Key Takeaways

• In 2025, Medicare enrollment requirements for USPS employees and retirees have shifted due to the implementation of the Postal Service Health Benefits (PSHB) Program.

• Your eligibility for and obligation to enroll in Medicare Part B now depends on your retirement date, age, and other factors defined under PSHB rules.

The Shift from FEHB to PSHB in 2025

Until the end of 2024, you may have been enrolled in the Federal Employees Health Benefits (FEHB) Program. That changed with the arrival of the Postal Service Health Benefits (PSHB) Program, which took effect on January 1, 2025. This transition is part of the Postal Service Reform Act of 2022, which created a distinct health benefits program specifically for Postal employees, retirees, and their eligible family members.

The PSHB Program is now administered separately from FEHB, although it still follows many of the same structural guidelines. However, there are several new Medicare-related requirements unique to PSHB that affect you differently depending on your age and retirement status.

Medicare Enrollment Requirements Under PSHB

If you’re a Medicare-eligible USPS retiree or annuitant, or if you’re approaching retirement, your obligation to enroll in Medicare Part B is no longer optional in most cases. Starting in 2025, the PSHB Program requires Medicare Part B enrollment to maintain your health benefits unless you qualify for an exemption.

Who Must Enroll in Medicare Part B?

You must enroll in Medicare Part B if you meet all of the following conditions:

• You are entitled to Medicare Part A,

• You are enrolled in a PSHB plan,

• You are a USPS annuitant or family member of an annuitant,

• You become Medicare-eligible after January 1, 2025.

Exemptions from Mandatory Enrollment

You are exempt from the mandatory Part B enrollment rule if any of the following apply:

• You retired on or before January 1, 2025,

• You are an employee who is 64 or older as of January 1, 2025,

• You reside outside the United States and its territories,

• You are eligible for healthcare from the Indian Health Service, Veterans Health Administration, or another federally recognized entity.

Special Enrollment Period (SEP) for Medicare Part B

If you were already eligible for Medicare but had not enrolled in Part B prior to 2025, you were granted a Special Enrollment Period (SEP) from April 1 to September 30, 2024. This one-time SEP allowed you to sign up for Part B without facing the usual late enrollment penalties. This was a crucial opportunity because failure to act during this period could affect your future benefits under PSHB.

What Happens if You Don’t Enroll in Part B?

If you’re required to enroll in Medicare Part B and choose not to, you’ll forfeit your PSHB coverage. That means you’ll lose access to medical and prescription benefits under your plan. In addition, you may not be allowed to reenroll in the PSHB Program unless you later provide proof of Medicare Part B enrollment and qualify for a limited re-enrollment opportunity.

Integration of Medicare and PSHB

When you do enroll in Medicare Part B as required, your PSHB plan works in coordination with Medicare. Medicare typically becomes your primary payer, and your PSHB plan acts as secondary coverage. This can lower your out-of-pocket costs and improve your access to care.

Some key features of this coordination include:

• Reduced Cost Sharing: You may pay lower copayments, coinsurance, and deductibles.

• Lower Prescription Drug Costs: Your PSHB plan includes Medicare Part D drug coverage through an Employer Group Waiver Plan (EGWP).

• Enhanced Provider Access: With Medicare as your primary insurance, more providers may accept your coverage.

Understanding the Medicare Part D Integration

Prescription drug benefits under PSHB for Medicare-eligible participants are provided through a Part D EGWP. This integrated benefit brings new features:

• Out-of-Pocket Cap: A $2,000 annual limit on out-of-pocket costs for prescription drugs applies in 2025.

• Insulin Cost Cap: Insulin is capped at $35 per month.

• Expanded Pharmacy Access: You can fill prescriptions at a wider range of pharmacies nationwide.

This integration is automatic if you’re enrolled in both Medicare Part A and Part B and a PSHB plan.

Enrollment Procedures for USPS Employees and Retirees

Active Employees

If you are an active USPS employee, you continue to use the LiteBlue portal to manage your benefits. During the Open Season each November through December, you can enroll in or change your PSHB plan. Medicare enrollment is not required while you’re still working, but once you retire, the PSHB Medicare rules will apply.

Retirees and Annuitants

If you are already retired, you use the OPM portal or KeepingPosted.org to manage your PSHB plan. You must ensure your Medicare enrollment is completed timely and that your Medicare Beneficiary Identifier (MBI) is submitted to your plan.

Failure to submit your MBI may result in delays or disruption in your drug coverage or cost-sharing benefits.

Financial Impact of Enrolling in Medicare Part B

In 2025, the standard monthly premium for Medicare Part B is $185. This is a recurring cost, but when you factor in the reduced cost-sharing and enhanced benefits under PSHB, the net result may be a savings in your total annual healthcare expenses.

Additional considerations include:

• Deductibles: Medicare Part B has a $257 annual deductible.

• Cost Coordination: PSHB plans often waive or reduce their own deductibles and coinsurance if you’re enrolled in Medicare Part B.

Important Deadlines to Remember

Here are the critical timelines for 2025 and beyond:

• January 1, 2025: PSHB Program officially launched.

• April 1 to September 30, 2024: One-time Special Enrollment Period for Medicare Part B.

• November to December annually: PSHB Open Season for employees and retirees.

• Ongoing: If you become Medicare-eligible after January 1, 2025, you must enroll in Medicare Part B within your Initial Enrollment Period to retain PSHB coverage.

Tips to Stay in Compliance

To avoid disruptions in your healthcare coverage:

• Enroll in Medicare Part B as soon as you become eligible.

• Verify your MBI is submitted to your PSHB plan.

• Review your PSHB plan annually during Open Season.

• Contact OPM or LiteBlue with any address or status changes.

• Keep records of all enrollment confirmations and communications.

How the PSHB Transition Affects Your Other Benefits

Your participation in PSHB does not affect your eligibility for other federal benefits, such as:

• FEDVIP (Dental and Vision): You may still enroll separately.

• FEGLI (Life Insurance): Remains unchanged.

• FSAFEDS (Flexible Spending Accounts): Available to active employees only.

• FLTCIP (Long-Term Care): Enrollment remains suspended for new applicants as of 2025.

What This Means for Your Retirement Planning

Planning your transition to retirement now requires closer attention to Medicare timelines and PSHB rules. Whether you’re retiring soon or already receiving an annuity, aligning your Medicare enrollment with PSHB requirements is essential to avoid losing coverage.

This is especially important if you previously assumed Medicare Part B was optional. In the PSHB era, it may be required for you and your eligible family members.

Staying Covered in 2025 and Beyond

The launch of the PSHB Program has changed how your benefits align with Medicare. If you’re approaching Medicare eligibility or helping a family member through the process, understanding the new rules is vital to maintaining your coverage.

If you’re unsure about your obligations or need help evaluating your Medicare enrollment strategy, speak with a licensed agent listed on this website for professional advice.