Understanding FEHB and Medicare: Do I Really Need Both

If you're a federal employee or retiree, you're likely familiar with the Federal Employees Health Benefits (FEHB) program. It's a comprehensive health insurance plan that offers a wide range of coverage options.

FEHB plans are designed to cover medical expenses, including doctor visits, hospital stays, and prescriptions. In fact, FEHB plans are required to cover essential health benefits, such as maternity care, mental health services, and substance abuse treatment.

But what about Medicare? As a federal employee or retiree, you might be wondering if you need both FEHB and Medicare. The answer depends on your age and employment status.

The Federal Employee Health Benefits Program (FEHB) is an excellent health insurance option for federal employees and their families. You can keep your FEHB plan and enroll in Medicare, both Part A and Part B, without losing your FEHB coverage.

You have several options when it comes to coordinating your FEHB and Medicare coverage, including keeping your FEHB plan and only enrolling in Medicare Part A or Part B, or suspending your FEHB and enrolling in Medicare with a Medicare Advantage plan. However, it's essential to consider the costs and benefits of each option.

If you're still employed, Medicare considers your FEHB plan as creditable coverage, which means you won't incur a Medicare Part B late enrollment penalty if you delay enrolling in Part B until you retire. But, if you're retired, your FEHB coverage is no longer considered creditable, and you'll need to enroll in Medicare Part B within 8 months of your employment ending.

Here are the options to consider:

To make an informed decision, calculate your potential costs and benefits, including the premiums for Medicare Part B and the copays for outpatient services on your FEHB plan. By considering these factors, you can determine whether enrolling in Medicare Part B will save you money or increase your expenses.

If you're enrolled in the Federal Employee Health Benefits Program (FEHB) and have questions about Medicare, don't worry, you're not alone. You can call the number above to speak with a team of licensed insurance agents who can help answer your questions and explain your options.

Exploring Medicare plan options in your area is also a great way to get started. You can fill out the online rate form, which is 100% free to use with no obligation to enroll in any of the plans you view.

To understand your options, it's essential to know how Medicare and FEHB interact. If you're eligible for both, Medicare rules determine whether Medicare or FEHB is primary in any given scenario.

Here's a key point to keep in mind: if Medicare is primary, Medicare will automatically transfer claims information to your FEHB plan once your claim is processed. You generally don't need to file a claim with both.

To help you visualize this process, consider the following:

You'll also receive an Explanation of Benefits (EOB) from your FEHB plan and a Medicare Summary Notice (MSN) from Medicare.

If you're a retiree with Medicare, you may want to consider a FEHB plan with lower costs.

You can change your FEHB plan annually during the Open Season, which takes place from November 15th to December 31st.

Some FEHB plans provide coverage for services that Medicare doesn't cover, such as dental.

If you have Medicare as your primary payer, some FEHB plans waive deductibles, copayments, and coinsurance.

This can be a big relief, especially if you're on a fixed income.

If you're enrolled in a Federal Employee Health Benefits (FEHB) plan and are wondering if you should also enroll in Medicare, it's essential to understand how FEHB and Medicare work together.

If you're still employed, your FEHB plan is considered creditable coverage by Medicare, and you won't incur a Medicare Part B late enrollment penalty if you delay enrolling in Medicare until you retire.

Here are some key points to consider:

To decide whether to pick up Medicare Part B, calculate your potential costs and compare them to your current FEHB plan copays. If you'd pay more in Medicare premiums, it might be cheaper to stick with FEHB. However, if your FEHB copays are higher than your potential Medicare premiums, it's worth considering enrolling in Medicare Part B.

In some cases, having both FEHB and Medicare can provide more comprehensive coverage, especially for services like durable medical equipment, home health care, and prosthetic devices.

FEHB plans can offer incentives that reduce your premium and out-of-pocket expenses when combined with Medicare. This is a significant factor to consider when deciding whether to enroll in Medicare Part B.

Around 25% of eligible retirees choose not to enroll in Part B, which may be due to the cost of premiums. The cost of your Part B premium is based on your tax return income from two years ago.

The extra charge added to Medicare premiums, known as an IRMAA, can increase your premium costs. This charge is typically assessed if your income is above a certain threshold.

A late enrollment penalty can also add to your premium costs. This penalty is permanent and cumulative, meaning that if you delay enrollment for 36 months, the penalty will add a permanent 30% fee to your standard premium.

Here are some key points to consider when deciding on Part B coverage:

The cost of Medicare Part B premiums can be a significant factor in your decision, but it's essential to weigh this against the potential cost savings offered by FEHB plans.

If you have other health coverage, such as TRICARE or CHAMPVA, it can affect how your FEHB and Medicare coverage work together. For annuitants, Medicare pays first for Medicare-covered services, then FEHB, and finally TRICARE.

TRICARE requires you to enroll in Medicare Part A and Part B at 65 to keep your coverage. You should check with your TRICARE or CHAMPVA Health Benefits Advisor for more information.

Medicaid is another program that can interact with your FEHB and Medicare coverage. As an active employee, your FEHB coverage is primary, then Medicare, and Medicaid pays last. If you're an annuitant, Medicare pays first, then FEHB, and then Medicaid. You can suspend your FEHB coverage and avoid paying the premium while you have Medicaid, but be sure to check your state's Medicaid eligibility rules to learn if you must enroll in Medicare to continue receiving Medicaid benefits.

TRICARE is a health insurance program for military members, retirees, and their families. It's a vital benefit for those who have served in the military.

As a retired military member, you may have TRICARE and Medicare coverage. In this case, your FEHB coverage as a spouse of a federal employee would be primary, then Medicare, and finally TRICARE. This means that your FEHB coverage would be the first stop for your health insurance claims, followed by Medicare, and then TRICARE would be the secondary coverage.

TRICARE is designed to provide comprehensive coverage for military families, including medical, dental, and pharmacy benefits. It's a valuable resource for those who have served in the military and their loved ones.

If you're a federal employee or annuitant with multiple health coverage options, it's essential to understand how they interact with each other.

Medicare pays first for Medicare-covered services, then FEHB, and then TRICARE for annuitants. If you have questions about these programs, see your TRICARE or CHAMPVA Health Benefits Advisor.

TRICARE requires you to enroll in Medicare Part A and Part B when you turn 65 to keep your coverage.

Medicaid is a federal and state program that assists low-income individuals in paying for healthcare. You may have Medicaid, Medicare, and FEHB coverage.

As an active employee, your FEHB coverage is primary, then Medicare, and Medicaid pays last. If you're an annuitant, Medicare pays first, then FEHB, and then Medicaid.

You can suspend your FEHB coverage and avoid paying the FEHB premium while you have Medicaid as an annuitant.