If you’re a federal employee or retiree, Medicare eligibility raises a lot of questions that don’t have obvious answers. Do you need Part B if you already have FEHB? Will enrolling change your FEHB premium? Can you drop FEHB and come back later if a Medicare Advantage plan doesn’t work out?
For most people covered by the Federal Employees Health Benefits (FEHB) Program, Medicare Part B is optional. Active federal employees may be able to delay Part B while FEHB remains their primary coverage, and retirees have to decide whether the additional coverage and potential reduction in out-of-pocket costs are worth the Part B premium. The rules are different for some Postal Service Health Benefits (PSHB) annuitants, who may be required to enroll in Part B to maintain PSHB coverage.
This guide walks through how FEHB and Medicare fit together, based on the Office of Personnel Management’s current guidance, so you can make an informed decision whether you’re still working or already retired.
Medicare Basics for Federal Employees
Medicare and FEHB(opens in new tab) can provide different layers of health coverage. Medicare is federal health insurance available at age 65, or earlier if you have a qualifying disability, End-Stage Renal Disease, or ALS. It’s made up of several parts, each covering a different type of care:
- Part A (hospital insurance) covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health care.
- Part B (medical insurance) helps pay for doctor visits, outpatient services, ambulance transportation, medical equipment and supplies, and select preventive care.
- Part D is prescription drug coverage, offered through Medicare-approved private plans.
- Medicare Advantage (Part C) combines Part A and Part B coverage through a private plan approved by Medicare and often includes prescription drug coverage and additional benefits.
Most federal retirees qualify for premium-free Part A. According to CMS, approximately 99% of Medicare beneficiaries do not pay a Part A premium because they or their spouse have sufficient Medicare-covered work history. Part B carries a monthly premium that’s typically deducted from Social Security benefits. Federal annuitants who aren’t receiving Social Security may be able to have the premium deducted from their federal annuity instead.
How FEHB and Medicare Work Together
Becoming eligible for Medicare doesn’t affect your FEHB eligibility, and the two programs are designed to coordinate rather than one replacing the other. (Whether you can carry FEHB into retirement at all is a separate question, governed by OPM’s five-year continuous enrollment rule(opens in new tab), and has nothing to do with Medicare.) When Medicare becomes your primary payer, many FEHB plans waive some deductibles, coinsurance, and copayments for Medicare-covered services. The details vary by carrier, so check your plan’s brochure before assuming a particular cost will be waived.
Federal annuitants who are enrolled in Medicare may have two additional options available through their FEHB plan:
- Medicare drug benefits accessed through your FEHB plan, which provide Part D coverage and may include benefits such as a $35 monthly cap on covered insulin products and an annual limit on out-of-pocket Part D drug costs. If your FEHB plan offers Medicare drug benefits and you’re eligible for Part D, the plan may automatically enroll you at no additional premium for the drug benefit.
- Medicare Advantage plans accessed through your FEHB plan, which cover what Parts A and B cover and may include additional benefits such as dental, vision, and hearing coverage, along with prescription drug coverage.
There’s also an important point for federal employees and retirees who are wondering whether they need a separate Part D plan: FEHB prescription drug coverage is considered creditable coverage(opens in new tab). As long as you maintain FEHB coverage, you generally can defer enrolling in Medicare Part D without incurring the Part D late-enrollment penalty.
If you’re a U.S. Postal Service employee or retiree, you’re covered under the Postal Service Health Benefits (PSHB) Program rather than standard FEHB. PSHB is part of the FEHB Program, so many of the general coordination rules discussed here also apply. However, PSHB has important additional Medicare requirements. Certain Medicare-eligible Postal Service annuitants and their Medicare-eligible family members must enroll in Medicare Part B(opens in new tab) to remain enrolled in PSHB, subject to several statutory exceptions. Medicare-eligible PSHB annuitants should review OPM’s PSHB rules separately before making an enrollment decision.
How to Enroll in Medicare When You Have FEHB
Enrollment works differently depending on which piece of Medicare you’re signing up for. Here’s a quick-reference breakdown:
| If you want to enroll in… | How to find a plan | How enrollment happens |
|---|---|---|
| Medicare drug benefits through your FEHB plan | FEHB plan comparison tool or plan brochure | Automatic if your FEHB plan offers Medicare drug benefits and you’re eligible for Part D; you generally have the option to opt out |
| Medicare Advantage through your FEHB plan | FEHB plan comparison tool or plan brochure | You contact the plan directly |
| Medicare Part A & B | N/A | Generally automatic if you’re already receiving Social Security or Railroad Retirement Board benefits when you become eligible; otherwise sign up through Social Security |
| Medicare Part D (standalone) | Medicare Plan Finder | You enroll directly |
| Medicare Advantage (standalone, not through FEHB) | Medicare Plan Finder | You enroll directly |
A few points are worth flagging. You must have Part A and Part B before you can enroll in a Medicare Advantage plan, whether that’s a standalone plan or one accessed through FEHB. And no matter which route you take, tell your FEHB plan when you enroll in Medicare(opens in new tab) so your benefits are coordinated correctly.
It’s worth telling Medicare about your other coverage proactively, too, rather than waiting for a billing problem to surface. You can contact Medicare’s Benefits Coordination & Recovery Center(opens in new tab) at 1-855-798-2627 any time your other health coverage changes, or if you have questions about which insurance should pay first. Keeping that information current helps Medicare and your FEHB plan route claims to the right payer from the start.
If you’re already receiving Social Security or Railroad Retirement Board benefits when you become eligible for Medicare, you’re generally automatically enrolled in Part A and Part B, with the option to decline Part B. If you aren’t receiving those benefits, you’ll generally need to sign up yourself through the Social Security Administration.
Timing matters. Your Initial Enrollment Period generally runs for seven months: it starts three months before the month you turn 65, includes your birthday month, and extends three months after. If you miss that window and don’t qualify for a Special Enrollment Period based on current employment coverage, you may have to wait for the General Enrollment Period, which runs January 1 through March 31 each year. Under current Medicare rules, coverage generally starts the month after you enroll during the General Enrollment Period(opens in new tab), and a late-enrollment penalty may apply.
Active federal employees have an important exception to keep in mind. Because FEHB based on current federal employment is generally primary to Medicare, OPM says an active employee can defer Part B until retirement(opens in new tab). A Special Enrollment Period may allow you to enroll after your employment or employer-sponsored coverage ends without the normal Part B late-enrollment penalty, provided you meet Medicare’s requirements.
What Changes When You Enroll in Medicare
A few practical effects are worth planning around:
- Your FEHB premium won’t change. Enrolling in Medicare doesn’t reduce or increase what you pay for FEHB coverage. However, some FEHB plans may reimburse some or all of a Medicare-enrolled annuitant’s Part B premium, so check your plan brochure.
- Your Part B premium may be income-adjusted. Most beneficiaries pay the standard Part B premium, while higher-income beneficiaries pay an additional Income-Related Monthly Adjustment Amount, or IRMAA. For 2026, the standard Medicare Part B premium is $202.90 per month(opens in new tab). Higher-income beneficiaries can pay substantially more, depending on their modified adjusted gross income and tax-filing status.
- HSA contributions must stop once you’re enrolled in Medicare. This requires special planning if you delay Medicare past age 65 because premium-free Part A can become retroactive. According to the Medicare & You handbook(opens in new tab), premium-free Part A can generally be retroactive for up to six months when you sign up after age 65, but not earlier than the first month you were eligible. If you’re delaying Medicare and continuing to contribute to an HSA, make sure you stop contributions far enough in advance to avoid making contributions for months in which Part A later becomes retroactively effective.
- You can only hold one Part D or Medicare Advantage plan at a time. Enrolling in Medicare drug benefits or a Medicare Advantage plan through FEHB can cause you to lose coverage under a separate Part D or Medicare Advantage plan, so check with your FEHB carrier before making a change.
Your FEHB Options Once You Have Medicare
Becoming eligible for Medicare is a qualifying life event, which gives you a one-time opportunity to change your FEHB enrollment beginning 30 days before you become eligible for Medicare. Beyond that initial opportunity, you have several options:
- Switch FEHB plans. Some plans waive deductibles, coinsurance, and copayments once Medicare becomes primary, and some plans offer Part B premium reimbursements to Medicare-enrolled annuitants. It’s worth comparing options rather than assuming your current plan is still the best fit.
- Suspend FEHB coverage. If you’re an annuitant and enroll in a qualifying Medicare Advantage plan outside FEHB, you may be able to suspend FEHB and retain the right to re-enroll later, including during Open Season or following an applicable qualifying life event.
- Cancel FEHB coverage. This is generally a one-way door for annuitants. If you cancel FEHB as an annuitant, you generally cannot re-enroll later.
There’s an important distinction between suspending and canceling coverage. If you want to preserve your ability to return to FEHB after enrolling in a qualifying Medicare Advantage plan, consult your retirement system about formally suspending FEHB(opens in new tab). Simply canceling your FEHB enrollment is not the same thing and generally eliminates your right to re-enroll.
If you elect a Medicare Advantage plan accessed through your FEHB plan itself, you do not need to suspend FEHB. You remain enrolled in your FEHB plan while receiving the Medicare Advantage benefits offered through it.
Which Situation Fits You?
The way FEHB and Medicare work together depends significantly on whether you’re still working or already retired:
- Active federal employees can enroll in Medicare while still working, but FEHB based on current federal employment generally remains the primary payer. Because of that, OPM specifically notes that active employees may choose to defer Part B until retirement rather than pay an additional premium while FEHB remains primary.
- Federal annuitants generally have Medicare become the primary payer for Medicare-covered services, with FEHB coordinating as secondary coverage. Some FEHB plans waive certain cost-sharing when Medicare is primary and may reimburse some or all of the Part B premium.
- PSHB annuitants follow many of the same coordination rules, but Medicare enrollment plays a more central role. Medicare Part B is required for certain PSHB annuitants and Medicare-eligible family members(opens in new tab) unless they qualify for an exception. Medicare-eligible PSHB annuitants are also generally automatically enrolled in the Medicare drug benefits provided through their PSHB plan.
Download FEHB and Medicare companion guide
Download the FEHB and Medicare companion guide — a 3-page PDF with an enrollment checklist organized by your situation (active employee, newly Medicare-eligible annuitant, or PSHB annuitant) plus a one-page “who pays first” reference chart you can keep on hand. Download the checklist and chart(opens in new tab) (PDF).
Before making any change, review your FEHB or PSHB plan brochure’s Medicare coordination provisions and compare the premiums, cost-sharing, prescription coverage, provider access, and benefits that apply to your particular situation. For the government’s full explanation, OPM’s Medicare and FEHB guidance(opens in new tab) is a useful starting point.
Additional Official Resources
Beyond OPM’s Medicare guidance, several other government resources are worth bookmarking:
- The Medicare & You handbook(opens in new tab), CMS’s official annual guide covering Medicare benefits, costs, rights, enrollment rules, and plan options.
- Medicare’s coordination of benefits guidance(opens in new tab), which explains how Medicare determines which insurance pays first when you have other health coverage.
- The Medicare Plan Finder(opens in new tab), for comparing standalone Part D and Medicare Advantage plans.
- Medicare’s current Medicare costs(opens in new tab) page, for current premium, deductible, and coinsurance figures.
- The Social Security Administration’s Medicare enrollment information(opens in new tab), for signing up for Medicare Part A and Part B.
- OPM’s FEHB plan comparison tool(opens in new tab), for comparing available FEHB plans and reviewing how individual plans coordinate with Medicare.