Key Takeaways

• The most important Medicare-related decisions for PSHB enrollees often happen months or even years before you reach eligibility, especially if you’re nearing retirement.

• Misunderstanding enrollment periods, Medicare Part B requirements, and how your PSHB plan interacts with Medicare can cost you thousands in penalties or uncovered medical expenses.

Planning Ahead Isn’t Optional—It’s Essential

If you’re a Postal Service employee or annuitant, the launch of the Postal Service Health Benefits (PSHB) Program in 2025 means you’re working within a new system that tightly integrates with Medicare. Unlike the older FEHB system, PSHB mandates Medicare Part B enrollment for many eligible annuitants and family members.

You may think you’ll make decisions when you’re ready to retire, or when you turn 65. But if you wait until then, you’re already behind.

Understanding Medicare’s structure, timelines, and how it fits into your PSHB plan can prevent missed deadlines, surprise costs, and even the loss of drug coverage.

When Medicare Decisions Begin—Not When You Turn 65

For most Postal Service annuitants, the critical planning window starts years before Medicare eligibility. In 2025, Medicare eligibility generally begins at age 65. But what matters more is when you need to act.

Medicare Initial Enrollment Period (IEP)

• Starts: 3 months before you turn 65

• Ends: 3 months after you turn 65

• Total duration: 7 months

If you miss this window without qualifying coverage, you may face late enrollment penalties for Part B—and under PSHB, that could affect your entire health coverage.

Special Enrollment Period for Part B (2024 Only)

In 2024, a Special Enrollment Period (SEP) was offered from April 1 to September 30. This SEP allowed Medicare-eligible Postal Service annuitants and eligible family members to sign up for Part B without a late penalty. That period is now over, and anyone newly eligible must follow the standard IEP or General Enrollment Period rules.

General Enrollment Period (GEP)

• Dates: January 1 – March 31 each year

• Coverage starts: July 1 of the same year

Missing your IEP means you’ll likely have to use this window, but coverage delays and penalties are real consequences.

If You’re a Current Employee Nearing Retirement

You don’t need Medicare while you’re still actively employed and covered under PSHB through your job. But as you plan for retirement, timing your Medicare enrollment correctly becomes crucial.

Here are a few key checkpoints:

• Start thinking about Medicare Part B by age 63.5: This gives you time to understand how it integrates with PSHB.

• Decide by age 64.5: You need to apply 3 months before turning 65 to avoid any gaps.

• If you plan to retire before 65: Your Part B enrollment decisions must be coordinated with when your employment coverage ends.

If You’re Already Retired or About to Be

The PSHB system requires most Medicare-eligible annuitants and Medicare-eligible family members to enroll in Medicare Part B to keep full PSHB coverage.

There are only a few exceptions:

• You retired on or before January 1, 2025, and you’re not already enrolled in Medicare Part B.

• You or your covered family member is a resident overseas.

• You are covered through Indian Health Services or Veterans Affairs.

If you don’t meet one of these exceptions and don’t enroll in Medicare Part B, you may lose access to full PSHB benefits, including integrated prescription drug coverage.

Why Part B Matters More Than You Think

For PSHB enrollees, enrolling in Medicare Part B is no longer just a smart financial decision—it’s often a requirement. Here’s why:

• Plans coordinate with Medicare: PSHB plans generally offer reduced out-of-pocket costs, waived deductibles, and lower copayments if you have Medicare Part B.

• Prescription coverage is tied to it: You will be auto-enrolled into a Medicare Part D Employer Group Waiver Plan (EGWP) for prescriptions if you have Medicare.

• Opting out of Part B can mean higher costs: If you opt out, your PSHB plan may cover less or charge higher cost-sharing.

Prescription Drug Coverage: What Changes in 2025

Starting in 2025, PSHB includes integrated prescription drug coverage for Medicare-eligible annuitants via a Part D EGWP.

• Annual out-of-pocket cap: $2,000 for prescription drugs

• Insulin cost: Capped at $35 per month

• Expanded network: Broader access to in-network pharmacies

But this only applies if you’re enrolled in both your PSHB plan and Medicare Part B. Opting out removes this benefit.

Key Timelines That Affect Your Coverage and Costs

Age 64.5

• Begin Medicare Part B application process to ensure on-time coverage

Age 65

• IEP begins; you must enroll in Part B to maintain full PSHB benefits (if eligible)

January 1 – March 31

• GEP available if you missed IEP; coverage starts in July with possible late penalty

Every November – December

• PSHB Open Season allows you to review and change plans if needed

PSHB and Medicare: What Happens If You Delay

If you delay enrolling in Medicare Part B:

• You may be disenrolled from certain PSHB benefits

• Prescription coverage through EGWP may be lost

• You may pay a lifetime late enrollment penalty for Part B

• You’ll likely face higher out-of-pocket healthcare costs

The ripple effects of delay are real and costly.

Coordinating Coverage Between PSHB and Medicare

Once you’re enrolled in both PSHB and Medicare:

• Medicare becomes primary

• PSHB becomes secondary

• This dual coverage typically means less out-of-pocket spending

Some PSHB plans even offer reimbursement for some or all of your Medicare Part B premium, although details vary by plan.

Coverage for Family Members: Don’t Overlook This

If your spouse or other covered dependent is Medicare-eligible, the same rules apply. They must also enroll in Medicare Part B to keep full PSHB benefits. The responsibility to enroll lies with each individual, so don’t assume your enrollment automatically covers them.

Coordination mistakes here can lead to uncovered claims.

Annual PSHB Enrollment Period Still Matters

While Medicare enrollment is tied to age and eligibility, PSHB Open Season happens every year from November to December. During this window, you can:

• Compare available PSHB plans

• Switch to a plan that better coordinates with your Medicare benefits

• Add or remove eligible family members from coverage

Even if you’re satisfied with your current plan, reviewing options annually helps you adjust for any cost changes or benefit adjustments.

Decisions Now Determine Financial Security Later

Waiting until 65 to understand Medicare is like cramming for a test the night before—except the consequences could be thousands of dollars in penalties, uncovered costs, or canceled coverage.

To protect your health and your wallet, you should:

• Review your PSHB plan’s Medicare coordination rules

• Monitor your approaching Medicare eligibility

• Enroll in Medicare Part B during your IEP (or earlier if planning an early retirement)

• Reassess your plan during every PSHB Open Season

Your Next Step: Talk to a Licensed Agent

Your PSHB plan and Medicare benefits are connected in more ways than most realize. If you make the right decisions early—before you’re 65—you’ll step into retirement with fewer surprises, smoother coverage, and lower costs.

If you’re unsure about what steps to take or how your situation fits into the rules, now is the time to talk to a licensed agent listed on this website. They can help you understand what’s required, what’s optional, and what choices give you the most value moving forward.