Key Takeaways

  • If you’re a USPS retiree living abroad, you’re not required to enroll in Medicare Part B to keep your PSHB coverage in 2025, provided you meet specific exemption criteria.

  • Your eligibility for prescription drug benefits and other PSHB services can be limited if you live outside the U.S. and choose to opt out of Medicare Part B.

Understanding the PSHB Program in 2025

In 2025, the new Postal Service Health Benefits (PSHB) Program replaces FEHB for USPS retirees and employees. If you retired from the United States Postal Service or plan to retire soon, you are now enrolled—or will be enrolled—in a PSHB plan instead of the traditional FEHB system.

This change affects how your health coverage works with Medicare, especially if you’re Medicare-eligible and live outside the United States. The rules are different for overseas retirees, so understanding your responsibilities and options is essential.

Medicare and PSHB: What’s New in 2025

Under the PSHB Program, some retirees and family members must enroll in Medicare Part B when eligible to maintain full PSHB coverage. However, overseas retirees are handled a bit differently. Here’s what’s changing this year:

  • PSHB integrates more closely with Medicare.

  • Medicare Part B enrollment is generally mandatory when you turn 65—unless you meet an exemption.

  • Living overseas qualifies you for an exemption under certain conditions.

Who Is Exempt from Mandatory Medicare Part B Enrollment?

If you are a USPS annuitant or covered family member and reside outside the United States, you may be exempt from the Medicare Part B requirement for PSHB in 2025. But this exemption is not automatic for all retirees abroad.

You are exempt if:

  • You retired on or before January 1, 2025, and were not enrolled in Medicare Part B at that time.

  • You are currently residing overseas, and your primary residence is outside the United States.

  • You are eligible for care through the Department of Veterans Affairs (VA) or Indian Health Services (IHS) (in some cases).

You will not lose PSHB eligibility if you qualify under any of the above. But there are consequences worth understanding if you skip Medicare Part B.

The Impact of Opting Out of Medicare Part B

If you’re living overseas and choose not to enroll in Medicare Part B because you’re exempt, your PSHB plan will still provide some benefits. However, some key limitations apply:

  • You will not receive Medicare-integrated benefits, such as waived deductibles or lower cost-sharing.

  • Your access to Medicare Part D prescription drug benefits will be restricted or unavailable.

  • You may be responsible for higher out-of-pocket costs for services that would normally be covered under Medicare.

Although Medicare Part A is typically premium-free, Part B requires monthly premiums. This cost may seem unnecessary if you live abroad and can’t use Medicare easily, but skipping it could reduce your coverage value if you return to the U.S.

What Happens If You Move Back to the U.S.?

You might be living abroad now, but plans change. If you return to the United States after skipping Medicare Part B, your situation becomes more complex:

  • You may face a late enrollment penalty for Medicare Part B, which increases the longer you delay.

  • You may have to wait for the General Enrollment Period (January 1 to March 31) to sign up, with coverage starting July 1.

  • Your PSHB plan may not provide full benefits until you are actively enrolled in Medicare Part B.

So if you foresee a possible return to the U.S., you may want to enroll in Medicare Part B anyway, even if you’re exempt now.

Special Enrollment Considerations for Overseas Retirees

If you previously waived Medicare Part B and later return to the U.S., you could qualify for a Special Enrollment Period (SEP) if certain criteria are met:

  • You must have been living abroad when you turned 65.

  • You must apply for Medicare Part B within eight months of returning to the U.S.

  • You must not have had employer group health coverage during your time overseas.

Failing to enroll during this SEP may leave you facing lifetime late penalties or delays in coverage.

Prescription Drug Coverage and the Overseas Exception

In 2025, PSHB plans include Medicare Part D coverage for prescription drugs via an Employer Group Waiver Plan (EGWP). This feature is great for domestic enrollees but doesn’t always work overseas:

  • EGWP Part D coverage generally does not apply outside the U.S.

  • If you decline this drug coverage, you may be locked out of re-enrollment unless you experience a qualifying event.

  • Non-Medicare retirees may still receive prescription benefits through PSHB, but coverage varies.

If you’re overseas, be sure to evaluate your need for ongoing prescription drug access and make arrangements accordingly.

Maintaining PSHB Coverage Without Medicare

So what does your PSHB coverage look like without Medicare if you’re living abroad? While each plan varies, here’s a general idea:

  • You retain basic medical coverage for eligible services.

  • You may have higher cost-sharing because Medicare isn’t paying primary.

  • Preventive care and chronic disease management services may not be as comprehensive.

It’s critical to compare plan brochures and check whether your PSHB plan offers international coverage or reimbursement options for care outside the U.S.

Enrollment Tips for Overseas USPS Retirees in 2025

Here are a few practical steps you should consider this year:

  • Review your PSHB plan to ensure it meets your healthcare needs abroad.

  • Document your primary residence if you plan to claim a Medicare Part B exemption.

  • Track your travel plans in case you return to the U.S. and need to enroll in Medicare Part B.

  • Check for VA or IHS eligibility if you qualify for additional exemptions.

  • Review your prescription needs and whether your plan offers alternatives for overseas delivery or reimbursements.

Timing and Deadlines You Should Know

Staying on top of timelines is key. Here’s what to mark on your calendar in 2025:

  • Open Season: Usually held from November to December, this is when you can change your PSHB plan.

  • Medicare General Enrollment: January 1 to March 31 for those who missed their Initial Enrollment Period.

  • Special Enrollment Period (SEP): Eight months from the date you return to the U.S. if you had been living abroad.

Deadlines matter. Missing them can mean higher costs or gaps in coverage.

Can You Use Medicare Overseas If You Enroll Anyway?

Even if you choose to enroll in Medicare Part B while living abroad, keep in mind that Medicare generally does not pay for services outside the U.S.

Here’s what this means:

  • You’ll still pay premiums, but you can’t use Medicare services unless you return to U.S. soil.

  • Some emergency care exceptions apply in rare cases (e.g., while traveling through Canada to Alaska), but these are limited.

  • Your PSHB plan, not Medicare, will be the primary payer for foreign care.

How to Decide If Medicare Part B Is Right for You Overseas

There’s no one-size-fits-all answer. Here’s how to think it through:

  • If you never plan to return to the U.S., enrolling in Part B may not be worth the cost.

  • If you may move back in a few years, enrolling now could save you from future penalties.

  • If you want full PSHB benefits with lower cost-sharing, enrolling in Part B (when required) is essential.

Weigh your future plans, budget, and health needs before making a final decision.

Staying Informed Is Key

The PSHB Program is still new in 2025, and additional guidance may emerge throughout the year. USPS retirees overseas should stay alert to communications from OPM and check the latest PSHB updates.

You can also:

  • Sign up for email updates through OPM or KeepingPosted.org.

  • Call the PSHB Navigator Help Line if you have questions about your specific status.

  • Speak with a licensed agent for help understanding your options.

Making Smart Coverage Decisions Abroad

Living abroad as a USPS retiree means your healthcare choices look different than those of stateside retirees. PSHB coverage gives you a solid foundation, but Medicare adds another layer of complexity.

Make sure you understand your exemption status, your overseas coverage options, and what happens if you return to the U.S. later. Planning ahead can help you avoid unexpected costs and lapses in care.

If you need help understanding how your situation affects your benefits, speak with a licensed agent listed on this website for professional advice.