Dear Marci,

I’m a federal employee with medical coverage and am going to retire soon. Do I need to get onto Medicare to have primary health insurance?

-Natalia (San Jose, CA)

Dear Natalia,  

The quick answer is no. Employees covered under the Federal Employees Health Benefits (FEHB) program can keep their benefits after retirement if they’ve had FEHB for at least 5 years and the whole time they have been eligible for that coverage. Unlike other employer-based coverage, FEHB will continue to operate as a primary payer after your retirement if you don’t enroll in all or part of Medicare. However, declining Medicare Part B when you’re not covered as a result of current work means that you’ll likely owe a late enrollment penalty (LEP) if you enroll later. 

The decision to enroll in Medicare when you retire from federal employment depends on your unique circumstances and preferences. Here are your options: 

  • Keep FEHB and turn down Medicare. 
    • FEHB is unlike most other retiree coverage in that it can remain as your primary insurance if you don’t enroll in Medicare.
    • If you decide to do this, you might still want to enroll in Medicare Part A, while declining Part B, since Part A is premium-free for many. If you enroll in Medicare Part B later, you will likely have to pay a late enrollment penalty.  
  • Keep FEHB and enroll in Medicare Part A and Part B. 
    • You’ll have to pay both premiums.  
    • Medicare will be primary, and the FEHB plan will cover your deductibles and cost sharing. 
    • FEHB may cover some things that Medicare does not, and vice versa. 
    • Your FEHB drug coverage is creditable for Part D, and you will not need to enroll in a separate Part D plan.  
      • Note that FEHB drug coverage cannot be suspended separately from FEHB health coverage. If you want to keep your FEHB health coverage, you must keep drug coverage, even if you enroll in Part D.  
  • Disenroll from FEHB and enroll in Medicare.
    • Keep in mind that you may lose the option of signing up for FEHB again in the future. Speak to the office of Personnel Management (OPM) to learn more about your FEHB-specific rights and options. 

When you think about the pros and cons for each option, you might want to ask yourself the following questions: 

  • Which insurance do my providers (and providers I wish to see in the future) accept? 
  • What would be my costs for the health care services I use the most? 
  • Which option offers flexibility for the future if I need it? 

You can contact the U.S. Office of Personnel Management (OPM) if you’re a federal employee or retiree and want to learn more about your health benefits by calling 317-212-0454. 

Good luck deciding! 


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