How FEHB and Medicare Work Together During Retirement

Retirement marks a significant milestone in one’s life, bringing with it a new phase of exploration, relaxation, and more time for family and personal hobbies. Americans who are of retirement age also have another consideration at this pivotal turning point: healthcare coverage. For both active and retired federal employees, the Federal Employee Health Benefits (“FEHB”) program provides excellent coverage on its own. However, reaching retirement age means these employees also have the option of adding Medicare (Parts A, B, C, and/or D). That’s right, you can have both FEHB and Medicare at the same time! In this article, we’ll take a look at how these two programs work together to provide you with health insurance coverage. 

FEHB and Medicare: Partners in Retirement Health

The FEHB program has long been a pillar of healthcare coverage for federal employees and retirees. It offers a range of insurance plans tailored to diverse needs, providing flexibility and choice. However, as retirees reach the age of 65, Medicare enters the equation, introducing another layer of coverage. While these two programs might appear complex, their collaboration is designed to ensure comprehensive healthcare access and affordability.

Retirees who are eligible for both FEHB and Medicare should consider taking advantage of their available dual coverage. In practical terms, this usually means that Medicare typically becomes the primary payer for healthcare services covered by the program, while FEHB acts as the secondary payer, bridging any gaps left by Medicare coverage. This partnership can significantly reduce out-of-pocket costs, ensuring that retirees are better protected against unexpected medical expenses. Keep in mind that FEHB will remain your primary coverage until you retire. It is when you become an annuitant that Medicare turns into your default coverage, and FEHB will provide secondary coverage benefits. Should you choose to return to work after retirement, FEHB would once again be the primary provider. This situation only applies if you are a reemployed annuitant with the federal government.

Cost Sharing and Making Informed Decisions

Understanding cost-sharing between FEHB and Medicare is key to managing healthcare expenses in retirement. While both programs require premiums, deductibles, and other out-of-pocket expenses, their collaboration can result in significant savings. For instance, Medicare may cover services that FEHB plans don’t cover, and vice versa. Retirees can strategically plan to minimize their financial burden by understanding which program covers what. In most instances, having dual coverage means individuals pay much less out-of-pocket medical expenses, if any. 

Transitioning into retirement requires careful planning to ensure a seamless shift from active employment to retirement healthcare. Sometimes supplemental insurance may be needed, such as a Medigap plan, to further enhance coverage, but this is entirely dependent upon the individual. 

It’s important to note that the interaction between FEHB and Medicare can vary based on the specific FEHB plan chosen and the Medicare parts an individual has. Different FEHB plans may have varying levels of coordination with Medicare, so always be sure to carefully review the details of each plan’s benefits, coverage, and coordination options. 

Benistar will help you make informed decisions when choosing Medicare and FEHB plans for retirees. We work with the most reputable insurance carriers and all coverage is nationwide and guaranteed. Our trusted customer service team will help your retirees feel empowered with information so that everyone understands how Medicare and FEHB collaborate. At Benistar, we keep up with any and all changes that occur in the medical benefits arena, so you don’t have to. We are your one-stop insurance shop! 
Still have questions about FEHB and Medicare? Give us a call!

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