Key Takeaways

• If you are eligible for both PSHB and Medicare Advantage in 2025, failing to understand how they interact can result in coverage gaps or higher out-of-pocket costs.

• Coordinating your PSHB benefits with Medicare properly can help you avoid paying for duplicate coverage or missing important supplemental benefits.

Understanding the Overlap Between PSHB and Medicare

As a postal retiree or current employee approaching retirement, the launch of the Postal Service Health Benefits (PSHB) Program in 2025 marks a major shift in your healthcare coverage. If you are also eligible for Medicare, particularly Medicare Advantage, it’s critical to know how these programs overlap. Missteps can lead to unnecessary expenses or a lapse in essential benefits.

While PSHB plans are tailored to work with Medicare, especially Part B, the interaction with Medicare Advantage (Part C) adds complexity. Unlike Original Medicare, Medicare Advantage plans are offered by private companies and may include additional benefits. However, enrolling in both PSHB and a Medicare Advantage plan without a clear strategy can create unintended consequences.

What PSHB Covers and How It Coordinates with Medicare

PSHB is the new health insurance program for Postal Service employees, retirees, and their families, replacing FEHB for postal workers. It closely mirrors the federal health benefits structure but includes mandatory Medicare Part B enrollment for certain retirees.

PSHB-Medicare Coordination at a Glance

• Medicare Part A: Generally premium-free if you worked at least 40 quarters; PSHB plans work alongside Part A without conflict.

• Medicare Part B: Required if you are a Medicare-eligible retiree and not exempt; PSHB is designed to complement it.

• Medicare Part D: PSHB integrates drug coverage through a Part D Employer Group Waiver Plan (EGWP).

• Medicare Advantage (Part C): Optional private plan that combines Parts A, B, and sometimes D. Overlapping it with PSHB can be problematic.

1. Medicare Advantage and PSHB Don’t Replace Each Other

One common misconception is that Medicare Advantage and PSHB are interchangeable. They are not. Medicare Advantage plans are an alternative to Original Medicare, while PSHB is a separate employer-sponsored health benefit. If you enroll in a Medicare Advantage plan, you are essentially replacing your Medicare Parts A and B with a bundled private plan.

However, PSHB still remains active if you don’t cancel it, and premiums continue to be deducted. This can lead to:

• Duplicate coverage: You may pay for overlapping benefits.

• Network confusion: Medicare Advantage plans often have restricted provider networks, while PSHB may offer wider options.

• Claims processing issues: Providers may bill incorrectly if they’re unsure which plan is primary.

2. You Could Lose Out on PSHB Medicare Incentives

Many PSHB plans offer incentives for retirees enrolled in Medicare Part B, such as:

• Reduced copayments

• Waived deductibles

• Premium reimbursements (varies by plan)

If you enroll in Medicare Advantage instead of remaining with Original Medicare, you may lose access to these incentives. That’s because the PSHB plan integrates with Parts A and B, not with Medicare Advantage plans.

For 2025, these incentives are built into many PSHB options specifically for those coordinating with Original Medicare. Missing out could mean higher healthcare costs overall.

3. Dual Enrollment Can Increase Administrative Burden

Having both PSHB and a Medicare Advantage plan means you will need to:

• Manage two separate sets of benefits

• Understand two different provider networks

• Coordinate prior authorizations, referrals, and claims across both systems

In the event of a serious illness or hospitalization, this complexity could lead to delays in care or unexpected billing errors. Simplifying your coverage can help avoid this burden.

4. PSHB Plans Include Prescription Drug Coverage

Starting in 2025, PSHB plans provide prescription drug coverage through Medicare Part D via EGWP. If you enroll in a standalone Medicare Advantage plan that includes drug coverage, you are essentially paying for two sources of drug coverage.

Medicare does not allow enrollment in both an EGWP Part D and a standalone Part D plan. If you attempt to enroll in both, one will be automatically canceled—usually the PSHB-integrated plan. This could mean:

• Disruption in medication access

• Higher drug costs

• Complicated re-enrollment if you later change your mind

5. Enrollment Timing Matters

The PSHB Program has its own Open Season, typically from November to December. This overlaps with Medicare’s Annual Enrollment Period, which also runs from October 15 to December 7. You’ll need to make careful choices during this time to ensure your coverage choices work together.

Important dates to remember in 2025:

• Medicare Annual Enrollment Period: October 15 – December 7

• PSHB Open Season: November to December (exact dates vary)

• Coverage Effective Date: January 1, 2026, for changes made during Open Season

Use this window to evaluate all your options and speak to a licensed agent if you’re unsure about your selections.

6. Exemptions and Special Rules Apply

Not every retiree is required to enroll in Medicare Part B for PSHB eligibility. You may be exempt if:

• You retired on or before January 1, 2025

• You turned 64 or older as of January 1, 2025

• You live abroad permanently

• You qualify for health coverage through Veterans Affairs or Indian Health Services

If you meet an exemption and choose not to enroll in Medicare, then PSHB acts as your primary insurer. However, if you are not exempt and fail to enroll in Part B, you risk losing your PSHB coverage entirely.

Be aware that these rules do not apply to Medicare Advantage. Whether or not you’re exempt, enrolling in a Medicare Advantage plan can still complicate your PSHB benefits.

7. Reassessing Your Choices Each Year Is Critical

Each year, both Medicare and PSHB plans can change:

• Premiums

• Deductibles

• Coverage rules

• Available provider networks

You must reassess your healthcare needs annually. Do not assume last year’s decision will still be the best fit. Review your Annual Notice of Change from Medicare and any new PSHB plan brochures thoroughly.

PSHB participants should also watch for updates regarding Part D drug coverage, which may affect medication availability and costs.

8. Speak with a Licensed Agent Before Making Changes

Deciding between keeping PSHB with Original Medicare or enrolling in Medicare Advantage is not just about benefits. It’s also about:

• Access to providers

• Travel or out-of-state coverage

• Managing long-term chronic conditions

The best decision depends on your personal health profile, financial situation, and future plans. A licensed agent listed on this website can help you evaluate all available options and avoid costly mistakes.

Make PSHB and Medicare Work Together, Not Against Each Other

The interaction between the Postal Service Health Benefits Program and Medicare can be complex—especially if you are also considering Medicare Advantage. Overlooking the implications of dual enrollment may lead to unnecessary costs, administrative challenges, or even disruption in your care.

To make the most of your PSHB benefits in 2025 and beyond:

• Learn how Medicare Parts A, B, and D integrate with your PSHB plan.

• Avoid Medicare Advantage enrollment unless you are certain it aligns with your needs.

• Review changes annually during the fall enrollment period.

• Get help from a licensed insurance agent listed on this website to make informed, confident decisions.