Key Takeaways

• Your age, retirement status, and Medicare enrollment significantly affect your eligibility and requirements under the Postal Service Health Benefits (PSHB) Program in 2025.

• Failing to understand how these factors work together may result in a loss of coverage, higher costs, or required action that could otherwise be avoided.

Understanding PSHB Eligibility in 2025

The Postal Service Health Benefits (PSHB) Program officially replaced the Federal Employees Health Benefits (FEHB) Program for USPS workers and retirees starting January 1, 2025. While the transition may appear seamless on the surface, eligibility under PSHB is far from automatic. One of the most complex areas involves how age, Medicare enrollment, and retirement status interact.

Age Isn’t Just a Number in PSHB

Your age determines more than just whether you’re retired or not—it dictates your Medicare responsibilities, plan coordination, and enrollment timelines under PSHB.

Age 64 and Under

If you’re a current USPS employee or retiree under age 65, PSHB coverage functions similarly to how FEHB used to work. You’re not yet required to enroll in Medicare Part B, and PSHB will serve as your primary coverage. However, age-based rules still apply:

• If you’re actively working, you remain eligible for PSHB without needing Medicare.

• If you retire before age 65, you can maintain PSHB coverage, but you must plan ahead for Medicare integration when you reach 65.

Turning 65 in 2025

If you turn 65 in 2025, you must prepare for a significant eligibility rule:

• You will be required to enroll in Medicare Part B to remain eligible for continued drug coverage and full PSHB benefits, unless you qualify for one of the program’s limited exemptions.

• This enrollment should happen during your 7-month Initial Enrollment Period (IEP): 3 months before your 65th birthday, the month of, and 3 months after.

• Missing this window may lead to late enrollment penalties and loss of critical PSHB-integrated benefits.

Age 65 and Older

If you’re already 65 or older in 2025, the rules split depending on your employment and retirement status:

• If you’re retired and eligible for Medicare: You must be enrolled in Medicare Part B to maintain your PSHB plan. If you’re not, your prescription drug benefits under the PSHB plan will be lost.

• If you’re still working at USPS, even after age 65: You are not required to enroll in Medicare Part B until you retire. PSHB coverage will remain your primary insurance until then.

Medicare Enrollment Isn’t Optional in Most Cases

Starting in 2025, Medicare Part B becomes a required layer of coverage for most USPS retirees and their family members who are eligible for Medicare. This is a major shift from previous FEHB rules.

Mandatory Medicare Part B Enrollment

You are required to enroll in Medicare Part B if:

• You are a Postal Service annuitant (retiree) and you become eligible for Medicare on or after January 1, 2025.

• You are a covered family member of a Medicare-eligible annuitant.

Failing to enroll in Medicare Part B will trigger the following consequences:

• You will lose prescription drug coverage under the PSHB plan.

• You may not qualify for cost-saving features, such as waived deductibles and reduced copayments, that only apply if you’re enrolled in both PSHB and Medicare Part B.

Who Is Exempt from the Requirement?

Certain individuals are exempt from the Medicare Part B requirement:

• Retirees who began receiving an annuity on or before January 1, 2025.

• Employees who are age 64 or older as of January 1, 2025, and are not yet retired.

• Individuals who reside outside the United States.

• Beneficiaries of Veterans Affairs (VA) or Indian Health Services (IHS) who qualify under special coverage rules.

Retirement Timing Affects Your Responsibilities

Whether you are currently retired or planning to retire this year directly affects what actions you must take.

Already Retired Before 2025

If you retired before January 1, 2025, your obligations depend on:

• Whether you are enrolled in Medicare Part B.

• Whether you fall under the exemption group based on retirement date.

In most cases, retirees from before 2025 are not required to enroll in Medicare Part B to keep PSHB coverage. However, not enrolling may mean you pay more out of pocket, especially for drug coverage and cost-sharing.

Retiring in 2025 or Later

If you retire in 2025 or any future year, the rules are stricter:

• You will be required to enroll in Medicare Part B as soon as you become eligible, usually at age 65.

• Failure to do so may result in immediate loss of access to PSHB prescription drug benefits.

• The requirement also applies to any Medicare-eligible family member on your PSHB plan.

Timing Matters: Enrollment Windows and Coordination Periods

Failing to enroll on time can impact your coverage and finances. Here are the timeframes you should mark on your calendar:

• Initial Enrollment Period (IEP): This 7-month window around your 65th birthday is your best opportunity to enroll in Medicare Part B without a late penalty.

• General Enrollment Period (GEP): Runs from January 1 to March 31 each year. If you miss your IEP, you can use the GEP, but coverage won’t begin until July, and penalties may apply.

• PSHB Special Enrollment Period (SEP): A one-time opportunity in 2024 was provided to allow eligible annuitants to enroll in Medicare Part B without penalty. That SEP is no longer available in 2025.

How Medicare Works With PSHB in 2025

Once you are enrolled in both PSHB and Medicare, the programs coordinate to enhance your benefits. Here’s how they typically work together:

• Medicare Part A (usually premium-free): Pays first for inpatient care.

• Medicare Part B (requires monthly premium): Pays first for outpatient and medical services.

• PSHB Plan: Pays secondary and may cover what Medicare does not, including cost-sharing like deductibles, coinsurance, and copayments.

• Prescription Drug Coverage: Provided through a Part D Employer Group Waiver Plan (EGWP), but only if you are enrolled in Medicare Part B. This is automatic and comes with PSHB.

What Happens If You Miss a Requirement?

Unfortunately, there is little flexibility once a requirement is missed:

• If you don’t enroll in Medicare Part B when required, you lose drug coverage under PSHB.

• If you try to enroll later, you may face late penalties for Medicare Part B—an extra 10% for every 12-month period you delayed enrollment.

• If you’re not eligible for an exemption and you miss the Medicare requirement, you may be forced to pay out-of-pocket for services PSHB otherwise would have helped cover.

Don’t Assume You’re Automatically Covered

PSHB coverage does not automatically adjust to your Medicare or retirement status. You are responsible for taking the right steps at the right time. That includes:

• Understanding your Medicare eligibility based on age.

• Knowing whether you fall into the group required to enroll in Medicare Part B.

• Taking action within the correct enrollment periods.

• Staying informed about how your retirement timing interacts with PSHB requirements.

Where Age, Medicare, and Retirement Intersect Most Critically

The most common trouble points occur when these three factors overlap without proper action:

• A retiree turning 65 in 2025 but failing to enroll in Medicare Part B.

• An employee aged 65+ retiring in 2025 who doesn’t immediately apply for Medicare.

• A spouse or dependent eligible for Medicare but not enrolled in Part B, leading to loss of family drug coverage.

Take Control of Your Eligibility Status Now

You can’t afford to be passive about your PSHB eligibility in 2025. Age, Medicare, and retirement status are deeply intertwined, and missteps are costly. Reviewing your timeline, understanding your requirements, and confirming your enrollment status are essential. If you’re uncertain about where you stand—or what to do next—get in touch with a licensed agent listed on this website for personalized guidance.