FEHB & Medicare: The Fourth Piece of the Retirement Benefit Puzzle - United Benefits

FEHB & Medicare

Federal Employee Health Benefits (FEHB) and Medicare work together to form a crucial piece of your retirement benefits puzzle. Both are designed to help cover your healthcare costs and needs. In the past Federal Employees have often been misinformed on the complexities of how FEHB and Medicare work together. You will want to use both systems to create an efficient health care plan for your specific health care needs. Therefore, it is vitally important to speak with a representative that understands FEHB and Medicare to help guide you to the best option.

Federal Employee Health Benefits

FEHB is your health insurance through your federal employer, and you can stay enrolled throughout retirement if you qualify. FEHB can be used in multiple combinations with Medicare. Once retired and 65 years old or older, Part A will serve as your primary health insurance coverage for covered inpatient care and certain home care services, and FEHB will be the secondary payer. There is a coordination of benefits between Medicare and FEHB, so the FEHB policy acts as supplemental coverage to Medicare Part A. If you are enrolled in Medicare Part B and FEHB, Medicare Part B would serve as the primary payer, and FEHB would act as the secondary insurance payer.

What do I need to do when I retire in regards to FEHB and Medicare?

You are entitled to Medicare Part A and Part B. Although Part B is technically optional, there are situations in which a penalty applies. In addition, you will need to choose the FEHB plan that best suits your needs. If you’d like extra benefits not covered by Medicare Part A, Medicare Part B, or your FEHB plan, then you can decide to enroll in a Medicare Advantage plan.

What Happens to my FEHB when I retire?

As a federal employee, being able to continue your Federal Employees Health Benefits in retirement at the same rate as a regularly employed FERS participant is one of your most valuable benefits. To continue your health benefits enrollment into retirement, there are two basic requirements:

  1. Have retired on an immediate annuity
  2. Have been continuously enrolled (or covered as a family member) in any FEHB Program plan (not necessarily the same plan) for the five years of service immediately preceding retirement.

What about Medicare Part A?

Medicare Part A automatically starts at age 65 and becomes primary after you are retired. Medicare Part A is prepaid before 65 through your taxes, and there is no additional cost. Additional Medicare components B, C, and D cover other portions of your health care, including doctor’s visits, prescription drugs, etc., and can be purchased in addition to Medicare Part A. 

What is Medicare Part B?

Medicare Part B is medical insurance coverage and comes with a premium. Medicare Part B along with Part A will serve as the primary payer, and FEHB would act as the secondary insurance payer. 

Do I need to sign up for Medicare Part B?

Deciding to enroll in Medicare Part B will depend on your specific situation. Some considerations:

  • Medicare Part B may provide coverage for things that FEHB doesn’t cover or has limited coverage for
  • Medicare Part B also allows you to access any health care provider that accepts Medicare, while FEHB only provides access to a limited number of in-network providers.
  • If you do not enroll in Medicare Part B during your initial enrollment period, you must wait for the general enrollment period (January 1- March 31 of each year) to enroll, and Part B coverage will begin the following July 1 of that year.  
  • If you wait 12 months or more after first becoming eligible, your Part B premium will go up 10 percent for every 12 months that you could have had Part B but didn’t take it. You will pay the extra 10 percent for as long as you have Part B unless your current coverage is considered creditable. 

Medicare Part C/Advantage Plans & FEHB

If you decide you’d like coverage beyond Medicare Part A, Medicare Part B, and FEHB, there are also Medicare Advantage plans. Medicare Advantage is also known as Medicare Part C. Medicare Advantage plans are a form of private health insurance that provides the same coverage as Medicare Part A and Part B and may include additional benefits such as dental, vision, and prescription drug coverage. FEHB is considered creditable coverage and does not require Part D prescription drug coverage. Some Medicare Advantage plans are medical benefits only and do not include prescription drug coverage, they do however include extra benefits that may not be available on your FEHB plan. 

Advantage plans provide additional benefits that FEHB or Medicare does not cover. In addition, these plans come with a monthly premium which can be as low as $0 – meaning you can receive additional coverage at no cost to you. 

You must be enrolled in Medicare Part A & Part B in order to be eligible for a Medicare Advantage plan.

If you have both a Medicare Advantage plan and FEHB, Medicare Advantage would serve as the primary payer and would then be supplemented by FEHB.

Some Medicare Advantage plans offer coverage for services that aren’t covered by Medicare Parts A & B, and may not be covered by your FEHB. Here are a few benefits that could be covered under a Medicare Advantage plan:

  • Dental, Vision & Hearing
  • Non-emergency Health Care Transportation
  • Memberships to Gyms or Wellness Programs
  • Home Improvement Projects Designed for Aging in Place
  • Over-the-Counter Products 
  • Part B Premium Reductions 
  • Healthy Meals Following an Inpatient Hospital Stay

*When enrolling in a Medicare Advantage plan and choosing to keep your FEHB coverage, be sure to choose a Medicare Advantage plan without drug coverage.

When can I enroll in Medicare Part C/Medicare Advantage?

Your Initial Enrollment Period allows you to enroll in a plan from the date 3 months before your 65th birthday to 3 months after your birthday. If you are under 65 and eligible for Medicare, your Initial Enrollment Period occurs during your 24th month of disability.

You may also join or switch plans during the Annual Election Period (AEP). The AEP runs from October 15 to December 7 every year, with elected coverage starting Jan 1.

There are also Special Enrollment Periods (SEPs) that allow you to enroll in a plan due to special circumstances, such as: 

  • Moving outside of your current plan’s coverage area
  • Moving to an area where additional coverage options exist
  • Losing employer coverage
  • Moving into or out of a skilled nursing facility

Which plans are offered with $0 premiums?

Many Medicare Advantage plans will have a $0 premium. Premiums are dependent on your location and the carrier. A United Benefits Medicare Specialist can help you explore what plans are available and learn how to get additional coverage at no cost to you.

How to Decide Which Plan is Right For You

Deciding which parts of Medicare and what FEHB plan you should enroll in can be a confusing, overwhelming decision. You can significantly simplify your options with just a few easy steps:

  1. Decide who you are covering under the plan
  2. Think about your current Health Care need
  3. What cost savings are most important to you
  4. Confirm that your doctors are part of the network
  5. Ensure that you have all the benefits you are entitled to

FEHB and Medicare Advantage can complete your benefit package. Giving you a rich offering of Health coverage as well as extra benefits. Please contact a United Benefits Medicare Specialist for a free benefits review by completing the form below.

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