As an incentive to get folks to join Medicare Part B, some of the Post Office health insurance companies are offering to pay some or all of the $175/$350/month. Image: CLS Digital Arts/Shutterstock.com
By: Lacie Harmon, The Federal Benefits GroupAs you may have heard by now, major changes are coming to Post Office health insurance plans in 2025 as the result of the Postal Service Reform Act of 2022, but one part of this law, scheduled to go into effect Jan. 1, 2025, will require most future retirees to take on an additional expense in retirement, impacting their monthly finances for life.
In order to help you think about your options and plan for retirement, here are the major considerations:
1. If you will be age 64 or older by Jan. 1, 2025, the new law will not affect you.
2. For all others, if you retire on or after Jan. 1, 2025, you will now be required to take Medicare Part B when you turn 65 or retire, whichever is later, in order to keep your Post Office health insurance.
3. If you are married, your spouse will also be required to take Medicare Part B when they turn 65 or you retire, whichever is later.
4. The cost of Medicare Part B for most folks is about $175/month. So, for married couples, the cost is about $350/month this year (most years, it rises in cost a bit).
5. As an incentive to get folks to join Medicare Part B, some of the Post Office health insurance companies are offering to pay some or all of the $175/$350/month, but please note that as far as we’ve seen, these offers are not guaranteed to last indefinitely.
6. If you retire before the end of this year, you’ll still have the option of buying Medicare Part B when you turn 65 (or retire, whichever is later), but you will not be required to do so in order to keep your Post Office Health Insurance.
7. Medicare Part B consists of some coverage that you already have on your Post Office plan (i.e., doctors’ visits) but often has superior coverage on Durable Medical Equipment (i.e., wheelchairs, walkers, oxygen tanks).
8. If you or your spouse has health issues, it can be a good financial choice to add Medicare Part B because when you combine it with your Post Office plan, you’ll no longer pay co-pays or other out-of-pocket costs.
9. If you choose to decline Medicare Part B (again, only an option if you retire by the end of 2024), and you change your mind at a later date, you can join, but there will be a permanent 10% penalty applied for each year that you waited to do so.
10. If you want the flexibility to choose whether or not to take on the additional expense of Medicare Part B, and you’ve been on the fence about retiring this year, it’s a good time to get a pension estimate, to see if you’re in a financial position to do so.
Here’s the page OPM has recently released with the latest information on the new Medicare Part B law:
https://www.opm.gov/healthcare-insurance/pshb/#url=Medicare-Part-B
If you want to stay up to date via text on the new laws pertaining to this and all other upcoming Postal Service Health Benefit Plan changes, you can text “PSHB” to 39369. This is the Post Office’s PSHB text update line.
Lacie Harmon is a Federal Benefits and Retirement Specialist who helps federal employees understand and maximize their benefits, both during employment and retirement years. She teaches regularly at federal agencies and offers monthly federal retirement webinars. Past classes taught include for clients such as the FAA, USDA and GAO, as well as union locals of the APWU and NALC. Web: https://www.lacieharmon.com | Facebook | Email: LHarmon@thefederalbenefitsgroup.com
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