Federal Employee Health Benefits (FEHB)
and Medicare
The Federal Employees Health Benefits (FEHB) Program is one of the most valuable benefits available to federal employees and retirees. FEHB offers a variety of health insurance choices, including Fee-for-Service and PPO plans, HMOs, Consumer-Driven Health Plans, and High-Deductible Health Plans.
Understanding how FEHB works when you reach age 65 and become eligible for Medicare is an important part of retirement planning.
What Happens to FEHB at Age 65?
- Turning 65 does not automatically end your FEHB coverage.
- According to the Office of Personnel Management (OPM):
- Your FEHB coverage continues whether or not you enroll in Medicare.
- If you qualify for premium-free Medicare Part A, OPM generally recommends enrolling.
- Medicare Part A can help cover hospital-related expenses and may reduce some of your out-of-pocket costs.
Do You Have to Buy Medicare Part B?
No.
Federal employees are not required to purchase Medicare Part B simply because they turn 65. You can keep your FEHB coverage without enrolling in Part B.
Part B covers doctors, outpatient services, and other medical expenses, but it comes with a monthly premium. Whether Part B makes financial sense depends on factors such as your FEHB plan, healthcare needs, and whether you are still working or have retired.
What About Medicare Part D?
You are not required to purchase a separate Medicare Part D prescription plan simply because you turn 65.
Some FEHB plans provide prescription-drug benefits that coordinate with Medicare. The specific benefits depend on the FEHB plan you select.
What About Medicare Advantage?
Some FEHB plans offer Medicare Advantage options. These plans require enrollment in both Medicare Part A and Part B and can provide additional benefits depending on the plan.
How FEHB and Medicare Work Together
- Federal employees and retirees can have both FEHB and Medicare.
- For a retired federal employee enrolled in Medicare, Medicare generally pays first and FEHB pays second. Depending on the FEHB plan, this coordination can reduce deductibles, copayments, and coinsurance.
- The important point is that you do not have to think of FEHB and Medicare as an either/or decision.
- The Better Retirement Planning Question - Instead of asking:
- "Do I have to get Medicare at 65?"
- A better question is:
- "How should I coordinate FEHB and Medicare to get the coverage I need while managing my retirement healthcare costs?"
- Healthcare expenses can represent a significant portion of retirement spending. Understanding your FEHB options and how they coordinate with Medicare before retirement can help you make better-informed decisions.
- At FERS Consultants, we help federal employees understand how FEHB fits together with the
- other major components of their retirement package:
- FERS Pension
- Social Security
- TSP
- FEGLI
- FEHB
Understanding your benefits today can help reduce the stress of retirement tomorrow.
Source: U.S. Office of Personnel Management (OPM), FEHB and Medicare resources. Specific plan provisions should be reviewed before making healthcare decisions.