Key Takeaways
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Failing to enroll in Medicare Part B when first eligible can significantly reduce how much your PSHB plan covers, especially after retirement.
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In 2025, PSHB rules mandate Medicare Part B enrollment for many retirees to keep full benefits, and once you miss the window, there are long-term financial consequences.
Why Medicare Part B Enrollment Matters for PSHB
If you’re a Postal Service annuitant or eligible family member, enrolling in Medicare Part B when first eligible is more than just a choice—it’s often a requirement that directly affects your Postal Service Health Benefits (PSHB) coverage.
Starting in 2025, the Office of Personnel Management (OPM) implements a rule that connects PSHB coverage with Medicare Part B enrollment for most Medicare-eligible enrollees. This requirement applies to both retirees and family members once they become eligible for Medicare.
If you skip or delay your Part B enrollment, your PSHB plan may no longer cover the full range of costs you expect. Even worse, you could find yourself responsible for medical expenses that Medicare Part B would have absorbed—and your PSHB plan won’t necessarily step in to help.
Who Must Enroll in Medicare Part B Under PSHB
You are required to enroll in Medicare Part B if you meet both of the following conditions:
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You are eligible for Medicare (generally at age 65 or earlier if you have a qualifying disability).
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You are a Postal Service annuitant or a covered family member under a PSHB plan as of January 1, 2025 or later.
Exemptions Are Limited
You are exempt from this requirement only if:
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You retired on or before January 1, 2025 and are not enrolled in Medicare Part B.
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You are an active Postal Service employee as of January 1, 2025 and have not yet retired.
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You or your covered family member reside outside the United States and its territories.
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You are receiving benefits through Indian Health Services or the Department of Veterans Affairs.
These exemptions are rare, and if you do not fall under one of them, you need to act promptly when you become eligible for Medicare.
What Happens if You Don’t Enroll in Part B
If you delay or skip enrollment in Medicare Part B, your PSHB plan may:
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Refuse to pay the full amount for services that Part B typically covers (such as doctor visits, outpatient care, and preventive services).
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Increase your out-of-pocket costs, leaving you responsible for coinsurance, deductibles, or even full charges that Medicare would have partially or fully absorbed.
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Deny prescription drug integration that is normally offered through a Medicare Part D Employer Group Waiver Plan (EGWP).
This doesn’t just result in minor billing issues—it can cause a substantial shift in your monthly and annual health expenses.
Enrollment Timelines You Must Know
To avoid late enrollment penalties and disrupted PSHB coverage, you must understand the key Medicare Part B enrollment periods.
Initial Enrollment Period (IEP)
This is the first time you can sign up for Medicare and it lasts for seven months:
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Starts three months before the month you turn 65
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Includes your birth month
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Ends three months after the month you turn 65
You must enroll in Medicare Part B during this window to avoid a late enrollment penalty and meet PSHB coordination requirements.
Special Enrollment Period (SEP) for Postal Retirees
If you were still working and covered by an employer plan when you turned 65, you qualify for a SEP when that employment ends. This period lasts for eight months after your group health coverage ends, during which you can enroll in Part B without penalty.
However, if you’re already retired or not working at the time you turn 65, this SEP does not apply.
General Enrollment Period (GEP)
If you miss both IEP and SEP, you can enroll between January 1 and March 31 each year. Coverage will start on July 1. You will likely face a late enrollment penalty and potentially delayed PSHB coordination.
How Part B and PSHB Work Together
When enrolled correctly, Medicare Part B becomes your primary coverage for medical services, and your PSHB plan becomes secondary. This means:
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Medicare Part B pays first for doctor visits, outpatient care, durable medical equipment, and preventive services.
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Your PSHB plan pays the balance, often reducing or eliminating out-of-pocket expenses.
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Many PSHB plans offer additional incentives, such as waiving deductibles or reimbursing part of the Medicare Part B premium, as long as you are enrolled.
Financial Impact of Delaying Part B
Delaying enrollment in Medicare Part B doesn’t just mean you lose coverage—it also triggers late penalties and limited windows to correct the issue. Here’s how it could affect you:
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Late Enrollment Penalty: You pay an extra 10% on your Part B premium for each full 12-month period you delayed enrollment without qualifying coverage.
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Permanent Cost Increase: This penalty lasts as long as you’re enrolled in Medicare Part B, and it’s not a one-time charge.
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Missed Coordination: Without Part B, your PSHB plan won’t act as a secondary payer and you may pay the full amount for many services.
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No Retroactive Relief: If you enroll late, Medicare doesn’t back-pay claims retroactively. PSHB also won’t reprocess claims from before your Part B coverage became effective.
Prescription Drug Coverage Risks
PSHB plans integrate with Medicare Part D using an Employer Group Waiver Plan (EGWP) model, which typically provides:
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Lower drug costs
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A $2,000 annual cap on out-of-pocket expenses in 2025
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Access to expanded pharmacy networks
But these benefits are only available if you are enrolled in Medicare Part B. Without Part B, you are automatically opted out of the EGWP prescription drug benefit—losing a key financial protection in the process.
Why You Should Act at First Eligibility
You only get one Initial Enrollment Period around your 65th birthday. If you miss it and don’t qualify for a Special Enrollment Period, your only option will be the General Enrollment Period—with all the penalties and delays that come with it.
In the context of PSHB coverage, this delay can leave you exposed to uncovered costs and a lack of drug coverage until the next coverage year begins. By enrolling when first eligible, you:
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Ensure proper coordination of benefits
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Protect access to PSHB drug coverage
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Avoid permanent late penalties
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Prevent billing complications
Steps to Enroll in Medicare Part B
To meet your PSHB requirements and maintain full benefits, here’s what you need to do:
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Check Eligibility: If you’re approaching age 65 or are otherwise eligible due to disability, confirm your Medicare eligibility through the Social Security Administration.
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Mark Your Calendar: Your Initial Enrollment Period spans seven months, starting three months before your 65th birthday.
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Apply for Part B: You can enroll online through SSA.gov, by calling Social Security, or by visiting a local office.
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Verify with PSHB: Once you’re enrolled in Medicare Part B, contact your PSHB provider to confirm coordination and access to full benefits.
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Avoid Opt-Outs: Do not opt out of the Medicare Part D EGWP portion of your PSHB plan. Doing so can result in permanent loss of prescription drug benefits through PSHB.
How to Confirm Your Exemption Status
If you believe you may be exempt from the Part B enrollment requirement, it is essential to:
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Check the date of your retirement. If you retired on or before January 1, 2025 and aren’t enrolled in Part B, you may be exempt.
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Review your employment status. If you’re still working as a Postal Service employee, the rule doesn’t apply yet.
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Look into special status (e.g., overseas resident, VA or Indian Health Services coverage).
Keep documentation to verify your exemption if challenged.
PSHB and Medicare Must Work Together—Or You’ll Pay the Price
In 2025, Medicare Part B enrollment is no longer just a smart financial choice—it’s often a required step to maintain your full PSHB benefits. Without it, you may lose access to cost-sharing protections, prescription drug coverage, and other critical plan features.
Enrolling in Part B at the right time keeps your PSHB plan functioning as intended and ensures you don’t face unnecessary financial strain. Don’t risk your benefits by assuming PSHB will fill in for Medicare—it won’t.
Take action today. If you’re unsure whether you need to enroll or want help reviewing your PSHB and Medicare options, get in touch with a licensed agent listed on this website for expert assistance.
