At the age of 65, it’s mandated by federal law that FERS participants must make a crucial decision regarding Medicare enrollment. If you’re currently an active federal employee covered under FEHB or your spouse’s employer plan, you have the option to delay this decision without facing any penalties. However, the process can become intricate upon retirement, particularly if you still maintain FEHB coverage.
Medicare Part A offers premium-free inpatient hospital coverage and associated services, funded through payroll taxes. Opting for Medicare Part A is recommended by the OPM as it helps offset hospital-related costs such as FEHB deductibles, coinsurance, and expenses surpassing your FEHB plan’s allowable charges. It’s important to note that enrolling in Part A renders you ineligible to contribute to a Health Savings Account (HSA). Therefore, if you have HSA-qualified FEHB coverage and wish to continue contributing while employed, delaying enrollment in Part A is advised until Social Security benefits commence, triggering automatic Part A coverage.
Coordinating Medicare Part B (outpatient medical care) with FEHB can be beneficial. While enrolling in Part B entails a monthly premium, it covers services not typically provided by FEHB, including visits to doctors outside your HMO network. As such, maintaining both plans in retirement might offer more comprehensive coverage, especially considering the increasing premiums of Part B over time. Understanding the coordination between FEHB and Medicare coverage is essential.
Before reaching a decision, meticulously review your FEHB plan brochure. Some insurers may waive deductibles, co-pays, and coinsurance when you’re enrolled in Medicare Parts A and B, potentially allowing you to transition to a more cost-effective version of your current FEHB plan. Conversely, certain FEHB plans may provide coverage for services like dental and vision that Medicare doesn’t cover. It’s crucial to understand your plan’s provisions in Section 9 regarding its interaction with Medicare. Additionally, consult the FEHB and Medicare Fact Sheet on the OPM website for further guidance.
