If you are covered by Federal Employee Health Benefits and become eligible for Medicare, you probably have questions regarding which coverage to take or if you can have both. Below, we review all possible scenarios for those on FEHB and Medicare. Thus, ensuring you have a clear understanding of how the two coverage types work together.
Medicare vs. FEHB Coverage
FEHB is the world’s largest employer-sponsored group health insurance program. This coverage is for federal workers and retirees, as well as their families and spouses. Like Medicare, FEHB includes coverage for inpatient and outpatient services. So retired, former, and active federal employees who are eligible for both programs – as well as those who are eligible for FEHB through their current or former spouse – often wonder if they can have both Medicare and FEHB at the same time.
The short answer is yes. You can have Medicare and FEHB coverage simultaneously. But do you need both? Well, it can be beneficial. We’ll discuss how and why – please also check out our video or podcast below.
Do You Need Both Medicare and Federal Employee Health Benefits?
Although most people who are eligible for Medicare and FEHB won’t need a Medicare Supplement or Medicare Part D plan, the truth is that FEHB can be expensive. Thus, these beneficiaries often ask if there’s a way to coordinate their coverage that will also minimize their out-of-pocket costs. With Medicare, there are a few ways to do this.
How Does FEHB Work With Medicare?
For those on FEHB and enrolling in Medicare, it is important to know that Medicare will always pay secondary to FEHB while you or your spouse are still employed. Although the coverage may look similar, often you will find that Medicare offers more extensive coverage for things like durable medical equipment, home health care, and prosthetic devices – to name a few.
FEHB With Medicare Part A
Those who have paid Medicare taxes for enough quarters are eligible to enroll in Medicare Part A, premium-free. Often, it is recommended that those who are eligible for premium-free Medicare Part A enroll in the coverage, even if they are still working. Although it will pay secondary to your FEHB, it is an earned benefit that you should take full advantage of.
FEHB With Medicare Part B
For Medicare’s Part B outpatient coverage, you’ll need to pay a monthly premium – no matter how many quarters you pay Medicare taxes. Additionally, you’ll still have to pay the FEHB premium. So, if you have FEHB, you can delay Medicare Part B for as long as you’re working and may save money by doing so.
When deciding whether to pick up Medicare Part B, calculate what you’d pay in Medicare Part B premiums for the year (higher-income earners are responsible for larger premiums). Then, calculate your best estimate for the dollar amount you’d need to pay in copayments for outpatient services on FEHB.
If you find that you would pay more in premiums, you’ll indeed save money by delaying Medicare Part B. Yet, those whose copays on FEHB in an average year outweigh their would-be Medicare Part B premiums should consider enrolling in Medicare Part B. Remember, once you enroll in Medicare Part A and Part B, Medicare will become your secondary coverage while FEHB acts as primary while you are still working.
With this combination of coverage, you can see any practitioner who accepts Medicare and receive benefits through Medicare Part B that FEHB doesn’t provide.
FEHB With Medicare Part D
When you have FEHB, it is not necessary to enroll in Medicare Part D. Federal Employee Health Benefits covers prescription drugs at no additional cost, so having a Medicare Part D plan would not be beneficial.
Suspending FEHB for Medicare Plus Supplemental Coverage
If you have Original Medicare and FEHB but want coverage through a Medicare Advantage, you’ll need to suspend your FEHB coverage. Suspending FEHB is not the same as canceling. Meaning, you can re-enroll if you decide to suspend your FEHB. However, if you enroll in a Medicare Supplement plan, you will be required to cancel your FEHB.
Advantage plans, also known as Medicare Part C, become your primary coverage. Medicare pays the private insurance company offering the policy to take on the beneficiary’s risk. Most of these plans include dental, vision, hearing, and prescription drug coverage.
For as long as you suspend your FEHB, you won’t have the prescription drug coverage you used to receive.So, ensuring your Medicare Part C plan has drug benefits is crucial. If you choose to return to your FEHB plan, you can do so during Open Season.
If you choose a Medigap plan to go with your Medicare Part A and Part B coverage, you should also look for a Medicare Part D plan to cover prescription drugs, as a lack of creditable drug coverage will leave you vulnerable to a penalty.
FEHB Coverage After Retirement
It’s never mandatory to take Medicare – yet, there can be consequences to delaying enrollment. When you have FEHB, you’re safe from the Medicare Part B late enrollment penalty for as long as you or your spouse is actively working.
When you or your spouse retires, however, things get more complicated. Once you or your spouse stops working you will be granted a Special Enrollment Period. This will allow you 63 days from the time of the event to enroll in Medicare if you have delayed coverage. Otherwise, you’ll be subject to the late enrollment penalty whenever you enroll.
As long as you keep FEHB, whether or not you’re working, your prescription drug coverage is sufficient, and you’ll avoid the late enrollment penalty for Medicare Part D.
Mail Handlers Insurance and Medicare
The Mail Handlers Benefit Plan (MHBP) has been serving federal and postal employees for over 50 years. Aetna administers the MHBP, whose plan options include Self Only, Self Plus One, and Self and Family – similar to FEHB.
It’s best to have MHBP and Medicare when you become Medicare-eligible. Medicare will be the primary insurance and MHBP will give you access to things Medicare doesn’t cover like additional options for chiropractic care.
How to Get Help Understanding Your Options with FEHB and Medicare
Our agents are Medicare experts and can walk you through the process of identifying your options. Then, we can help you make the best choice for your needs.
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