Balancing Medicare and federal employee benefits; Covering; The Bases

I am a federal employee and will retire next month. I plan on continuing my Federal Employee Health Benefits Program as a retiree. I will be turning 65 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 into premium-free Part A. Here is the question: Do we have to enroll in Medicare Part B that will cost a monthly premium?

Your FEHBP insurance is valuable insurance, and you will want to preserve this insurance upon retirement; therefore, do not terminate your FEHBP insurance. Adding premium-free Part A is a wise decision. Your decision on enrolling in Medicare Part B will be based on weighing some facts.

The FEHBP retirement system is one of the few retirement health insurances that do not require a retiree to enroll into Medicare. Medicare Part B has a monthly premium of $134 a 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 parts A and B. 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 could incur an astronomical late enrollment penalty.

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

Amy Rubino is the director of the Senior Health Insurance Assistance Program and the Senior Medicare Patrol for the Anne Arundel County Department of Aging and Disabilities. You may contact either program at 410-222-4257 or [email protected].

Credit: Amy Rubino - Amy Rubino is the director of the Senior Health Insurance Assistance Program and the Senior Medicare Patrol for the Anne Arundel County Department of Aging and Disabilities. You may contact either program at 410-222-4257 or [email protected].