Key Takeaways

• If you’re a Postal Service retiree eligible for Medicare in 2025, skipping or misreading the rules of Medicare Part B could mean permanently higher premiums, late penalties, and reduced PSHB coverage.

• Knowing the exact timing of enrollment windows and how Medicare Part B interacts with PSHB is essential to avoid avoidable long-term costs and limited access to benefits.

Why Medicare Part B Matters to PSHB Enrollees

If you’re covered under the Postal Service Health Benefits (PSHB) Program and approaching age 65, Medicare Part B is more than just another optional program. In 2025, many PSHB plans require Medicare-eligible annuitants and their family members to enroll in Part B to maintain full coverage. Failing to do so could mean significantly higher out-of-pocket costs or even the loss of certain benefits.

Medicare Part B covers outpatient services like doctor visits, lab tests, durable medical equipment, and preventive care. While PSHB offers robust benefits, many of them coordinate with Medicare Part B to reduce cost-sharing and expand access. If you don’t enroll when you’re first eligible, PSHB may still provide some coverage, but your expenses may be much higher.

The Initial Enrollment Period (IEP): Your First Critical Deadline

When you turn 65, you enter a 7-month window called the Initial Enrollment Period (IEP):

• It starts 3 months before your 65th birthday

• Includes the month of your birthday

• Ends 3 months after your birthday month

During this window, you can enroll in Medicare Part B without penalty. If you miss it, and you’re not covered by active employment-based insurance, you might face a 10% lifetime premium penalty for each 12-month period you delay enrollment.

For Postal retirees, this can be especially costly. Unlike active employees, retirees are not considered to have “creditable coverage” for delaying Part B unless they’re enrolled in a different group health plan due to other active employment.

Special Enrollment Period (SEP) Exceptions

If you delay Medicare Part B because you or your spouse are still actively employed and covered by an employer health plan, you can use a Special Enrollment Period (SEP) later—without penalty. The SEP lasts 8 months from the end of employment or the end of the coverage, whichever comes first.

However, this SEP does not apply if you are retired and simply maintain PSHB coverage. The Office of Personnel Management (OPM) and the Centers for Medicare & Medicaid Services (CMS) both emphasize that retiree coverage is not considered creditable to delay Part B without penalty.

How Part B Affects Your PSHB Plan in 2025

Under the new PSHB rules that took effect in 2025, Medicare-eligible annuitants must enroll in Medicare Part B to retain full PSHB benefits unless they qualify for an exception. These include:

• You retired on or before January 1, 2025

• You are 64 years or older as of January 1, 2025

• You live permanently outside the U.S.

• You qualify for care through VA or Indian Health Services

If you fall outside of these exceptions and don’t enroll in Part B, your PSHB plan is allowed to adjust or reduce coverage—in some cases significantly. That could mean higher deductibles, increased coinsurance, or denied coordination of benefits.

What Happens If You Skip Part B

1. Permanent Late Enrollment Penalty: You may pay an extra 10% on your Part B premium for every full 12-month period you were eligible but didn’t enroll. This penalty lasts for as long as you have Part B.

2. Coverage Gaps in PSHB: Your PSHB plan may stop coordinating with Medicare, meaning you pay full cost for many services Medicare Part B would normally cover first.

3. Higher Out-of-Pocket Costs: Without Part B, you’re responsible for higher coinsurance, deductibles, and copayments under PSHB.

4. Missed Coordination Benefits: Many PSHB plans waive deductibles or copayments when you have both Medicare Part B and the PSHB plan. Skipping Part B eliminates these savings.

Medicare Prescription Drug Coverage and PSHB

Starting in 2025, PSHB plans automatically include prescription drug coverage for Medicare-eligible members through a Part D Employer Group Waiver Plan (EGWP). This plan includes:

• A $35 monthly insulin cap

• A $2,000 out-of-pocket maximum for the year

• Access to an expanded pharmacy network

However, enrollment in this integrated drug plan assumes you are enrolled in both Medicare Part A and Part B. Opting out of Part B could jeopardize this drug coverage as well.

When You Can Enroll After Missing Your IEP

If you miss your Initial Enrollment Period and don’t qualify for an SEP, your next chance to enroll in Part B is during the General Enrollment Period (GEP):

• Occurs annually from January 1 to March 31

• Coverage begins July 1 of the same year

Enrolling during this window means you’ll face any applicable late enrollment penalties, and you’ll have to wait months for your benefits to begin—during which you may incur full healthcare costs under PSHB.

How to Know If You’re Required to Enroll in Part B

To determine if you fall under the mandatory Part B requirement in 2025:

• Confirm your retirement date: If it’s after January 1, 2025, the rule likely applies to you.

• Check your age as of January 1, 2025: If you were under 64, the requirement likely applies.

• Review your living location: U.S. residents are expected to comply; residents abroad may be exempt.

• Review your PSHB plan materials: Each plan outlines how it coordinates benefits with or without Part B.

How Coordination of Benefits Changes With Part B

When you’re enrolled in both PSHB and Medicare Part B:

• Medicare pays first for eligible services.

• PSHB pays second, often covering the remainder or most of your cost share.

This setup significantly lowers what you owe in out-of-pocket costs.

If you don’t enroll in Part B:

• Your PSHB plan becomes primary, meaning you’ll bear higher out-of-pocket costs.

• Certain services that would have been nearly fully covered may require significant coinsurance or copayments.

How to Enroll in Medicare Part B

You can sign up:

• Online via the Social Security website

• By phone through the Social Security Administration

• In person at your local Social Security office

Make sure to gather required documents such as proof of age, employment status, and prior coverage.

Don’t Rely on Automatic Enrollment

Some people are automatically enrolled in Medicare Part A and B, especially if they’re already receiving Social Security benefits. However, if you delayed Social Security, you will likely need to proactively enroll in Medicare.

You can confirm your enrollment status by checking your mySocialSecurity account or contacting SSA directly. Waiting for an automatic notice could delay your coverage and cost you more over time.

Planning Ahead Protects Your Future

Making the right Medicare Part B decision requires understanding how it interacts with PSHB—not just in theory, but in real financial terms. Enrolling on time protects your benefits, lowers your healthcare costs, and avoids irreversible penalties.

If you’re unsure about your eligibility or enrollment timing, now is the time to seek help. Being off by even a few months could translate into thousands of dollars in lost benefits or added costs over your retirement.

Protect Your PSHB Benefits by Understanding Medicare Timing

The coordination between Medicare Part B and PSHB isn’t just a formality—it’s a critical piece of your retirement healthcare planning. Missing enrollment deadlines or misinterpreting your eligibility could mean permanent penalties and weaker coverage.

If you’re unclear on your next steps or how your personal situation aligns with the 2025 PSHB Medicare rules, speak with a licensed agent listed on this website. They can help you navigate enrollment periods, determine exceptions, and secure the benefits you deserve.