Key Takeaways

  • Signing up for Medicare at the right time can enhance your PSHB benefits and reduce your out-of-pocket costs, but missteps in timing may lead to coverage gaps or penalties.

  • Understanding the Special Enrollment Period, initial eligibility windows, and Medicare coordination rules is essential if you want your PSHB plan to work seamlessly alongside Medicare.

Understanding the PSHB and Medicare Relationship

The Postal Service Health Benefits (PSHB) Program is now active in 2025, and it is distinct from the Federal Employees Health Benefits (FEHB) Program you may have relied on in the past. One of the biggest changes involves how PSHB works with Medicare once you become eligible, particularly for Parts A and B.

If you are approaching age 65 or are already Medicare-eligible, it is important to understand how to time your Medicare enrollment to avoid gaps, unnecessary premiums, or loss of benefits. The new PSHB system integrates with Medicare, but that integration depends on meeting certain deadlines.

Who Needs to Enroll in Medicare Part B Under PSHB?

Beginning in 2025, many Postal Service annuitants and family members must enroll in Medicare Part B to maintain full PSHB benefits. Specifically, the requirement applies to:

  • Annuitants and eligible family members who are entitled to Medicare Part A and are turning 65 in 2025 or later

  • Anyone becoming newly eligible for Medicare due to disability in 2025 or after

Exemptions from the Part B Requirement

You are exempt from this requirement if:

  • You retired on or before January 1, 2025

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

  • You are living overseas

  • You receive healthcare through Indian Health Services or the Department of Veterans Affairs

If you qualify for an exemption, you can keep your PSHB coverage without enrolling in Medicare Part B. However, combining PSHB with Medicare can still offer cost-sharing advantages worth considering.

When to Enroll in Medicare: Understanding the Timelines

Medicare enrollment isn’t automatic for everyone. Missing the proper windows can result in penalties or delayed coverage. Here are the key timeframes you need to be aware of:

Initial Enrollment Period (IEP)

This is your first opportunity to enroll in Medicare. It spans seven months:

  • Begins three months before your 65th birthday month

  • Includes the month of your birthday

  • Ends three months after your birthday month

Enrolling during the first three months ensures your coverage starts on the first day of your birthday month. Delaying enrollment could push your Medicare start date back and impact your PSHB plan.

Special Enrollment Period (SEP) for PSHB Members

Because of the new integration requirements, there was a Special Enrollment Period (SEP) in 2024, running from April 1 to September 30, 2024, for eligible annuitants and family members who previously did not enroll in Part B. This SEP allowed those affected by the new PSHB rules to enroll in Medicare Part B without penalty.

If you missed that SEP, you now fall under standard Medicare rules, and the timing becomes more sensitive.

General Enrollment Period (GEP)

If you miss your IEP and don’t qualify for an SEP, you’ll need to wait until the General Enrollment Period, which runs January 1 to March 31 each year. Coverage begins in July of the same year, and late enrollment penalties may apply.

Avoiding the GEP is ideal, as the gap in coverage and financial penalties can affect both your Medicare and PSHB coordination.

Coordinating PSHB With Medicare: Why Timing Matters

If you’re required to have Medicare Part B and don’t enroll on time, your PSHB plan will not cover the full cost of services that Medicare Part B would have paid. That could leave you with high out-of-pocket costs.

When you enroll in Medicare on time and remain eligible, PSHB plans coordinate benefits with Medicare in the following way:

  • Medicare is primary for Medicare-covered services

  • PSHB is secondary, covering many of the out-of-pocket costs Medicare does not

This coordination typically results in:

  • Reduced deductibles and coinsurance

  • Lower copayments for doctor visits, hospital care, and outpatient services

  • Minimal out-of-pocket drug expenses if you remain in the PSHB prescription plan (through the EGWP structure)

But this only happens if you’re enrolled in Medicare at the right time. Otherwise, PSHB will not function as expected.

What Happens if You Delay Medicare Enrollment?

Failing to enroll in Medicare Part B when required can trigger two serious outcomes:

  • Late Enrollment Penalty: A lifelong monthly surcharge added to your Part B premium. The penalty is calculated at 10% for each full 12-month period you delayed enrollment beyond your IEP.

  • Reduced PSHB Benefits: If you’re supposed to be enrolled in Part B and you’re not, PSHB plans will act as if you are, and you’ll have to pay the portion that Medicare would have covered.

This can turn into thousands of dollars in surprise medical bills, especially for outpatient care, diagnostic tests, or specialist visits.

How Prescription Drug Coverage Works With Medicare

In 2025, PSHB prescription drug benefits for Medicare enrollees are offered through an Employer Group Waiver Plan (EGWP) that complies with Medicare Part D standards.

Key features include:

  • Automatic enrollment for PSHB members who are also enrolled in Medicare Parts A and B

  • $2,000 annual cap on out-of-pocket prescription drug costs

  • $35 monthly insulin cap

  • Access to a broad pharmacy network

If you opt out of the EGWP coverage, your PSHB plan will not offer an alternative drug plan, and you may not be able to rejoin unless you qualify for a new Special Enrollment Period.

Again, timing is everything. You must be enrolled in both Medicare Part A and B for the prescription drug benefit to activate under PSHB.

If You’re Still Working After Age 65

Some Postal Service employees continue working beyond age 65. If that applies to you, your timeline changes slightly.

  • While actively employed, you can delay Medicare Part B without penalty, as long as you have credible coverage through your PSHB plan as an employee.

  • When you retire, you get an 8-month Special Enrollment Period to sign up for Medicare Part B without facing late penalties.

However, if you delay retirement until after 2025 and you’re not grandfathered in under the exemption rules, you’ll likely need to enroll in Part B at retirement to retain full PSHB benefits.

Key Points to Check During Open Season

Every year, from November to December, PSHB holds an Open Season where you can:

  • Review available PSHB plan options

  • Switch to a new PSHB plan

  • Confirm that your Medicare integration is active and accurate

This is an ideal time to ensure that your Medicare enrollment is on file with OPM and your plan provider, especially if you enrolled recently or made changes.

Missing Open Season does not cancel your PSHB coverage, but you may have to wait until the next year to adjust your plan.

How to Ensure Your PSHB and Medicare Work Together Smoothly

To avoid costly mistakes, follow these best practices:

  • Start Medicare planning at age 64: Know your IEP dates and request your Medicare card early

  • Enroll in both Medicare Part A and B before your PSHB plan requires it

  • Verify your Medicare enrollment with OPM, your PSHB provider, and SSA

  • Keep track of exemptions if you’re still working or retired before 2025

  • Use Open Season each year to reevaluate your PSHB plan and ensure Medicare coordination remains active

If you’re unsure, contact a licensed agent who understands both PSHB and Medicare. The integration rules are complex, and even small timing errors can result in major financial impact.

Get Ahead of the Medicare and PSHB Timelines

Medicare and PSHB can work together to provide comprehensive and affordable coverage, but the system is not automatic. You must be proactive with enrollment dates, coordination rules, and annual plan reviews to make the most of your benefits.

Failing to enroll in Medicare Part B on time can reduce your PSHB benefits and expose you to penalties or excessive out-of-pocket costs. Meanwhile, timely Medicare enrollment can trigger reduced cost sharing, prescription drug caps, and waived deductibles across many PSHB plans.

If you’re turning 65 soon or newly eligible for Medicare, don’t wait. Begin reviewing your timeline today and reach out to a licensed agent listed on this website for guidance tailored to your situation.