Considerations for FEHB and Medicare Ahead of Open Season

As we are heading into Open Season, FEDVIP and FSAFEDS are essential considerations, though we should observe the two types of health care coverage that a majority of people rely on in a particular point in their life; Medicare Parts A and B.

Medicare Part A is mainly for hospital insurance coverage. Considering that taxes to pay for the coverage are taken out of wages or self-employment earnings, the moment you are not employed anymore you should no longer be required to pay for Medicare premiums. After you have reached the age of 65, you should get these benefits at no costs apart from the required co-insurances and deductibles.

Generally, the FEHB program plans to assist you in paying for a particular kind of expense such as Medicare Part A. This includes stays at the hospital, post-hospital skilled nursing care, health care for the home. There are, however, some differences. To be aware of these differences, it is recommended to review what the plan covers and conduct a comparison of what is covered by Medicare Part A.

For individuals that are retired and aged over 65 years, their primary would be Medicare Part A, and the secondary plans would be their FEHB. Subsequently, your plan should mainly cover a share of deductibles and coinsurance in your Medicare. Your plan can also continue to offer reimbursement for services that it covers when Medicare does not.

For a retiree that is not covered by Medicare, the FEHB plan pays for benefits only at the rates that are set by Medicare, reduced by any deductible by an FEHB program, coinsurance, copayment, or penalty for readmission certification. Hospitals typically do not collect from you or your plan more than the stipulated amount that is equivalent of Medicare payment.

Medicare Part B coverage is for medical insurance services. This includes services from doctors, surgical supplies, and outpatient medical, and clinical laboratory services. Similar to Part A and your FEHB plan, they both overlap, and the differences can be understood through comparison of the two benefit packages.

Deciding to enroll in Part B, unlike for Medicare Part A, you may be required to pay for monthly premiums. The payable amount is based on your previous year’s taxable income, and the cost can be substantial. Failing to enroll at the initial enrollment period and changing your mind later, may subject you to a 10 percent permanent penalty for every year you were supposed to enroll that you did not.

The choice to enroll in Medicare Part B is your own. Some individuals have done this already, but the majority have not. Out-of-pocket expenses to individuals covered by an FEHB plan and both Medicare Parts A and B are less; Part B monthly payments can be much more significant. For instance, if in 2018 your taxable income was $85,000 or less, your monthly premiums would be $134. When it comes to people with higher incomes, the monthly premium tends to rise. It is essential to review your options before reaching a decision on the plan that suits you better.