How FEHB and Medicare Work Together

There is a lot of overlap in Medicare coverage and Federal Employees Health Benefits, or FEHB, but they can be used together to coordinate that coverage. In most situations, you would have FEHB first since you attained it as a federal employee. You then become eligible for Medicare at 65, or younger if you have certain disabilities.

Your FEHB plan should have benefits that match or exceed that of Medicare, so the plans typically work together to coordinate costs and determine which plan pays first under different circumstances.

The greatest advantage to having both may be coordination of benefits, which should reduce your out-of-pocket costs. According to the U.S. Office of Personnel Management, coordination of benefits means that on top of the primary payer — FEHB or Medicare, depending on the situation — covering its benefits, the secondary payer will also a pay a reduced benefit. The combination of benefits can help decrease your costs.

Whether you need Medicare coverage on top of FEHB depends on your personal circumstances, the type of health coverage you are looking for and the type of Medicare being discussed.

If you are eligible for Medicare Part A, there is really no downside to signing up for it. Part A, which covers inpatient care and hospital stays, is available premium-free if you worked and paid Medicare taxes for 10 years. Since it’s available without a premium, you can receive additional coverage without out-of-pocket expenses. Part A can also help cover some costs that FEHB doesn’t, such as deductibles and coinsurance.

Things are a little more complicated for Part B, which covers outpatient care, treatments and services. Part B increases your costs with its monthly premiums, and it covers a lot of the same things that your FEHB plan probably already handles. But depending on your specific FEHB plan, there may be some services that Part B can help cover. In addition, FEHB can also waive costs like deductibles and coinsurance for Part-B-covered services.

If you have FEHB and Medicare, one is not automatically your primary payer. Either can pay first depending on the circumstances.

FEHB is typically the primary payer if you are still a federal employee. This is the case even if you qualify for and have Medicare before you turn 65. If you decide to keep working past 65 and enroll in Medicare, FEHB will still continue to pay first as long as you remain a federal employee.

If you are retired or no longer work in your federal job, then Medicare typically becomes the primary payer. This includes if you are over 65 or if you qualified for Medicare at a younger age. Once Medicare becomes the primary payer, your FEHB premiums will not change.

If you didn’t qualify for Part A and just have Part B, then Medicare will pay for any Part-B-covered treatments or services and FEHB will pay for anything else.

A Medicare Advantage plan, which covers everything in Original Medicare plus additional benefits, typically offers a similar level of coverage to FEHB plans. This means that it may not always make sense to have both. It’s best to explore both options since each Medicare Advantage plan offers different benefits.

Remember that in order to be eligible for Medicare Advantage, you must have both Part A and B. If you aren’t eligible for premium-free Part A, then you would have to pay for it to get Medicare Advantage.

If you do opt for a Medicare Advantage plan, you can cancel or suspend your FEHB coverage. But if you later decide to get off of your Medicare Advantage plan due to a change in coverage, location or some other factor, you can typically get back on your suspended FEHB plan.