Key Takeaways

  • Turning 65 triggers critical Medicare rules that directly impact your Postal Service Health Benefits (PSHB) coverage. Knowing what changes and when helps you avoid coverage gaps or penalties.

  • Not enrolling in Medicare Part B on time when required can cause a permanent late enrollment penalty and affect your ability to keep prescription drug benefits under PSHB.

Medicare Becomes Central at Age 65

When you turn 65, the relationship between your PSHB coverage and Medicare changes significantly. Medicare becomes the primary payer for most eligible services, and your PSHB plan becomes secondary. This coordination isn’t optional—it’s built into the way your benefits work after 65. That means you need to be aware of enrollment timelines, integration rules, and what happens if you don’t act.

You Must Actively Enroll in Medicare Part A and Part B

Medicare isn’t automatic for everyone. If you’re receiving Social Security benefits at least four months before you turn 65, you’ll be automatically enrolled in Medicare Part A and Part B. If not, you must actively enroll.

  • Enrollment Period: Your Initial Enrollment Period (IEP) begins 3 months before your 65th birthday, includes the month of your birthday, and continues for 3 months after.

  • If you miss this window, you may have to wait for the General Enrollment Period (January 1 to March 31), with coverage starting July 1 and a potential 10% penalty for each year you delayed Part B enrollment.

Medicare Part B Is Required to Keep Full PSHB Benefits

If you’re a Medicare-eligible PSHB annuitant or family member, your plan generally requires you to enroll in Medicare Part B to maintain full coverage. This includes integrated prescription drug coverage through Medicare Part D.

Exceptions Apply

Some individuals are exempt from the mandatory Part B rule:

  • Retired on or before January 1, 2025, and not already enrolled in Part B.

  • Were 64 or older as of January 1, 2025.

  • Living abroad.

  • Covered through the Veterans Health Administration or Indian Health Service.

If you don’t meet one of these exemptions, you must enroll in Part B to retain prescription drug coverage under PSHB.

PSHB Prescription Drug Coverage Integrates with Medicare Part D

Starting at age 65, your PSHB plan includes prescription drug coverage through Medicare Part D in the form of an Employer Group Waiver Plan (EGWP). This provides enhanced coverage:

  • $35 insulin cap

  • $2,000 annual out-of-pocket limit

  • Expanded pharmacy network

But these benefits are only available if you are enrolled in Part B. Opting out of Medicare Part B disqualifies you from receiving the EGWP drug benefit under your PSHB plan.

Coordination of Benefits Begins at 65

Once you turn 65 and enroll in Medicare:

  • Medicare becomes your primary insurance.

  • PSHB becomes your secondary payer.

This means Medicare pays first for services covered under Part A and Part B, and your PSHB plan pays after that. This coordination reduces your out-of-pocket costs in most cases, but it also means failing to enroll in Medicare results in higher personal expenses.

What Happens If You Delay Enrollment?

Delaying Medicare enrollment beyond age 65 can have serious consequences:

  • You may lose access to prescription coverage under PSHB.

  • You may pay full cost-sharing under PSHB, since it will no longer be the secondary payer.

  • You may face a permanent Part B late enrollment penalty.

The penalty is 10% for each full 12-month period you delayed enrollment when you were eligible. This amount is added to your Part B premium for life.

Don’t Rely on PSHB Alone After 65

Unlike before age 65, PSHB does not act as standalone coverage once Medicare becomes available. If you decline Medicare Part B:

  • You lose the coordination benefits.

  • You will pay more out of pocket for doctor visits, outpatient services, and labs.

  • You are disenrolled from PSHB prescription drug coverage.

In other words, ignoring Medicare leaves you underinsured.

What If You’re Still Working at 65?

If you’re an active USPS employee, you can delay enrolling in Medicare Part B without penalty, as long as:

  • You are enrolled in PSHB as an active employee.

  • You maintain creditable employer coverage.

When you retire or lose your employer coverage, you qualify for a Special Enrollment Period (SEP) lasting 8 months to sign up for Part B without a penalty.

SEP Does Not Cover Prescription Drug Plan Enrollment

Be careful: The SEP applies to Medicare Part B only. If you delay Part B enrollment and retire, you may lose access to your PSHB prescription drug coverage if you do not enroll in Part B immediately.

Spouses and Dependents Turning 65

The rules apply not only to you but also to your spouse or covered family members under your PSHB plan. If they become Medicare-eligible:

  • They must also enroll in Medicare Part B to keep full benefits.

  • Their PSHB drug coverage also integrates with Medicare Part D through EGWP.

Each person’s eligibility and enrollment status is evaluated separately.

Automatic Enrollment Does Not Apply to Everyone

Don’t assume Medicare will notify or enroll you automatically. You need to:

  • Confirm your eligibility.

  • Proactively enroll through Social Security if you aren’t receiving benefits.

  • Use the Initial Enrollment Period to avoid penalties.

Many people mistakenly believe PSHB is a substitute for Medicare. It is not. They work together, and failure to coordinate both leads to loss of benefits and higher costs.

Impact on Your PSHB Premiums and Cost Sharing

When you enroll in Medicare Part B, many PSHB plans offer:

  • Waived or reduced deductibles

  • Lower copayments or coinsurance

  • Increased cost savings for out-of-pocket expenses

These Medicare-related enhancements make it more cost-effective to enroll in Medicare, even though it comes with its own premium.

When and How to Enroll

Enroll in Medicare

  • Use the Social Security website or contact their office.

  • Begin enrollment 3 months before your 65th birthday to ensure coverage starts the month you turn 65.

Enroll in PSHB During Open Season

  • PSHB Open Season runs from November to December each year.

  • You can also enroll or make changes during a Qualifying Life Event (QLE), like retirement or Medicare eligibility.

Medicare Part B SEP After Employment Ends

  • You have 8 months to enroll in Part B without penalty after employment or group coverage ends.

  • The SEP does not reset your Initial Enrollment Period.

Things You Should Review at Age 65

To ensure a smooth transition and full PSHB benefits, take time to:

  • Verify your Medicare eligibility and enrollment.

  • Review your current PSHB plan’s coordination rules with Medicare.

  • Compare how cost-sharing changes once Medicare is primary.

  • Assess whether any family members on your plan are approaching 65.

These steps protect both your health coverage and your financial future.

Medicare Enrollment Is Not a One-Time Task

While initial enrollment occurs at 65, Medicare requires ongoing attention. Each year:

  • Review your Annual Notice of Change (ANOC) for updates to drug coverage, premiums, or cost-sharing.

  • Evaluate your PSHB plan during Open Season to ensure it still meets your needs when paired with Medicare.

  • Update any contact information to avoid missed notices or delayed benefits.

Staying Informed Helps You Avoid Expensive Mistakes

Missing Medicare enrollment windows or misunderstanding integration rules with PSHB can cost you:

  • Thousands in extra out-of-pocket costs

  • Irrevocable penalties

  • Loss of prescription drug coverage

Take time to learn the timelines and requirements now, so you don’t get caught off guard when your PSHB plan expects Medicare to be in place.

Prepare for the Shift in Coverage After 65

Your coverage may seem automatic, but it is not passive. Medicare requires deliberate action. PSHB requires coordination. And together, they require your attention.

Get Ahead of the Rules Before They Cost You

Turning 65 isn’t just a milestone birthday. It’s the moment where ignoring Medicare can lead to unnecessary costs, gaps in prescription drug coverage, or the loss of benefits you thought you had. Taking the right steps at the right time ensures you keep the full value of your PSHB plan, with Medicare working as a powerful cost-saving partner.

If you’re uncertain about how Medicare affects your PSHB coverage or need help understanding your responsibilities, get in touch with a licensed agent listed on this website for advice.