Retired Federal Employee Health Insurance And Medicare


Do Feds Need Medicare When They Already Have Fehb

Federal Employee Retirement Health Benefits and Medicare

As we kick off Open Season 2019, one topic shaking up conversations with feds is how FEHB interacts with Medicare. While Federal Employee Health Benefits offer complete health coverage to Federal Employees who are 65 and older, are there benefits to obtaining both FEHB and Medicare?

When you combine the FEHB benefits with Medicare, the result is an otherwise bizarre arrangement with massively wasteful extra spending as Walton Francis states giving his input on the subject.

That means some beneficiaries wont find value in having both FEHB and Medicare coverage.

For most of the working class, Medicare Part A enrollment is automatic. Yet too many federal employees remain unclear and still have lingering questions about benefits.

So why should federal retirees enroll in Medicare if they have benefits through the FEHB program?

For some, coordinating these benefits together saves them money. However, this isnt the case for everyone. Retirees want a clear understanding of the relationship between the FEHB Program and Medicare.

Reasons Why You Should Enroll In Medicare Part B

The most common question we receive every Open Season from retirees and soon-to-be retirees is whether to take Part B and pay the extra premium. Given that there is a penalty if you delay Part B enrollment when you first become eligible to join, its important to make that decision before you retire.

About 70% of federal retirees enroll in Part B, which means paying two premiums and in essence two duplicative insurance programs. A portion of the retirees that join Part B might do so as a hedge against the elimination of FEHB retiree benefits. It’s possible a future Congress might consider doing so as a cost cutting measure, however unlikely that may be. But there are other more relevant reasons to join Part B such as FEHB plan options that are less expensive to join with Part B then without Part B. Here’s what you need to know if you’re going to enroll in Part B to maximize your coverage and save the most money.

Medicare Part C And Fehbs

Your options are slightly different if youre considering a Medicare Part C or Medicare Advantage plan. Medicare Advantage plans cover all the services of original Medicare and often add coverage for medications, vision care, dental care, and more.

You might not need your FEHB plan if you choose to enroll in a Medicare Advantage plan. Since a Medicare Advantage plan takes the place of original Medicare and has more coverage, your FEHB plan might not provide much additional benefit.

Depending on your FEHB plan and on the Medicare Advantage plans available to you, Medicare Advantage might be more expensive than using Part B and FEHBs together.

Additionally, many Medicare Advantage plans use networks. This could mean youd have to switch doctors and other specialists if you leave your FEHB plan for a Medicare Advantage plan.

If you choose to take a Medicare Advantage plan instead of your FEHB plan, you should suspend your FEHB plan instead of canceling. That way, youll be able to pick your FEHB plan back up in the future if your Medicare Advantage plan no longer works for you.

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Which Is Primary Coverage Medicare Or Fehb

A FEHB plan must pay first when an individual is an active federal employee or rehired annuitant. When an individual is an annuitant and is enrolled in Medicare Parts A and B and in a FEHB plan, then Medicare is primary coverage and the FEHB is secondary coverage or Medicare supplement.

FEHB premiums will not be reduced when an employee or annuitant enrolls in Medicare. Annuitants pay the same FEHB premium for the same FEHB plan as active employees. However, once Medicare becomes the primary payer of an individuals healthcare related expense, the individual may find that a lower cost FEHB plan is adequate for their needs, especially if the individual is currently enrolled in a FEHB plans high option coverage. Also, some FEHB plans waive deductibles, coinsurance, and copayments when Medicare is primary.

Since enrolling in Medicare is considered a life event, an annuitant or employee can change his or her FEHB plan to any available plan or option at any time beginning 30 days before becoming eligible for Medicare and ending 30 days after the day the individual becomes eligible for Medicare. Changes to ones FEHB plan can also be made during the annual FEHB open season.

About Insuring Your Health

Federal employee health Benefits

KHN contributing columnist Michelle Andrews writes the series Insuring Your Health, which explores health care coverage and costs.

To contact Michelle with a question or comment, .

Many readers have contacted me with questions about Medicare, which has strict coverage rules and payment provisions that can sometimes be confusing. Here are responses to two recent inquiries.

Q. I am a federal retiree. I pay almost $400 a month for coverage through the Federal Employees Health Benefits program. It would save us a lot of money if we bought a Medigap plan to supplement our Medicare coverage instead. Please tell me the pros and cons.

A. Like retired workers at some private companies, many federal retirees can keep their health-care coverage to supplement Medicare once they become eligible for Medicare at age 65.

If you enroll in Medicare Part A and Part B , that Medicare coverage becomes your primary insurance, and your federal retiree plan acts as secondary coverage for services or costs not picked up by Medicare.

With Medicare as your primary insurer, your current FEHB plan retiree plans are the same as those offered to current workers may provide more coverage than you need.

If your FEHB premium is a stretch financially, see if theres a lower-cost FEHB plan that would work more affordably as secondary coverage with Medicare, says David Lipschutz, a policy attorney with the Center for Medicare Advocacy.

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What Happens If I Decline Fehb Coverage

If you decline FEHB coverage, you would give up the subsidy the government pays toward it, which ranges from a low of about $350 for self-only coverage to $1,000 or more if youre also covering family members. If your family members are covered under FEHB, their coverage would end if you terminate yours.

Should You Enroll In Medicare Part D And Fehb

Typically, no. An FEHB prescription drug coverage may have fewer restrictions on quantity limits, prior-authorization and other things than a Part D plan.

Also, FEHB plans have a yearly limit what you have to pay in prescription drug costs, but Part D plans do not.

The exception to this is if you qualify for the Medicare Extra Help program. This program, also called the Low-Income Subsidy , is for individuals with low income. It offers lower costs than FEHB plans when used in combination with Part D.

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Enroll In Medicare When You Turn 65

As long as youre still employed, this is not a UC or Medicare requirement, since your UC medical plan will continue to be your primary coverage. Most employees do enroll in Part A since there is typically no cost. People who are receiving a Social Security benefit are automatically enrolled in Medicare Parts A and B youll need to contact Social Security if you do not want to be enrolled. If youre in the UC Health Savings Plan, you should not enroll in Medicare, since the IRS does not allow Medicare enrollees to have a Health Savings Account. This rule applies to any Medicare-eligible enrolled family members as well.

Ninety days before your 65th birthday, RASC will send you a letter with information about enrolling in Medicare. Remember, you and/or your spouse can hold off on enrolling in Medicare as long as youre working just be sure to enroll when you retire. However, domestic partners are usually not eligible to defer enrollment into Part B without incurring late enrollment penalties. These individuals are advised to contact Social Security three months before turning age 65 to inquire about Part B enrollment options and whether late enrollment penalties apply if enrollment is deferred.

To keep your UC-sponsored coverage, youll need to pay your Medicare Part B premiums without interruption and on time to maintain your Medicare enrollment. Depending on your income you may need to pay an additional premium for Part D as well.

  • Resources

How Does Medicare Work For Federal Employees

FEHB and Medicare | Do I Need Both as a Retired Federal Employee?

Medicare is a program backed by the federal government that supplies health insurance benefits to people over age 65 and people with certain disabilities. While all citizens are entitled to this benefit, some people have additional choices. Federal employees have their own benefit program called the Federal Employees Health Benefits program. This program offers a wide variety of plans for federal workers, their spouses and their children up to age 26.

While the exact costs depend on the plan you choose, most people enrolled in the FEHB pay about 30% of their premium while their employer pays 70%. Many federal workers can carry this plan into retirement, allowing them the option to forego Medicare coverage. However, you can still sign up for Medicare with the FEHB and doing so may be beneficial.

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Medicare Has Four Parts:

  • Part D . There is a monthly premium for Part D coverage. Most Federal employees do not need to enroll in the Medicare drug program, since all Federal Employees Health Benefits Program plans will have prescription drug benefits that are at least equal to the standard Medicare prescription drug coverage. Still, you may want to be aware of the benefits Medicare is offering, so you can help others make informed decisions. If you have limited savings and a low income, you may be eligible for Medicare’s Low-Income Benefits. For people with limited income and resources, extra help in paying for a Medicare prescription drug plan is available. Information regarding this program is available through the Social Security Administration . For more information about this extra help, visit SSA online at, or call them at 1-800-772-1213 .

Is Medicare Advantage Better Than Fehb

Most MA plans are similar to FEHB plans in hospital and medical benefits, but the benefits of prescription drugs will not be as good as in the FEHB program because the plans have a coverage gap where you are responsible for all or most drug costs until you reach a catastrophic limit.

Is Medicare Advantage a federal health care program?

Medicare is a federal health insurance program regulated by the Centers for Medicare and Medicaid Services .

Is Medicare Advantage creditable coverage?

Medicare Advantage plans must offer benefits at least as comprehensive as Medicare Parts A and B. Thats why all Medicare Advantage plans have creditable coverage.

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Fehb And Medicare Part C Enrollment

To enroll in Medicare Part C, you must enroll in Part A and B coverage. FEHB benefits are likely to continue.

Because Medicare Advantage Plans offer similar benefits to the FEHB program, for many, theres no need to enroll in a Part C plan.

However, individuals may suspend their FEHB benefits if they choose to enroll in a Medicare Part C plan. Before the suspension of benefits, the retirement system requires beneficiaries to show their coverage documentation at the time of enrollment.

Life happens and some circumstances require the change or adjustment of benefits. Say a beneficiary loses or cancels their Part C policy they may re-enroll in the FEHB program.

The reason why a person no longer has an Advantage Plan determines when they can re-enroll. Beneficiaries may re-apply for FEHB benefits for up to 60 days after the loss of an Advantage Plan.

This example is only for beneficiaries that lost a policy due to the plan leaving an area or if a person moves out of their plans service area.

FEHB Re-Enrollment Period

On the other hand, simply canceling a plan for personal reasons may delay the re-enrollment process until the next Open Season.

The FEHB Open Season typically runs from Nov. 12 through Dec. 10 annually benefits start Jan. 1 the following year. This is the re-enrollment period for otherwise ineligible beneficiaries.

Current federal employees have two new nationwide FEHB plans to consider this fall during the FEHB Open Season.

How Can You Add Family Members

FEGLI Checkup Reminder

As long as you are eligible and have met your requirements, you can add a new spouse or a child after you have retired at any time because of a life change event. You may also switch your type of plan from a Self Only to a Self and Family plan during a Federal Benefits Open Season. An FBOS typically runs from early November to mid-December of a given year.

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Federal Retiree Weighs Whether To Keep Fehb Or Switch To Medigap

By Michelle AndrewsOctober 8, 2012

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How Much Does Fehb Cost Per Month

The monthly maximum government contribution is $530.53 for Self Only, $1,136.70 for Self Plus One, and $1,243.95 for Self and Family.

Why is FEHB so expensive?

There are a number of reasons why having FEHB is so rare and valuable. First, few employers offer comparable coverage. This means that if you pay $400 per month in FEHB premiums, the total premium cost will be approximately $1,400 per month. It would cost a lot more than that to find comparable coverage on your own.

Do you pay for FEHB?

You must pay both the government and the employee share of the costs. Premium conversion is a method of reducing your taxable income by the amount of your FEHB insurance premium.

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How Do I Get My $144 Back From Medicare

You must be enrolled in a Medicare Advantage Plan To enroll in a Medicare Advantage Plan, you must be enrolled in or eligible for both Medicare Part A and B. To receive the Medicare refund benefit, you must enroll in a plan that offers to pay your Part B monthly premium.

What is Medicare gift back?

What is the Give Back Benefit in Medicare? The refund benefit is another term for Part B premium reduction. This is when a Medicare Advantage plan reduces the amount you pay for your monthly Part B premium.

Who is eligible for Medicare reimbursement?

Only the member or a qualifying survivor/resident partner enrolled in Part A and B is eligible for Medicare Part B premium reimbursement.

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Understanding FEHB and Medicare

You can change your FEHB plan 30 days before you become eligible for Medicare, as well as during the annual open season that runs this year from Nov. 12 through Dec. 10.

If you opt for the private market, Medigap supplemental plans fill in some of the gaps in Medicare benefits and cover some of beneficiaries out-of-pocket costs, such as the Part A and B deductibles, coinsurance and co-payments. They are sold under 10 standard benefit packages that have differing coverage levels.

As you consider what to do, its important to factor in your own health-care needs and carefully evaluate the services provided by different plans.

For example, In some cases, Ive found that a retirees FEHB plan doesnt cover the same length of stay at a skilled nursing facility as some Medigap plans, says Casey Schwarz, client services counsel at the Medicare Rights Center.

If youre considering switching to a Medigap plan, its also important to make sure you understand the rules in your state, says Schwarz. Some states allow people to sign up only during specified enrollment periods, for example, or impose a waiting period before the plans cover care related to a preexisting condition.

A. There is no easy solution to your situation. Assuming youre retired and receiving Social Security benefits, you were probably automatically enrolled in Medicare Parts A and B when you turned 65.

Whether to maintain Part B coverage now even if you cant use it depends on your health and your future plans.

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Federal Employee Retirement Health Benefits And Medicare

Home / FAQs / General Medicare / Federal Employee Retirement Health Benefits and Medicare

Before you retire, its important to explore all your health care coverage options. For those in the Federal Employee Health Benefits Program who are also Medicare-eligible, this can be a bit tricky. Thats why were here to help you understand how to coordinate your coverage when youre eligible for FEHB and Medicare!

Fehb And Medicare Parts C & D

Federal employees should definitely enroll in Medicare Parts A & B according to Brian. However, when it comes to Medicare Advantage, Brian recommends declining that coverage and sticking with your FEHB instead. Typically the FEHB has more benefits and greater coverage than Medicare part C. Finally, most FEHB plans also cover prescription drugs, so you should not need to enroll in Medicare Part D. However, you may want to double check that your FEHB plan does cover the prescription drugs you need before declining Medicare Part D. If you decide you want Medicare Part D, you can add Medicare Part D during a future open enrollment period but may face a penalty in the form of an increased premium. Furthermore, you can only add Part D during the open season.

So, in summary, most federal employees should:

  • Keep FEHB coverage
  • Enroll in Medicare Parts A & B when they are eligible

If you want to go deep into the weeds on this topic, OPM published a 20 page book that walks you through the decision making process. Be warned that it is extremely dry reading.

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