Beneficiaries eligible for FEHB and Medicare could enjoy having both types of insurance. The Federal Employee Health Benefits Program (FEHB) is for government employees and retirees. The FEHB is through the U.S. Office of Personnel Management for those who qualify. Below we’re going to discuss the benefits of having both Medicare and FEHB insurance. You’ll learn how these programs can work together and which options make the most sense for you.
How the Federal Employee Health Benefits Program and Medicare Work
Retired and active federal employees with FEHB and Medicare often question how these two work together. Well, we’re going to answer all your questions and teach you everything you need to know. First, let’s compare Medicare and the Federal Employee Health Benefits Program, so you understand the basics of each plan’s coverage.
Medicare and You Guide for Federal Employees
Both Medicare and the Federal Employee Health Benefits Program offer similar coverage. FEHB benefits cover inpatient and outpatient services, just like Medicare. But each program does provide a few different benefits. Let’s take a look at some of these differences!
Benefits offered by the Federal Employee Health Benefits Program:
- Emergency foreign travel
- Some FEHB offer vision care
- Some FEHB offers dental care
Benefits available through the Medicare Program include:
- Orthopedic devices
- Prosthetic devices
- Durable Medical Equipment
- Home health care
- Limited coverage on chiropractic services
FEHB is primary insurance, and Medicare is optional; having both gives you a more comprehensive plan.
What are the Benefits of Having Both Medicare and Federal Employee Health Benefits?
It’s not always best to have both Medicare and FEHB benefits, but, for some having both could lower costs. Most FEHB plans offer a “coordination of benefits” with Medicare. The coordination cut costs by waiving deductibles, copayments, and coinsurances.
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 $5,000.
Well, if that couple would pay $5,800 in Part B premiums for the year, then having both could be ineffective. You wouldn’t pay $5,800 to save $5,000.
Although, a couple with a maximum exposure of $10,000 on an FEHB Self-Plus-One Plan could benefit from both if the Part B premium were only $2,400 a year. Many would at least consider paying $2,400 a year to protect themselves from a $10,000 risk.
It would take over four years in Part B premiums to spend $10,000, and you protect yourself from a catastrophic medical event. After consideration, you may find that FEHB and Medicare insurance is beneficial together.
Should I Get Medicare Part B if I Have FEHB?
The Federal Health Benefits Program provides high-quality coverage. It’s not mandatory to take Part B when you have FEHB benefits, but you have the option. Several FEHB plans waive copayments and deductibles when you have Part B benefits.
How the Federal Employee Health Benefits Program and Medicare Advantage Works
Medicare Advantage plans and FEHB are very alike. There isn’t much need to have both. The best part? You may be able to suspend FEHB benefits while on an Advantage plan.
So, you don’t have to make two premiums. But, you do need Part A and B to qualify for Part C.
Further, if you choose to return to the FEHB plan, you have an annual opportunity to make that change during Open Season.
Also, if you move or lose Part C through no fault of your own, you can change back to an FEHB plan.
How the Federal Employee Health Benefits Program and Medicare Part D Works
You can forego Part D since the FEHB is creditable drug coverage. With your FEHB plan, drug benefits may be broad. You’ll want Part D coverage if your prescriptions aren’t on the FEHB formulary. Part D pays primarily for medications.
But, you must keep your FEHB plan; FEHB won’t separate health and medication coverage.
Mail Handlers Insurance and Medicare
The Mail Handlers Benefit Plan (MHBP) has been around for federal and postal employees for over 50 years. They have a few plan options, including Self Only, Self Plus One, and Self and Family. It’s best to have MHBP and Medicare. Then, Medicare will be the primary insurance, and MHBP will give you access to things Medicare doesn’t cover like overseas coverage and chiropractic care.
FEHB and Medicare and TRICARE For Life
Federal employees can’t suspend coverage; but, you can cancel and choose TRICARE For Life instead. And, if you lose TRICARE involuntarily, you can immediately re-enroll in FEHB. Further, if you choose to dis-enroll from TRICARE, you can still re-enroll in FEHB.
How the Federal Employee Health Benefits Program and Long-Term Care Works
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 Advantage plans can offer Long-Term Care, some policies include coverage. Medicare won’t provide any Long Term Care benefit; but, an advantage policy might.
Federal Employee Health Benefits Program and Working
If you continue to work past the age of 65, the best course of action is to delay Part B until retirement. FEHB will cover you and save you from paying the Part B premium. Those still working are exempt from the Part B late penalty fee. Yet, if you enroll in Medicare while you’re still working, FEHB will be primary and Medicare will be secondary.
Retiring with Federal Employee Health Benefits
Upon retirement, you have an eight-month Special Enrollment Period (SEP) to enroll in Part B. At that time; you can choose if Part B and Part C will benefit you. Federal employees may keep FEHB benefits. Enrolling in Part B means secondary insurance that picks up costs you’d otherwise pay.
FAQs
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Lindsay – inquiring for my Mom who has both Medicare and MHBP coverages. A number of years ago around 2013 when Mom had to receive PT from a SNF Medicare was her primary provider and MHBP was secondary and her treatment extended beyond the 100% Medicare covered initial 20 days, the co-pay amount for days 21+ had been covered by MHBP. Unfortunately Mom has had another incident requiring SNF PT and I being told that MHBP no longer will cover the co-pay if her PT extends beyond the 20 Medicare covered days since Medicare is her primary coverage. Was there a change to the MHBP coverage of co-pays when Medicare is primary? Thank you
Hi Kevin! I don’t see any changes to the benefits, on page 14 you can see changes for 2021. It states that SNF is only covered for 40 days if MHBP is primary, but that is not a recent change. But that doesn’t mean it hasn’t changed since 2013. I would contact MHBP directly to find out what your options are.
I am a federal employee under FERS, age 62, planning to retire next year. My wife, covered under my FEHB plan, turns 65 later this year. Should she apply for Part A and/or Part B this year even though I am still working and we are covered by FEHB?
Hi Mike! Since Part A is premium-free, your wife should enroll. Regarding Part B, I would ask your benefits administrator to see if your wife is exempt from the late enrollment penalty since you are still working. I’m not sure how it works if the husband is still working but the wife is not. Normally, if you’re retired, you would need to enroll in Part B when you’re first eligible to avoid paying a late enrollment penalty later.
My BCBS Federal Employees Program will not be accepted come January 2021 at my hospital and most doctors. What should I do? Locate and sign up for a new insurance plan by December 14th?
Hi Jim! The Annual Enrollment Period ends December 7th. However, this enrollment period is for those who already have Medicare Advantage or Part D and want to make changes. If you don’t have Part B yet, you will get a Special Enrollment Period to enroll when you leave your FEHB plan. Once you enroll in Part B, you can then choose between enrolling in a Medigap plan or Medicare Advantage plan.
I am turning 65 in Jan 2021. My wife is 61. If I have Medicare Part A and B, I understand that my FEHB will become secondary coverage for me. Will the same FEHB insurance remain primary coverage for my wife?
Hi David! In theory, yes, but I would confirm with your benefits administrator.
How many retirees are covered under FEHB and what is the current average premium for a family plan?
Hi David! Unfortunately, we have no way of knowing how many retirees are currently covered under FEHB. Regarding premiums, they vary from state to state. According to FedSmith, the average monthly premium in Alaska for a family plan is around $400.