ORIGINAL MEDICAREBeneficiaries eligible for Both FEHB and Medicare could benefit from having both types of insurance. The Federal Employee Health Benefits Program (FEHB) is a type of federal insurance program available for government employees and retirees.
The FEHB is through the U.S. Office of Personnel Management for those who qualify.
FEHB and Medicare
Federal employees and retirees are eligible for Medicare Part A, just like all other working Americans. Enrollment for Medicare Part A is just like any enrollment.
The Initial Enrollment Period (IEP) is the six months surrounding your 65th birthday; this is when a federal employee/retiree should enlist.
If you continue to work or not, still enroll in Medicare Part A. FEHB benefits give primary health insurance coverage and Medicare Part A benefits are a secondary provider.
FEHB and Medicare combined can provide beneficiaries with great coverage
Your FEHB benefits will include coverage for things like:
- Deductibles
- Coinsurance
- And other out of pocket costs
The Federal Employee Health Benefits Program is an employer group health plan; consider Medicare Part B and talk to a benefits administrator. Understanding your insurance is always beneficial.
Federal Employee Health Benefits Vs. Medicare
Both Medicare and the Federal Employee Health Benefits Program offers much of the same coverage when it comes to the basics.
Medicare Part A hospital coverage and Medicare Part B outpatient coverage are both included in what the FEHB benefits cover.
Medicare and FEHB benefits can make sense together
Benefits offered by the Federal Employee Health Benefits Program:
- Emergency travel coverage should something happen outside of the United States
- Some FEHB offer vision care
- Some FEHB offers dental care
Benefits available through the Medicare Program include:
- Orthopedic devices
- Prosthetic devices
- Durable Medical Equipment (DME)
- Home health care
- Limited coverage on chiropractic services
To reiterate, FEHB is primary insurance, and Part A is optional; this gives you a more comprehensive coverage plan.
Benefits of Having Both Medicare & FEHB Coverage
It’s not always in your best interest to have both Medicare and FEHB benefits; however, for some beneficiaries having both could substantially lower out of pocket risks. Most FEHB plans offer a “coordination of benefits” with Medicare; this coordination could eliminate out of pocket costs by waiving deductibles, copayments, and coinsurance fees.
The ultimate factor is whether having both is cost-effective compared to potential exposure.
Income plays a role in your Part B premium costs. A couple with an FEHB Self-Plus-One Plan could have a Maximum Out of Pocket of $6,500. Well, if that couple would pay $7,000 in Part B premiums for the year, then having both could be ineffective. You wouldn’t pay $7,000 to save $6,500.
Although, a couple with a maximum exposure of $12,000 on an FEHB Self-Plus-One Plan would benefit from both if the Part B premium were only $4,000 a year. Many would at least consider paying $4,000 a year to protect themselves from a $12,000 risk.
This would be beneficial for those that don’t have three years of catastrophic costs saved to cover one year. Over three years in Part B premiums, you would spend $12,000; however, you save yourself a potentially unbearable amount in catastrophic coverage costs.
After close consideration, you may find that FEHB coverage and Medicare are beneficial together with the additional protection against the costs of illness.
FEHB and Medicare Part B
Enrolling in Medicare Part B has some advantages. FEHB remains primary, and Part B is secondary; some FEHB’s waive copayments and deductibles should you carry Part B benefits.
There is still the Part B late penalty fee after retirement regardless of the FEHB benefits; however, after you retire, if your spouse is actively working and has employer insurance coverage, then the Part B benefit is waived.
You’ll want to weigh the risks of paying the two premiums vs. paying the Medicare Part B penalty to gauge whether or not it’s financially responsible for putting off Part B enrollment to a later time.
The Federal Health Benefits Program provides excellent comprehensive coverage. Employer-group health plans will have changes in premium, benefits, deductibles, copayments, and coinsurance. These changes generally tend to be against the FEHB policyholders.
For questions or concerns regarding Traditional Medicare, Federal Employee Health Benefits, Advantage Plans, and Part D Prescription Plans, give us a call. We can also discuss and sign you up for a Medicare Supplement Plan, for those with only Traditional Medicare benefits, to help offset some of the costs not covered.
FEHB and Medicare Part C Enrollment
Being that Medicare Part C requires you to carry both Medicare Part A and Medicare Part B for enrollment, it’s likely that you’ll continue with FEHB benefits.
Since Medicare Advantage Plan benefits provide coverage similar to FEHB benefits, most find that a Medicare Advantage Plan is unnecessary.
A Medicare Advantage Plan offers similar, if not the same, benefits as an FEHB policy. So, beneficiaries can suspend those benefits while carrying a Medicare Part C plan.
You’ll be required to provide coverage documentation to the retirement system upon enrolling in the Medicare Advantage Plan and before suspending FEHB benefits.
Beneficiaries can re-enroll in an FEHB policy once they lose or decide to cancel the Advantage Plan.
Re-enrollment in FEHB benefits depends on why a beneficiary is no longer carrying a Medicare Advantage policy. Losing insurance due to moving out of the service area or if the plan left the area gives recipients a period up until 60 days to re-enroll.
Canceling a Medicare Advantage Plan on your own accord could make you ineligible to re-enroll until the next available Open Season.
The FEHB Open Season usually takes place from November 12 through December 10, and coverage begins on January 1 of the following year.
FEHB and Medicare Part D coverage
You can combine FEHB and Part D for optimal coverage
Those with FEHB benefits can delay Part D enrollment since the FEHB benefits count as creditable coverage. Meaning, FEHB beneficiaries can’t receive a Part D late enrollment penalty.
With your FEHB plan, prescription drug benefits are available. These benefits may be broader, and you may want Part D coverage if your prescriptions aren’t on the FEHB formulary.
Those with FEHB and Part D will likely see Part D pays primary for medications. You must keep your FEHB drug coverage; FEHB can’t separate health and medication coverage.
FEHB and Long-Term Care
Those that qualify for the FEHB Program can apply for Federal Long Term Care Insurance. Another option would be a Medicare Advantage plan.
Now that MA plans can offer LTC coverage, some policies are including this care. Standard Medicare won’t provide you with any Long Term Care benefit; however, an advantage policy might.
FEHB and Working
If you continue to work past the age of 65, the best course of action is to delay enrollment with Medicare Part B until retirement. FEHB will cover most of what Medicare Part B benefits cover, but beneficiaries will save money by not paying the Part B premium.
At retirement, beneficiaries can enroll in Medicare Part B to have secondary insurance coverage.
Those still working are exempt from the Medicare Part B late penalty fee. Upon retirement, beneficiaries receive an eight-month Special Enrollment Period (SEP) from enrolling in Part B benefits.
Retiring with FEHB
Upon retirement, Federal employees may keep FEHB benefits. Enrolling in Medicare Part B means secondary insurance benefits that pick up out of pocket costs beneficiaries would otherwise pay.
Additionally, there are some things to consider when continuing FEHB benefits.
Medicare and FEHB
Every FEHB policy adjusts benefits payable this way they supplement instead of duplicate Medicare coverage.
When Medicare is the primary payer, they pay first, and the FEHB pays a partial benefit as the secondary insurer.
In most cases, 100% of the allowable expenses have coverage from Medicare and the FEHB policy.
However, this doesn’t mean all the bill is covered. You’re responsible for the remaining expenses Medicare and the plan don’t cover.
The premium won’t be less because of Medicare coverage.
Beneficiaries with both Medicare and FEHB benefits will pay both premiums; extra coverage is an additional cost.
