Did you know that federal law requires FERS participants to make a decision about enrolling in Medicare when you turn age 65? On one hand, if you’re still an active federal employee covered under FEHB, or covered under a spouse’s employer plan, you can delay making the decision without paying a penalty. On the other hand, if you’re retired, making that decision can get complicated when you have FEHB coverage.
Medicare Part A Is Premium-Free
Medicare Part A provides inpatient hospital coverage and related services. Since you’ve paid for Part A through your payroll taxes, it costs you nothing. That’s why the OPM recommends enrolling in Medicare Part A to help cover some hospital-related costs like FEHB deductibles, coinsurance, and costs that exceed your FEHB plan’s allowable charges.
However, when you enroll in Part A, you can no longer contribute to a Health Savings Account (HSA). If your FEHB coverage is HSA-qualified, and you want to continue making contributions while you’re working, you can delay enrolling in Medicare Part A. Once you start receiving your Social Security benefit, your Part A coverage starts automatically.
“However, you may want to consider coordinating FEHB and Medicare coverage because Medicare Part B pays for visits to doctors outside your HMO network.”
Medicare Part B Can Be Coordinated With FEHB
Enrolling in Medicare Part B (outpatient medical care) means you’ll have to pay a monthly premium that usually increases from year to year. Generally, if you’re enrolled in one of FEHB’s HMO plans you may not need Medicare Part B because HMOs cover most of the same medical services.
However, you may want to consider coordinating FEHB and Medicare coverage because Medicare Part B pays for visits to doctors outside your HMO network. Since some services covered by Medicare Part B are not covered (or only partially covered) by your FEHB plan, having both plans in retirement may provide more coverage. Read our article: Understanding The Coordination Of FEHB & Medicare Coverage.
Carefully Check Your FEHB Plan Brochure Before Deciding
Since some FEHB insurers waive deductibles, co-pays and coinsurance when you have Medicare Parts A and B, you may be allowed to switch to a less expensive version of your current FEHB plan. Then again, other FEHB plans may provide coverage for care like dental and vision which Medicare doesn’t cover.
If you’re actively employed and have both FEHB and Medicare, FEHB is your primary insurer. Once you retire, Medicare becomes your primary and FEHB is your secondary insurer. Before making a final decision, refer to Section 9 of your plan’s brochure to see how your FEHB plan works with Medicare. Also check out the FEHB and Medicare Fact Sheet on the OPM website.
