • Assess your PSHB plan. Contact your PSHB plan or a licensed agent to confirm how benefits are coordinated with Medicare.

  • Compare total costs. Even with the added premium, having Part B can result in lower net healthcare expenses.

  • Document exemptions. If you believe you qualify for a waiver, make sure it’s formally recorded with the Office of Personnel Management (OPM).

What Happens if You Miss the Deadline?

If you miss your Medicare Part B enrollment and don’t qualify for an exemption, you may not be able to:

  • Rejoin your PSHB plan during future Open Seasons

  • Access your plan’s prescription drug coverage

  • Avoid late enrollment penalties, which apply for life

The only option to recover eligibility is typically to wait for the General Enrollment Period, which runs from January 1 through March 31, with coverage starting in July. During this gap, you may face a period without full PSHB or Medicare coordination.

Why You Need a Clear Plan

The PSHB shift has changed how Medicare and employer health plans work together. You can no longer assume you can wait on Medicare decisions. The new structure requires active planning and early action.

Whether you are a career Postal Service employee nearing retirement or a current annuitant approaching age 65, aligning your Medicare choices with PSHB rules is now part of preserving your benefits.

Coordinating Part B and PSHB Is No Longer Optional

Your PSHB plan doesn’t just assume you might enroll in Part B. In many cases, it requires it. Avoiding that step can result in coverage losses and added expenses you didn’t anticipate.

Speak with a licensed agent listed on this website to walk through your enrollment timelines and confirm how your PSHB plan coordinates with Medicare Part B. A few hours of planning now can protect your health and financial stability for years ahead.