Medicare and Federal Employee Health Benefits

Medicare is a program backed by the federal government that supplies health insurance benefits to people over age 65 and people with certain disabilities. While all citizens are entitled to this benefit, some people have additional choices. Federal employees have their own benefit program called the Federal Employees Health Benefits (FEHB) program. This program offers a wide variety of plans for federal workers, their spouses and their children up to age 26.

While the exact costs depend on the plan you choose, most people enrolled in the FEHB pay about 30% of their premium while their employer pays 70%. Many federal workers can carry this plan into retirement, allowing them the option to forego Medicare coverage. However, you can still sign up for Medicare with the FEHB — and doing so may be beneficial.

When do federal employees have to enroll in Medicare?

Federal employees can sign up for Medicare during the same enrollment periods as everyone else. When you first become eligible for Medicare at age 65, you have your birthday month, plus the three months before and after your birthday to sign up. Once you sign up for Original Medicare, there are designated enrollment periods when you can add or change parts of your coverage, like Medicare Advantage or a prescription drug plan.

You don’t have to sign up for Medicare if you are a federal employee on the FEHB plan. However, most people will qualify for premium-free Medicare Part A, so it’s recommended you sign up when you are first eligible even if you are on the FEHB plan.

Commonly referred to as “hospital insurance,” Part A protects you against potentially massive hospital bills. There still are some costs related to hospital stays with Part A, but if you have paid Medicare taxes through an employer for at least 10 years, you don’t have to pay a monthly premium for Part A coverage.

Do federal employees need Medicare Part B?

Medicare Part B, commonly called “medical insurance,” usually requires a monthly premium so it may or may not be necessary if you’re on an FEHB plan.

Both Parts A and B can be used alongside your FEHB plan to reduce any out-of-pocket costs you may have. The same applies to Medicare’s prescription drug plan, Medicare Part D. While prescription medications are covered under your FEHB plan, Medicare would act as a secondary payer to pick up at least a portion of your share of medications costs.

For Parts A and B, whether FEHB or Medicare are the primary or secondary payers depends on your individual situation, but having both payers on board may be able to save you money on your share of your healthcare costs.

Does my spouse have to sign up for Medicare if I have FEHB?

No. Medicare is not mandatory for anyone, and the decision about whether to enroll in an individual one — even for spouses. Just keep in mind that penalties may apply for you or your spouse if you don’t sign up when you are first eligible. Your FEHB plan will continue to cover your spouse once you become eligible for Medicare.

The Federal Employee Health Benefit plan is a health insurance program for federal employees, their spouses, and dependents up to age 26. You can search available plans by zip code to find the right fit for your healthcare needs. There are a variety of plan options, including:

• Consumer-driven plans
• High-deductible plans
• Health savings and reimbursement accounts
• Lower premium plans
• Fee-For-Service (FFS) plans
• Preferred Provider Organization (PPO) plans
• Health Maintenance Organization (HMO) plans

Like most private insurance plans and Medicare, the FEHB covers inpatient and outpatient medical costs, like:

• Routine physician appointments
• Lab testing
• Specialist visits
• Prescription medications
• Inpatient care
• Surgery
• Maternity services

It is similar to other health insurance plans offered to employees by their employers, only in this case the employer is the federal government.