Covering the Bases: Federal Employee Health Benefits Program and Medicare Part B

I am a federal employee and will retire this year. I plan on continuing my Federal Employee Health Benefits Program (FEHBP) as a retiree. I will be 65 soon and am not sure what to do about enrolling in Medicare. I have enough work quarters for premium-free Part A and will enroll in Part A. My wife is covered under my FEHBP and also will be Medicare-eligible soon; she also will enroll in Part A. Here is the question: Do we have to enroll in Medicare Part B?

You are not alone with this dilemma; most Federal retirees wrestle with this question. To set your mind at ease, you have a wonderful insurance through the FEHBP. You will want to continue this insurance upon retirement. Your decision on enrolling in Part B will be based on weighing some facts.

The FEHBP retirement system is one of the few retirement health insurances that does not require a retiree to elect Part B of Medicare.

Recall, Medicare Part B has a monthly premium of $104.90/month (higher income earners pay a higher monthly premium). If you elect to have both insurances, you will have higher monthly premium costs; you will pay a monthly premium for both the FEHBP insurance and for Medicare Part B. However, by having both insurances, you will pay less out-of-pocket when use medical services than you would have to pay by having FEHBP insurance alone.

As a retiree, if you elect both Medicare and FEHBP, your Medicare is your primary insurance and FEHBP is secondary. If you elect Medicare Part B when you are newly 65 (as a retiree), you will avoid a late enrollment penalty if you later decide that you want to enroll into Medicare Part B.

The other side of the debate is as follows: If you continue only with your FEHBP, you save Medicare Part B premium costs. You will continue your FEHBP plan and pay the out-of-pocket costs for medical services as defined by your FEHBP insurance plan. Read your plan's Summary of Benefits to review your out-of-pocket requirements for your particular FEHBP plan. Recall, FEHBP plans do change their coverage year by year; so your out-of-pocket costs could increase in future years. If you decide to join Part B at a later date and you are not either a new retiree or newly age 65, you will incur a late enrollment penalty for Part B.

A cautionary note for your wife who is covered under your FEHBP benefit: If you (a retiring federal employee) establish your wife as a survivor-annuitant, she would follow the above discussion regarding the decision to enroll (or not enroll) in Medicare Part B. However, if you (a retiring federal employee) do not elect for your wife to be covered under the FEHBP program as a survivor annuitant, your wife is advised to elect Medicare Part B when she is eligible. If you predecease your wife and she is not a survivor annuitant, she will lose her FEHBP coverage. If she does not have Medicare, she will need to enroll in Medicare at that time and could incur an astronomical late enrollment penalty.

If you have further questions about your FEHBP benefits, you may contact the Office of Personnel Management (OPM) by visiting www.opm.gov; or you may discuss your concerns with your employing agency's health benefit officer.

Amy Rubino is director of the Senior Health Insurance Assistance Program and the Senior Medicare Patrol for the Anne Arundel County Department of Aging & Disabilities. SHIP assists people with their Medicare-related questions; SMP assists people with issues related to Medicare fraud. You may contact either program by calling 410- 222-4464 or [email protected].