(a) Enrollment in FEHB plan terminates prior to the initial PSHB contract year. For individuals who are eligible to enroll under this subpart pursuant to § 890.1603(a), enrollment in an FEHB plan and coverage of the enrollee and covered family members under that FEHB plan will terminate at the end of the contract year preceding the initial contract year. Coverage under a FEHB plan will remain available for an eligible family member who is or becomes covered as a member of family of a FEHB plan enrollee who is not eligible for a PSHB plan pursuant to § 890.1603(a)(1) or (2). Individuals whose coverage is terminated under this paragraph (a) are not eligible for temporary continuation of coverage under subpart K of this part pursuant to § 890.1103(b).

(b) Disenrollment and removal from enrollment: Postal Service Medicare covered annuitants and Medicare covered members of family not enrolled in Medicare Part B. (1) Unless the individual qualifies for an exception under § 890.1604(c), a Postal Service Medicare covered annuitant may be disenrolled and a Medicare covered member of family may be removed from PSHB coverage if not enrolled in Medicare Part B either:

(i) By the end of their Medicare initial enrollment period or applicable Medicare special enrollment period; or,

(ii) Any time after January 1, 2025, that the PSHB Carrier, the Postal Service, or OPM determines that the individual was required to be enrolled but has not enrolled in Medicare Part B.

(2) A Postal Service Medicare covered annuitant will not be disenrolled and a Medicare covered member of family will not be removed from PSHB coverage in a case where that individual was not informed of their obligation to enroll in Medicare Part B, or it would be against equity and good conscience to remove the individual. In such a case, that individual will be permitted to stay enrolled in or covered by PSHB if they enroll in Medicare during their next enrollment opportunity, such as the next Medicare general enrollment period.

(3) A Postal Service Medicare covered annuitant will not be disenrolled and a Medicare covered member of family will not be removed from PSHB coverage due to not being enrolled in Medicare Part B if such individual qualifies for one of the exceptions in § 890.1604(c).

(4) A Postal Service Medicare covered annuitant may not be disenrolled if they have suspended PSHB enrollment while enrolled in a Medicare-sponsored plan under section 1833, 1876, or 1851 of the Social Security Act as described in § 890.304(d)(2).

(5) Disenrollment of a Postal Service Medicare covered annuitant from a PSHB plan under this section shall be considered a termination with entitlement of the enrollee and PSHB covered family members to a 31-day temporary extension of coverage and the right of conversion under § 890.401.

(c) Ineligibility under this subpart. The PSHB Carrier, Postal Service, other applicable employing offices, or OPM, as appropriate, may take action to disenroll ineligible individuals from enrollment or remove covered members of family from an enrollment pursuant to § 890.308.

(d) Removal due to fraud or misrepresentation. Pursuant to § 890.308(e)(3) and (f)(3), fraud or intentional misrepresentation of the fact of non-enrollment in, or disenrollment from, Medicare Part B may be grounds for retroactive disenrollment and removal to the date of loss of eligibility.

(e) Cancellation of PSHB in writing to the Postal Service due to lack of Medicare coverage. As required by 5 U.S.C. 8903c(g)(3)(D), the Postal Service Medicare covered annuitant or a Medicare covered member of family may cancel coverage under this subpart in writing to the Postal Service because the individuals choose not to enroll in or to disenroll from Medicare Part B. In such a case, PSHB enrollment or coverage under this subpart will be cancelled as described in paragraphs (e)(1) through (4) of this section.

(1) The cancellation of a Postal Service Medicare covered annuitant's PSHB plan enrollment—

(i) Is effective as of the last day of the last pay period in which the Postal Service Medicare covered annuitant was enrolled in Medicare Part B, or the last day of the last pay period before the individual became a Postal Service Medicare covered annuitant; and

(ii) Cancels the PSHB plan coverage of any family members covered under a self plus one or self and family enrollment, subject to applicable provisions at § 890.1609.

(2) The cancellation of a Medicare covered member of family's PSHB plan coverage is effective the last day in which the Medicare covered family member was enrolled in Medicare Part B, or the last day before the individual became eligible for Medicare but did not enroll.

(3) When writing to notify the Postal Service that a Medicare covered member of family will not enroll in or will disenroll from Medicare Part B, the Postal Service Medicare covered annuitant may elect to decrease their PSHB plan enrollment type as described in § 890.306(e).

(4) Cancellation of PSHB enrollment or coverage under this paragraph (e) shall be treated as a termination and an enrollee or covered family member whose enrollment or coverage is canceled is entitled to a 31-day temporary extension of coverage and right of conversion in accordance with § 890.401.

(f) Temporary extension of coverage and conversion. A Postal Service employee, Postal Service annuitant, or their covered family member whose enrollment or coverage is terminated other than by cancellation of the enrollment or discontinuance of the plan, in whole or part, is entitled to a 31-day temporary extension of coverage and right of conversion in accordance with § 890.401.