Key Takeaways

• In 2025, certain USPS retirees and family members must be enrolled in Medicare Part B to maintain their health benefits under the new Postal Service Health Benefits (PSHB) Program.

• Exemptions do apply, and understanding your specific status is critical to avoiding coverage interruptions or higher healthcare costs.

Understanding Medicare Part B and the PSHB Requirement

The Postal Service Health Benefits (PSHB) Program officially replaced FEHB coverage for USPS employees and annuitants starting January 1, 2025. One of the most significant changes under this program is the integration of Medicare Part B for certain retirees and their covered family members.

As a USPS retiree or employee nearing retirement, it’s essential to know whether you’re required to enroll in Medicare Part B—and what happens if you don’t.

Who Must Enroll in Medicare Part B?

You are required to enroll in Medicare Part B if:

• You are a USPS annuitant or family member who is Medicare-eligible,

• AND you turned 65 before January 1, 2025 but were not already enrolled in Part B,

• OR you turn 65 after January 1, 2025 and become eligible for Medicare,

• AND you want to maintain eligibility for PSHB coverage.

If you meet these criteria, you must be enrolled in both Medicare Part A and Part B to continue receiving full PSHB benefits.

Who Is Exempt from the Requirement?

The following groups are exempt from the mandatory Part B enrollment requirement:

• Annuitants who retired on or before January 1, 2025 and were not enrolled in Part B before that date.

• Current employees who were 64 or older as of January 1, 2025, regardless of their retirement timeline.

• Individuals living permanently overseas with no access to Medicare.

• Individuals eligible for and relying on Indian Health Services or the Department of Veterans Affairs for healthcare.

If you fall into one of these categories, you are not required to enroll in Part B to maintain PSHB coverage.

When to Enroll in Medicare Part B

Timing matters. Medicare has specific enrollment periods, and PSHB compliance depends on enrolling during the right window:

Initial Enrollment Period (IEP)

This 7-month window starts 3 months before the month you turn 65, includes your birthday month, and ends 3 months after. If you’re aging into Medicare after January 1, 2025, you must enroll in Part B during this period to avoid penalties and remain eligible for PSHB coverage.

Special Enrollment Period (SEP)

For those who delayed enrollment due to existing employer coverage, a Special Enrollment Period ran from April 1 through September 30, 2024 for eligible USPS annuitants to enroll in Part B without facing a late penalty.

General Enrollment Period (GEP)

Runs annually from January 1 through March 31. If you miss the IEP or SEP, you can enroll during the GEP, but coverage begins July 1 and late penalties may apply.

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

If you’re required to enroll in Part B and fail to do so, the consequences can be significant:

• You may lose access to prescription drug coverage under the PSHB plan, as it is integrated with Medicare Part D through an Employer Group Waiver Plan (EGWP).

• You may have limited or no access to medical benefits from your PSHB plan, depending on your plan’s terms.

• You could face late enrollment penalties from Medicare, which result in higher Part B premiums for life.

Prescription Drug Coverage Under PSHB and Part B

PSHB plans for Medicare-eligible annuitants are designed to work with Medicare Part B and include prescription drug coverage through a Medicare Part D EGWP. If you opt out of Part B, you’ll automatically forfeit this prescription coverage unless you qualify for an exemption.

In 2025, integrated benefits include:

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

• A $35 monthly insulin cost cap,

• Access to a broad pharmacy network,

• Simplified coordination of benefits between Medicare and PSHB.

Failing to enroll in Part B disrupts this entire structure.

Cost Considerations in 2025

While premiums vary based on income, the standard Medicare Part B premium for 2025 is $185 per month, with a deductible of $257. Higher-income annuitants may pay more under the Income-Related Monthly Adjustment Amount (IRMAA).

The cost of not enrolling when required, however, can be more significant:

• Loss of PSHB eligibility for full medical and drug coverage,

• Out-of-pocket expenses for services Medicare Part B would normally cover,

• A permanent 10% penalty increase for each 12-month period you delay Part B enrollment.

If You’re Still Working at USPS

If you’re actively working at USPS and covered under an employee health plan, you are not required to enroll in Part B until you retire. Once you retire, your 8-month Special Enrollment Period begins, during which you must enroll in Part B to keep PSHB coverage intact.

Remember:

• If you delay beyond the 8-month SEP after retirement, late penalties will apply.

• Your PSHB plan may reduce benefits or shift costs back to you if you’re not enrolled in Part B after retirement.

How to Verify Your Medicare and PSHB Status

You can:

• Contact the PSHB Navigator Help Line at 1-833-712-7742,

• Visit KeepingPosted.org (for annuitants),

• Or log in to LiteBlue (for current employees).

These tools help ensure you’re on track with both Medicare and PSHB requirements.

Special Situations Worth Noting

Living Abroad

If you live outside the U.S. permanently and are not eligible to use Medicare, you are not required to enroll in Part B. However, make sure you have documentation supporting your residence status.

Dual Coverage Scenarios

If you’re covered under a spouse’s health plan or a federal program like TRICARE, verify how those benefits interact with PSHB and Medicare. You may still be required to enroll in Part B if PSHB is your primary coverage.

What If You Want to Opt Out?

You may choose not to enroll in Medicare Part B, but this means:

• You could lose eligibility for PSHB coverage if you’re not exempt.

• You will not have access to the integrated Medicare Part D drug coverage under PSHB.

• You may face long-term financial penalties from Medicare.

Make sure your decision is based on a clear understanding of your eligibility and the consequences.

Why USPS Retirees Should Act Now

In 2025, the PSHB program is fully operational, and enforcement of the Medicare Part B requirement is active. Delays or mistakes in enrollment can lead to disruptions in healthcare coverage or higher out-of-pocket costs.

If you’re approaching 65, recently retired, or unsure of your enrollment status, now is the time to act. Use available USPS and Medicare resources to confirm what steps you need to take.

The Bottom Line for USPS Retirees and Employees

Understanding Medicare Part B enrollment rules is essential in 2025, especially under the PSHB program. Whether you’re approaching retirement, already retired, or managing benefits for a family member, knowing when and why to enroll in Part B protects your healthcare access and financial well-being.

If you’re uncertain, it’s wise to speak directly with a licensed agent listed on this website for personalized advice that matches your situation.