Fehb Plans for Retirees: A Comprehensive Guide

As a retiree, you're likely eligible for FEHB plans, which offer a wide range of health insurance options. FEHB plans are administered by the Office of Personnel Management (OPM) and are available to retirees, their families, and survivors.

With over 250 plans to choose from, selecting the right FEHB plan can be overwhelming. Fortunately, the OPM provides a plan comparison tool to help you find the best plan for your needs.

FEHB plans offer a range of benefits, including coverage for prescription medications, dental and vision care, and mental health services. In fact, many plans offer comprehensive coverage with no out-of-pocket costs for preventive care services.

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At retirement, your employing office will tentatively determine if you're eligible to continue enrollment in the FEHB program.

OPM's Office of Retirement Programs reviews the retirement and health benefits documents and makes the final determination of your eligibility to continue the FEHB enrollment into retirement.

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You generally don't have to sign up for a Medicare Part D plan if you're covered through FEHB, as the prescription coverage through your FEHB plan may have fewer restrictions.

If you do sign up for Part D, it will usually be your primary insurer.

You won't have to pay a late enrollment penalty if you don't take Part D now and decide to enroll in the future, thanks to FEHB being considered creditable coverage.

People with Extra Help may want to use Medicare Part D, as the co-pays for those with Extra Help pay are typically lower than the costs in FEHB plans.

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During Open Season, review plan brochures and use online tools to compare FEHB options. These resources can help you understand the various premiums, coverage options, and out-of-pocket expenses, enabling you to make an informed decision.

High Deductible Health Plans (HDHPs) are often the cheapest FEHB plan type for most federal employees, with much higher deductibles than traditional HMO and PPO plans.

To make the most of your FEHB benefits in retirement, consider leveraging Open Season as an annual check-in on your healthcare needs.

During Open Season, it's essential to review plan brochures and use online tools to compare FEHB options. These resources can help you understand the various premiums, coverage options, and out-of-pocket expenses, enabling you to make an informed decision.

Consider factors such as access to specialists, prescription drug coverage, and potential cost savings from plans that work well with Medicare. Many FEHB plans offer excellent coverage, but some may have higher premiums or out-of-pocket expenses.

Reviewing plan brochures and online tools can also help you identify any potential gaps in your coverage, such as limited access to specialists or high out-of-pocket expenses for prescription drugs. This can help you make a more informed decision about which plan is best for you.

It's also a good idea to consider how your FEHB plan will work with Medicare, if you're eligible. Some FEHB plans are designed to work well with Medicare, while others may have higher premiums or out-of-pocket expenses.

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Most people don't have to pay a premium for Medicare Part A. You can only delay Part A until you begin collecting Social Security, at which point your Part A coverage will start automatically.

The Office of Personnel Management recommends taking Part A if you don't have to pay a premium. This is because having Part A can limit your out-of-pocket costs for expenses it covers, such as hospital or skilled nursing facility stays.

If you have FEHB coverage that is HSA-qualified and you want to continue making contributions to your HSA, you might want to delay enrolling in Part A. This is because having Part A means you can't contribute to a Health Savings Account.

Many older retirees are not eligible for Social Security because they participated only in the Civil Service Retirement System and didn't have Social Security taxes withheld. In this situation, they might choose not to enroll in any part of Medicare.

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As a retiree, you may be wondering how Medicare and FEHB work together. Most federal retirees enroll in Medicare Part A (hospital insurance) at age 65, and it's free if you've paid into Medicare throughout your working years.

If you choose to delay your enrollment in Medicare Part B, you may be subject to a late enrollment penalty if you eventually decide to enroll. However, as a federal retiree, you have an eight-month window during which you can enroll in Part B at any time without a penalty.

If you're considering enrolling in Medicare Part B, think about how it aligns with your budget and healthcare needs. Enrolling in Part B can reduce some FEHB costs, as certain FEHB plans offer lower premiums or secondary coverage when paired with Medicare.

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If you're a federal retiree, Medicare's rules are different than for most people. If you don't enroll in Medicare, your FEHB plan will act as your primary insurer and won't pay less because you qualify for Medicare.

You can delay enrolling in Medicare Part B, but be aware that you may face a late enrollment penalty if you decide to enroll later. This penalty can be significant, so it's essential to consider your healthcare needs and budget before making a decision.

As a federal retiree, you have an eight-month window to enroll in Part B without a penalty after you transition to retiree coverage. After that window ends, you'll have to wait until the January-March General Enrollment Period to enroll, and you'll face a late enrollment penalty.

Most people don't have to pay a premium for Medicare Part A, and having it combined with FEHB coverage can limit your out-of-pocket costs for hospital or skilled nursing facility stays.

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If you have FEHB coverage, you generally don't need to sign up for Medicare Part D, as your FEHB plan may have fewer restrictions on prescription coverage.

The prescription coverage through your FEHB plan may have fewer restrictions, such as quantity limits or prior-authorization requirements, compared to Part D plans in your area.

If you do sign up for Part D, it will usually be your primary insurer. Starting in 2024, some FEHB plans shifted to employer group waiver plan (EGWP) Part D coverage, and enrollees were notified of this change with the option to opt out of the transition to Part D drug coverage.

You won't have to pay a late enrollment penalty if you don't take Part D now and decide to enroll in the future, because FEHB is considered creditable coverage.

People with Extra Help may want to use Medicare Part D, as the co-pays for those with Extra Help are typically lower than the costs in FEHB plans.

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Budgeting for healthcare costs in retirement is crucial, and FEHB premiums can increase each year, with a 13.5% average increase expected for 2025.

You can budget for these costs by paying your FEHB premiums directly from your retirement annuity, making it easier to manage your expenses on a fixed income.

Review your FEHB plan options each year to ensure you're in a plan that matches your health needs and budget, and consider switching to a more comprehensive plan if you anticipate higher healthcare costs in the future.

Consider the out-of-pocket costs beyond premiums, such as copays, coinsurance, and deductibles, and explore the full range of plan options each year during the Open Season.

Budgeting for healthcare costs in retirement is crucial, especially with FEHB premiums increasing by an average of 13.5% in 2025.

You can pay your FEHB premiums directly from your retirement annuity, making budgeting easier for those living on a fixed income.

Review your FEHB plan options each year to ensure you're in a plan that matches your health needs and budget.

FEHB premiums will vary based on the specific plan you select and the amount your former federal agency contributes, which continues even after you retire.

You'll also want to consider out-of-pocket costs like copays, coinsurance, and deductibles when planning your healthcare budget.

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You can save money on FEHB premiums by enrolling in Medicare, but only if your plan waives cost-sharing for people enrolled in Medicare, which you should check with your insurer.

Having Medicare Part A and B can allow you to switch to a less expensive version of your current FEHB plan.

You pay more for Medicare Part B in 2024 if you earn over $103,000 (or $206,000 for a couple), according to your tax return from two years ago.

These higher premiums can range from $244.60/month to $594/month in 2024.

Enrolling in Medicare Part A is free if you’ve paid into Medicare throughout your working years.

Most retirees enroll in Part A as soon as they’re eligible at age 65.

You can only delay Part A until you begin collecting Social Security.

Many federal retirees find that Medicare Part B works well alongside FEHB, as it can help cover out-of-pocket costs such as deductibles and coinsurance.

Certain FEHB plans offer lower premiums or secondary coverage when paired with Medicare.

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You can suspend your enrollment in FEHB to enroll in Medicare Advantage or other eligible coverage, but be aware that you'll have to wait until Medicare's fall open enrollment and FEHB's Open Season to re-enroll.

If you suspend your FEHB coverage, you'll be allowed to leave your Medicare Advantage plan and return to FEHB, but you'll have to wait until your Medicare Advantage plan ends through no fault of your own, or if you move out of the Advantage plan's service area.

You can also suspend your FEHB enrollment if you want to use health coverage through Medicaid, Peace Corps, CHAMPVA, TRICARE, or TRICARE-for-Life, and re-enroll in FEHB if this other coverage ends through no fault of your own.

If you cancel your FEHB coverage instead of suspending it, you'll never be able to re-enroll, so it's a good idea to think carefully before making a decision.

Having additional coverage may not be helpful if you can't afford its premiums, and you may find that your healthcare costs are lower overall if you don't use FEHB, especially if you qualify for the Medicare Savings Program (MSP) or Medicaid.