Key Takeaways

• The combination of Medicare and PSHB requires precise coordination to avoid duplicate coverage or coverage gaps that could leave you financially exposed.

• In 2025, certain Medicare-eligible Postal Service annuitants are required to enroll in Medicare Part B to maintain PSHB benefits. Failing to do so can lead to limited or lost coverage.

Why Coordination Matters in 2025

As a Postal Service annuitant or employee, your health coverage options changed significantly beginning in 2025. With the implementation of the Postal Service Health Benefits (PSHB) Program, you’re no longer simply choosing a plan under the Federal Employees Health Benefits (FEHB) umbrella. Instead, you’re navigating a new structure that is tightly linked with Medicare.

This transition has brought new rules, new deadlines, and a new level of importance to coordinating your PSHB plan with Medicare—particularly Parts A and B. If you miss a requirement or make the wrong assumption, the result may not just be inconvenience. It could mean reduced coverage, higher out-of-pocket expenses, or even complete denial of certain claims.

Understanding Your Dual Coverage Landscape

If you’re age 65 or older and eligible for Medicare, you may now be in the position of having both Medicare and a PSHB plan. In theory, this offers you more robust coverage. But in practice, it only works well if both systems are aligned.

Primary vs. Secondary Payers

In this combined structure:

• Medicare is your primary payer once you enroll.

• Your PSHB plan becomes your secondary payer.

This means Medicare pays first for most services, and your PSHB plan pays some or all of what remains.

If you don’t enroll in Medicare Part B when required, your PSHB plan assumes you have it and may reduce its benefits accordingly. You’ll then be left paying what Medicare Part B would have covered—potentially thousands each year.

Who Must Enroll in Medicare Part B in 2025

The Office of Personnel Management (OPM) has made it clear: if you meet the following criteria, you must enroll in Medicare Part B to keep full PSHB coverage.

You are required to enroll in Medicare Part B if:

• You are a Postal Service annuitant (retiree or survivor) who becomes Medicare-eligible on or after January 1, 2025.

• You are a Medicare-eligible family member of someone who falls into the category above.

This rule applies even if you had FEHB coverage in the past without Medicare Part B. The PSHB system does not automatically honor those same arrangements.

Exemptions from Mandatory Enrollment

You may be exempt from enrolling in Medicare Part B if:

• You retired on or before January 1, 2025, and you were already Medicare-eligible.

• You are age 64 or older as of January 1, 2025, and not yet enrolled in Medicare.

• You reside permanently outside the United States.

• You receive medical benefits from the VA or the Indian Health Service.

Even if exempt, enrolling in Medicare Part B could still offer you significant cost-sharing advantages.

How Lack of Coordination Leads to Gaps in Coverage

When Medicare and PSHB plans are not aligned, various forms of coverage gaps can emerge. Here are some of the most common situations:

Missed Enrollment Windows

Medicare has strict enrollment periods:

• Initial Enrollment Period (IEP): Begins 3 months before your 65th birthday and ends 3 months after.

• General Enrollment Period (GEP): January 1 to March 31 each year, with coverage starting July 1.

• Special Enrollment Period (SEP): Offered under limited conditions, such as loss of employer coverage.

Failing to enroll during your IEP can lead to lifelong penalties and a delay in coverage that leaves you temporarily exposed.

PSHB Assumes You Have Medicare Part B

If you do not enroll in Part B when required, but your PSHB plan operates under the assumption that you did, it may deny claims or cover only a fraction of your medical expenses.

For example:

• Your plan may cover 20% of outpatient services, assuming Medicare already paid 80%.

• If Medicare wasn’t active, that 80% becomes your responsibility.

Prescription Drug Coverage Needs Attention Too

As of 2025, most PSHB plans offer integrated Medicare Part D prescription coverage for Medicare-eligible enrollees through an Employer Group Waiver Plan (EGWP). This replaces the standalone prescription benefit your PSHB plan would otherwise offer.

What You Need to Know

• Enrollment in this EGWP is automatic if you’re enrolled in both PSHB and Medicare.

• You can opt out, but doing so means forfeiting your PSHB drug coverage.

• If you later change your mind, re-enrollment may not be guaranteed.

To maintain consistent access to medication coverage, do not opt out of the Medicare Part D component unless you have a compelling reason and a confirmed alternative.

The Risk of Duplicate Coverage

Some Medicare-eligible retirees mistakenly enroll in both a PSHB plan and a Medicare Advantage (Part C) plan. While Medicare Advantage may sound like it enhances your benefits, it often causes overlap or outright conflict.

What Can Go Wrong

• Medicare Advantage plans replace Original Medicare, changing the way coordination works.

• PSHB plans are designed to work with Original Medicare, not private Medicare Advantage plans.

• You may be forced to pay out-of-pocket for services not covered by your Medicare Advantage plan but assumed to be covered by your PSHB plan.

In short, dual enrollment in PSHB and Medicare Advantage can lead to billing confusion and reduced benefits unless coordinated extremely carefully.

How to Prepare for a Smooth Experience

Coordination doesn’t happen automatically. Here’s how you can take control of your PSHB and Medicare coverage.

1. Know When to Enroll

Use your 65th birthday and retirement date to guide your timeline:

• If you’re retiring after age 65, enroll in Medicare before your retirement date.

• If you’re retiring at or before age 65, enroll during your Initial Enrollment Period.

Mark your calendar and don’t wait for a notice. Missing Medicare deadlines can create irreversible coverage gaps and late enrollment penalties.

2. Verify Your Plan’s Medicare Integration

Before enrolling in a PSHB plan, confirm whether:

• It offers reduced deductibles or coinsurance for Medicare-enrolled members.

• It includes a Medicare Part D EGWP.

• It requires coordination steps you must initiate (like submitting your Medicare Beneficiary Identifier).

This helps ensure you select a plan that truly integrates with your Medicare benefits.

3. Don’t Assume You’re Exempt

You may think prior FEHB rules apply—but they don’t. The PSHB program introduces a new legal framework. If you became Medicare-eligible after January 1, 2025, you likely fall under the mandatory enrollment category unless you meet a specific exemption.

Review your eligibility status with OPM or a licensed agent to avoid costly missteps.

Timing and Communication Are Everything

Much of the confusion and risk around Medicare and PSHB coordination stems from timing errors and missed communications. Here are a few common pain points to address early:

• Delayed Social Security enrollment can delay Medicare Part B.

• Not informing your PSHB plan of your Medicare enrollment can lead to incorrect claim processing.

• Mismatched addresses between Medicare and your PSHB plan can delay drug benefit activation.

Take the initiative to confirm every element of your coverage is active, aligned, and current.

Keeping Your Coverage Tight and Aligned

This isn’t a one-time decision—it’s an ongoing responsibility. Even once enrolled, you should periodically review your plan details to make sure:

• Your Medicare and PSHB plan are correctly linked.

• Your PSHB plan reflects your Medicare Part B enrollment.

• You haven’t accidentally triggered coordination issues by enrolling in private plans or making midyear changes.

Annual reviews—especially before or during the November to December Open Season—can save you from unexpected coverage disruptions.

Solid Planning Prevents Costly Surprises

The PSHB program offers valuable health benefits for retirees and their families—but only if paired correctly with Medicare. If you’re not aware of the shifting coordination rules or ignore the Medicare Part B requirement in 2025, the results can be harsh. That’s why it’s essential to understand:

• When Medicare is required

• How it coordinates with your PSHB plan

• What steps you must take to avoid unintended expenses or denied claims

If you have questions about your enrollment requirements or how to coordinate your coverage, speak with a licensed agent listed on this website who understands the PSHB system inside and out. The right guidance can make all the difference.