One major topic of interest is how FEHB interacts with Medicare. Though the Federal Employee Health Benefits (FEHB) provides complete health coverage for federal employees aged 65 and above, there’re many benefits to obtaining both FEHB and Medicare.
Some “experts” have come up against this arrangement, calling it bizarre and a massive waste of extra spending. However, for most employees, enrollment to Medicare is automatic.
So, why should you enroll in Medicare if you already have healthcare benefits through FEHB?
For most people, consolidating both FEHB and Medicare saved them money. However, this might not be true for everyone. It’s essential to have a clear understanding of the benefits of combining both programs.
Is it Advisable to Combine FEHB and Medicare Coverage?
Most federal employees already have Medicare Part A since they’ve been paying 1.45% of their income as payroll taxes for Medicare Part A coverage. Medicare Part A coverage comes with Zero additional premium for these categories of people, while those who didn’t earn it through their employer have to pay $422 monthly for it.
Upon turning 65, Medicare starts providing coverage for medical expenses, and once you have it, you cannot reject it.
Do Federal Employees Get to Keep Health Insurance Coverage After Retirement?
Retirees may choose to keep both Medicare and FEHB after retirement. Retirement starts at 65, and Medicare kicks start immediately and typically takes over as the primary insurance. Federal employees will still be eligible for Medicare, even if they continue working at age 65.
Medicare Part A only covers basic medical costs. People who want more coverage will have to join Part B.
Part B of Medicare is a fee-for-service plan which offers complete coverage. Beneficiaries of both Part B Medicare and FEHB will enjoy better coverage.
Does FEHB Offer More Than Medicare Part B?
Federal employees with HMO plans may not need Medicare Part B since HMO covers most medical expenses with small co-payments required. However, it costs a lot to see a doctor outside of your HMO plan. That’s why Medicare Part B is a better choice for some people as it covers the cost of out-of-network services.
Another benefit of Part B is that it covers the costs of non-emergency coverage while out of town. FEHB, on the other hand, covers emergency care while outside the US and dental and vision benefits.
How Does FEHB and Medicare Combine?
Medicare takes over as the primary health insurance, replacing the FEHB coverage. FEHB then becomes the retiree’s secondary insurance.
So, if you have any medical expenses, it will first go through Part B, and if it’s covered, then Medicare will clear the expenses. However, if it’s not covered, it will be run through FEHB and paid for if the program provides coverage for that medical service.
Retirees may gain little from having both programs since they cover similar services. However, if the program fits your budget, enrollment can be beneficial.
Enrolling for FEHB and Medicare Part C
To be eligible to enroll for Part C Medicare, you must first have Part A and Part B Coverage. Since FEHB offers benefits to Medicare, there might be no need to enroll for Part C.
However, suppose an individual decides to suspend their FEHB coverage. In that case, it will make sense to enroll for Medicare Part C. And if the beneficiary later decides to cancel Part C, they can re-enroll in the FEHB program.
However, the reason an individual no longer has an advantage plan is what determines whether they can re-enroll to FEHB. Typically, you can re-enroll within six days after losing the advantage plan.
FEHB Re-Enrollment Period
If an individual cancels a plan for personal reasons, then they’ll have to wait till the next Open Season, which runs between 12 November to 10 December, to re-enroll.
Do Federal Retirees Need Part D?
Medicare Part D covers prescription drugs, so federal employees needing these drugs often want to know if they need to enroll in the program.
The answer is no. FEHB coverage offers something similar so that you can delay joining a Part D Plan. Beneficiaries should, however, ensure to keep drug coverage from the FEHB program.
FEHB, Medicare, and Retirement – What’s the way forward?
The question of whether to combine FEHB and Medicare requires a personal answer. Every federal employee should investigate their circumstances to determine whether they stand to benefit from having both FEHB and Medicare.
It’s also essential to understand how both programs work, and one way to learn more is to ask your local health insurance agent.