Postal Retirees Now Have to Rethink Medicare—and the Clock Is Ticking

Missy E
November 14, 2025

Key Takeaways

In 2025, many postal retirees must reevaluate their Medicare decisions due to the mandatory transition from FEHB to the PSHB program.
Time-sensitive requirements around Medicare Part B enrollment can significantly affect your healthcare access and costs if missed.

Understanding What Changed in 2025

If you’re a postal retiree or nearing retirement, the shift in 2025 from the Federal Employees Health Benefits (FEHB) program to the Postal Service Health Benefits (PSHB) program likely affects you directly. The transition is not just administrative; it introduces new rules regarding Medicare, especially for those who are eligible or soon to be eligible for Medicare Part B.

Starting January 1, 2025, the PSHB program officially replaces FEHB for all Postal Service employees and retirees. This change comes with a key requirement: if you’re entitled to Medicare Part A, you must also enroll in Medicare Part B to maintain full PSHB coverage. There are a few limited exceptions, but for most, this is now mandatory.

Who Must Act—and When

You need to take action if:

You are a Postal Service retiree enrolled in Medicare Part A but not in Part B.
You have a covered family member eligible for Medicare who is not yet enrolled in Part B.

The PSHB Medicare Part B requirement applies unless:

You retired on or before January 1, 2025, and were not enrolled in Medicare Part B at that time.
You or a family member live overseas.
You or a family member receive VA or Indian Health Service benefits.
You are employed and still eligible for active employee coverage.

Even if you’re currently exempt, this could change if your circumstances shift—like moving back to the U.S. or losing VA eligibility.

Why This Matters Now

Failing to enroll in Medicare Part B when required could result in losing key parts of your PSHB plan. For example, prescription drug coverage through the Medicare Part D Employer Group Waiver Plan (EGWP) is integrated into PSHB. Opting out of Part B can mean forfeiting this drug coverage.

You might also lose access to reduced cost-sharing benefits, such as:

Waived deductibles
Lower copayments
Reduced coinsurance

These benefits are only available when you’re fully enrolled in Medicare Parts A and B.

The Financial Considerations

Medicare Part B isn’t free. In 2025, the standard monthly premium is $185, and the annual deductible is $257. These amounts can be higher if your income exceeds a certain threshold.

However, some PSHB plans offer:

Partial reimbursement of the Part B premium
Lower out-of-pocket maximums for Medicare-enrolled members

So, while enrolling in Part B adds a new cost, it can also lead to substantial savings on your healthcare expenses.

Missing the initial or special enrollment period can trigger lifelong late penalties. The late enrollment penalty is 10% for each full 12-month period you were eligible for Part B but did not enroll.

Special Enrollment Period (SEP) Timeline

A Special Enrollment Period was offered from April 1 to September 30, 2024, to allow eligible postal retirees to enroll in Medicare Part B without penalties. If you didn’t act during that SEP and are now required to enroll, your options may be more limited and costly.

In 2025, any enrollment in Medicare Part B outside of the General Enrollment Period (January 1 – March 31) may involve delays in coverage starting and potential penalties.

Drug Coverage Is Now Tied to Medicare

Your PSHB prescription drug benefit is now delivered through a Medicare Part D EGWP. This means:

You must be enrolled in both Medicare Parts A and B to receive this benefit.
If you opt out of Medicare, you are also opting out of drug coverage under your PSHB plan.
Once declined, re-enrollment is limited and may only be possible during a future PSHB Open Season or with a qualifying life event.

What If You’re Still Working?

If you are an active Postal Service employee, the Part B requirement does not apply yet. You continue to receive coverage under the PSHB program without needing to enroll in Medicare until you retire.

However, planning ahead is smart. Once you retire, the clock starts ticking on your Medicare Part B enrollment obligation. Make sure you:

Review your retirement date
Evaluate your Medicare eligibility
Plan to enroll in Part B to avoid penalties and coverage gaps

Enrolling Family Members in Part B

This requirement also affects eligible family members covered under your PSHB plan. If your spouse or dependent is entitled to Medicare Part A, they must also enroll in Part B to maintain full PSHB benefits. Otherwise, the same loss of drug coverage and reduced cost-sharing will apply to them.

Start planning early, especially if they are nearing age 65. Give yourself and your family members time to:

Gather documents
Confirm Medicare eligibility
Understand enrollment periods

What Happens If You Don’t Enroll

If you or your covered family member don’t enroll in Medicare Part B when required, you may face:

Higher healthcare costs
Loss of integrated prescription drug coverage
Delayed or denied access to certain PSHB plan benefits

In some cases, your health plan may reclassify your coverage, leading to:

Increased deductibles
Higher coinsurance and copays
Full responsibility for services Medicare would otherwise cover

That’s why it’s critical to make a timely decision.

Coordinating with Other Benefits

Enrollment in Medicare Part B also affects how your benefits coordinate with:

TRICARE (for those eligible)
VA health care (where applicable)
Medicaid (for dual-eligibles)

Each program has its own rules, but generally, Medicare becomes your primary coverage once you retire. PSHB then becomes your secondary payer. This coordination can reduce your out-of-pocket expenses significantly.

Make sure to review how Medicare interacts with your other healthcare benefits before making any final decisions.

What to Do Next

If you haven’t yet reviewed your Medicare status, here are the steps to take now:

Check if you’re enrolled in Medicare Part A and B. Visit the Medicare website or review your card.
Verify whether the Part B requirement applies to you. If unsure, contact the PSHB Navigator or a licensed agent.
Review your plan’s 2025 brochure. Look for changes in deductibles, out-of-pocket maximums, and benefits for Medicare-eligible enrollees.
Evaluate the cost of enrolling in Part B. Compare that to your current and anticipated healthcare expenses.

The earlier you act, the more control you’ll have over your coverage and costs.

Staying Ahead of the Curve

The PSHB transition is one of the most significant changes to postal retiree healthcare in years. While it introduces complexity, it also presents an opportunity to make more informed, strategic choices about your health coverage.

You now have more responsibility to:

Stay informed
Track enrollment periods
Coordinate benefits

With Medicare rules tightly tied to PSHB eligibility, failing to plan ahead can have long-term consequences.

Medicare and PSHB—Timely Decisions Matter

If you’re a postal retiree, don’t underestimate how much this change can impact your retirement healthcare strategy. Deadlines, costs, and coordination rules are all evolving—and time is critical.

If you’re unsure how these changes apply to your situation, speak with a licensed agent listed on this website. Professional guidance can help you avoid penalties, preserve your benefits, and keep your retirement healthcare costs manageable.