The Federal Employee Health Benefit (FEHB) program provides health insurance to federal employees and their dependents. FEHB continues into retirement.

If you’re a federal employee looking toward retirement, you might be wondering how to make the best use of your federal health benefits once you become eligible for Medicare.

The Federal Employee Health Benefit (FEHB) program includes over 276 health insurance choices for federal employees. While some plans are only available for employees in certain roles, such as the military, most federal employees will have multiple options to choose from. FEHBs can cover spouses and children up to age 26 even during your retirement.

You may also be able to combine your Federal Employee Health Benefits (FEHBs) and Medicare to get more complete coverage and save money.

You have several different options for doing this. The combination that works best for you will depend on your personal circumstances, including your budget, health conditions, and the Medicare Advantage plans available in your area.

You can keep your FEHB plan after you retire as long as you meet a couple of requirements. The first is that you’ll need to go through the retirement process, not just quit your federal job. You won’t be able to keep your FEHB plan if you leave your job under any circumstances other than retirement.

The second requirement is that you must have been enrolled in your current FEHB plan for at least 5 years, or the entire period since you were first eligible to sign up.

So, if you don’t start a federal job until later in your career, you can retire sooner than 5 years and still keep your FEHB plan. For example, if you start a federal job at age 59 and sign up for an FEHB plan, you can keep it even if you retire at age 62.

In most cases, you can elect not to use your Medicare coverage and just keep using your FEHB plan. Medicare is an optional plan, meaning you don’t have to have either Part A or Part B coverage.

However, there is an exception. If you’re enrolled in TRICARE, an FEHB plan for military members, you’ll need to sign up for Original Medicare to keep your coverage.

If you have any other FEHB plan, the choice is up to you. You can decide what works best for your budget and needs. Keep in mind, however, that Medicare Part A is normally premium-free. Having Part A as extra coverage in the event of hospitalization is a good idea for most people since they have additional protection without paying higher costs.

While you don’t have to enroll in Part B during your initial enrollment period, if you decide you want it later, you’ll pay a fee for signing up late.

This rule only applies if you’re already retired when you become eligible for Part B. If you’re still working, you can enroll in Part B once you retire. You’ll have up to 8 months to enroll before you need to pay a late enrollment penalty. There is no late enrollment penalty for Part A.

You’ll be eligible for Medicare once you turn age 65. If you have health insurance from an FEHB plan, you can use it alongside Medicare. You can make a few combinations of Medicare and your FEHB plan, depending on your circumstances.

Understanding the parts of Medicare and how they work together is key to deciding if using FEHB and Medicare together is right for you.

Medicare Part A and FEHBs

Medicare Part A is hospital coverage. It provides coverage for stays in the hospital or at long-term care facilities. As long as you’ve worked for at least 10 years and earned enough Social Security work credits, Part A will be premium-free. This means you’ll have an extra layer of coverage without needing to pay any additional premium.

When you have Medicare and FEHBs, Medicare is the primary payer once you retire. While you’re still working, your FEHB plan will be your primary payer, and Medicare will kick in as a secondary. However, once you’ve retired, the primary payer will always be Medicare, and your FEHB plan will be secondary.

If you want to have Part A coverage along with your FEHB plan, you’ll need to enroll in Medicare. You can sign up as early as 3 months before your 65th birthday or as late as 3 months after. You’ll be automatically enrolled if you’re already retired and receiving benefits from Social Security or the Railroad Retirement Board.

Medicare Part B and FEHBs

Medicare Part B is medical insurance. It covers services such as doctor’s visits, preventive care, and certain medical equipment. Unlike Part A, most people do pay a premium for Part B.

In 2024, the standard Part B premium is $174.70. Your premium will be higher if your income is over $103,000 as an individual. You’ll pay this premium in addition to the premium of your FEHB plan if you use both together.

Even though you’ll be paying two premiums, using FEHBs and Part B together is often a good choice. Just like with Part A coverage, Medicare is the primary payer once you’ve retired. Medicare Part B pays 80% for covered services.

When you use Part B along with an FEHB plan, your FEHB plan may cover the 20% you’d be responsible for with Part B alone. Using an FEHB plan along with Medicare Part B works like having a Medicare supplement or Medigap plan. However, your FEHB plan will also pay for coverage that Medicare doesn’t.

Medicare Part C and FEHBs

Your options are slightly different if you’re considering a Medicare Part C or Medicare Advantage plan. Medicare Advantage plans cover all the services of Original Medicare and often add coverage for medications, vision care, dental care, and more.

You might not need your FEHB plan if you choose to enroll in a Medicare Advantage plan. Since a Medicare Advantage plan takes the place of Original Medicare and has more coverage, your FEHB plan might not provide much additional benefit.

Depending on your FEHB plan and on the Medicare Advantage plans available to you, Medicare Advantage might be more expensive than using Part B and FEHBs together.

Additionally, many Medicare Advantage plans use networks. This could mean you’d have to switch doctors and other specialists if you leave your FEHB plan for a Medicare Advantage plan.

If you choose to take a Medicare Advantage plan instead of your FEHB plan, you should suspend your FEHB plan instead of canceling. That way, you’ll be able to pick your FEHB plan back up in the future if your Medicare Advantage plan no longer works for you.

Medicare Part D and FEHBs

Medicare Part D provides prescription drug coverage. Original Medicare offers very limited prescription drug coverage, so adding Part D helps many beneficiaries pay for their medications.

All FEHB plans offer prescription coverage. So, if you’re keeping your FEHB plan along with Original Medicare, you don’t need a separate Part D plan.

Using FEHBs and Medicare together can cover your healthcare needs in retirement. Medicare will be the primary payer, and your FEHB plan will be the secondary payer.

Depending on your premium and any health conditions you have, subscribing to both plans could save you money in the long run. Medicare is optional unless you have TRICARE.

Your budget and circumstances will determine if keeping FEHBs and enrolling in Medicare makes sense for you.