Key Takeaways

• Your enrollment in Medicare directly affects how your PSHB benefits work, especially once you reach age 65 or become otherwise eligible.

• Missing the appropriate Medicare enrollment window can lead to higher out-of-pocket costs, delayed coverage, and possible loss of important PSHB benefits.

Understanding the Relationship Between Medicare and PSHB

The Postal Service Health Benefits (PSHB) Program is now the primary health coverage option for U.S. Postal Service employees and annuitants. If you’re retired or nearing retirement, you may already know that Medicare becomes a major piece of your healthcare picture at age 65. What you may not realize is that PSHB and Medicare are designed to work together—and the timing of your Medicare enrollment can significantly influence the value of your PSHB coverage.

As of 2025, PSHB plans coordinate directly with Medicare Part A (hospital insurance) and Medicare Part B (medical insurance). Once you’re eligible for Medicare, you must understand how these parts integrate with PSHB to avoid unnecessary coverage gaps or expenses.

Medicare Part A: Automatic but Still Important

Most people qualify for premium-free Medicare Part A if they or their spouse paid Medicare taxes for at least 10 years. Enrollment in Part A typically happens automatically at age 65 if you’re receiving Social Security. If not, you can enroll manually within your Initial Enrollment Period (IEP), which is the 7-month window that starts three months before you turn 65.

For PSHB enrollees, Medicare Part A acts as your primary coverage for inpatient hospital stays. Your PSHB plan becomes secondary for these services. This coordination can lower your out-of-pocket expenses for inpatient care, skilled nursing, and hospice.

Medicare Part B: Where Timing Really Matters

Unlike Part A, Medicare Part B requires a monthly premium. More importantly, PSHB treats Part B enrollment as a condition for receiving full coordination benefits. If you fail to enroll in Part B when you’re first eligible, you may not only face penalties from Medicare but also reduced cost-sharing benefits from your PSHB plan.

The timing is crucial. The Initial Enrollment Period (IEP) lasts 7 months—from 3 months before to 3 months after your 65th birthday month. If you miss this window, you’ll have to wait for the General Enrollment Period (GEP), which runs from January 1 to March 31 each year. Coverage then starts the following July 1. This delay can result in a gap in cost-sharing coordination with PSHB.

What Happens If You Delay Part B?

Delaying enrollment in Medicare Part B can create both financial and coverage risks:

• Permanent late enrollment penalties: You may pay a higher monthly premium for life.

• Loss of PSHB coordination: Some PSHB plans may reduce their contribution toward outpatient services or require higher coinsurance if you lack Part B.

• Gaps in coverage: If you need medical care between the end of your IEP and the beginning of your GEP-based coverage, you’ll be on the hook for higher out-of-pocket costs.

Medicare Enrollment Is Mandatory for Many PSHB Annuitants

As of 2025, if you are a Medicare-eligible Postal Service annuitant or a family member covered under your PSHB plan, you are generally required to enroll in Medicare Part B to maintain full PSHB benefits. However, there are some exceptions:

• You retired on or before January 1, 2025, and are not currently enrolled in Medicare Part B.

• You were an active Postal employee aged 64 or older as of January 1, 2025.

• You live abroad or receive healthcare from the Department of Veterans Affairs or Indian Health Services.

If you meet any of these exceptions, you are not obligated to enroll in Part B, though you may still do so if you choose.

Medicare and Prescription Drug Coverage Under PSHB

Once you enroll in Medicare, your prescription drug coverage under PSHB changes too. PSHB plans automatically integrate a Medicare Part D Employer Group Waiver Plan (EGWP) for eligible enrollees. This means:

• You receive Medicare-standard drug benefits through your PSHB plan.

• You benefit from the $2,000 annual out-of-pocket cap introduced in 2025.

• You are protected from the high costs of name-brand or specialty medications.

This drug coverage is automatic if you have Medicare and PSHB. If you opt out of the integrated Part D coverage, you may lose your drug benefits under PSHB and may not be able to re-enroll.

Why Medicare Plus PSHB Offers Better Value

When you enroll in both Medicare Parts A and B, your PSHB plan typically reduces or eliminates many out-of-pocket expenses:

• Lower deductibles: Some PSHB plans waive the annual deductible for Medicare-enrolled members.

• Reduced coinsurance and copayments: Your out-of-pocket share drops significantly when Medicare pays first.

• Broader provider access: Medicare expands your access to doctors and hospitals nationwide.

This enhanced coordination makes healthcare more affordable and predictable in retirement. But again, it hinges on timely Medicare enrollment.

Special Enrollment Periods: Avoiding Gaps If You Work Past 65

If you continue working past age 65, you may delay enrolling in Medicare Part B without penalty as long as you’re covered under a group health plan from active employment. When your employment ends, you are granted an 8-month Special Enrollment Period (SEP) to enroll in Medicare Part B. This SEP begins the month after employment ends or the group health plan ends, whichever comes first.

Failing to enroll during this SEP could expose you to late penalties and PSHB coordination issues. If you’re retiring in 2025, you should plan your Part B enrollment to coincide with your retirement date to maintain uninterrupted benefits.

Coordination of Benefits: Who Pays First?

Understanding who pays first can help you manage expectations and costs. Here’s how it works when you have both Medicare and PSHB:

• If you are retired and enrolled in Medicare: Medicare pays first. PSHB pays second.

• If you are working and covered by PSHB: PSHB pays first. Medicare pays second.

This order determines how much you’ll pay out of pocket. Always notify both Medicare and your PSHB plan about your employment status and coverage to ensure proper claims processing.

How to Enroll in Medicare

If you’re nearing age 65 or about to retire, here are the steps you need to follow:

1. Check your eligibility: Most people are eligible for Medicare at age 65.

2. Apply online: Visit the official Medicare website or contact Social Security.

3. Enroll on time: Apply during your IEP or Special Enrollment Period to avoid penalties.

4. Notify PSHB: Ensure your plan is aware of your Medicare enrollment to coordinate benefits effectively.

Keep records of your enrollment confirmation to prevent administrative issues down the line.

PSHB Communications You Shouldn’t Ignore

If you’re a current or future PSHB enrollee, watch for specific notices:

• Medicare Integration Letters: Mailed before your 65th birthday.

• Annual PSHB Plan Brochures: Released during Open Season from November to December.

• Special Enrollment Notifications: If you’re eligible for a time-limited enrollment opportunity.

Ignoring these notices could cost you financially or delay critical coverage.

Planning for Retirement and Healthcare Together

Health coverage decisions should be part of your overall retirement planning. Don’t treat Medicare enrollment as an afterthought. The PSHB system expects proactive coordination, and failing to plan can result in:

• Higher premiums

• Delayed access to care

• Limited pharmacy networks

• Loss of cost-sharing benefits

If you’re unsure about your timeline or your eligibility, consult a licensed agent listed on this website. They can help you make informed decisions based on your retirement date and PSHB plan.

Your Enrollment Choices Define Your Health Coverage

The coordination between Medicare and PSHB benefits can work in your favor—but only if you enroll in Medicare at the right time. Delays, missteps, or assumptions can lead to coverage gaps, higher costs, and reduced benefits under your PSHB plan. Plan your enrollment strategy carefully, particularly if you are turning 65 or retiring in 2025.

If you want to get the most from your PSHB benefits, take action early. Reach out to a licensed agent listed on this website for help reviewing your Medicare eligibility and aligning it with your PSHB plan.