This is the third of a series of columns presenting the topic of federal employees and Medicare and discusses the coordination between the Federal Employees Health Benefits (FEHB) group health insurance program and Medicare benefits.
Medicare and FEHB for Federal Employees
Medicare law and regulations determine whether Medicare or a FEHB plan an employee or annuitant is enrolled in is considered as primary coverage. That is, whether Medicare pays an employee’s or annuitant’s hospital or doctor bills first. Medicare automatically transfers claims information to the employee’s or annuitant’s FEHB health insurance plan once Medicare processes a claim.
Therefore, an employee or annuitant need not file a claim with both. The employee or annuitant will receive an Explanation of Benefits (EOB) from the FEHB program plan and a Medicare Summary Notice (MSN) from Medicare.
An individual’s FEHB program plan must pay benefits first when the individual is an active federal employee or reemployed annuitant, and either the individual or the individual’s covered spouse has Medicare. The individual’s FEHB health insurance plan must also pay benefits first when the individual is under age 65, entitled to Medicare on the basis of disability, and covered under FEHB based on the individual or the individual spouse’s employment status.
Medicare must pay benefits first when an individual is a federal annuitant, unless the individual is a reemployed annuitant, and either the individual or the individual’s covered spouse is enrolled in Medicare.
Those federal employees with FEHB program health insurance and who continue to work in federal service past age 65 will have their FEHB program health insurance as primary coverage for all medical expenses, including hospital and doctor expenses.
Retired federal employees with FEHB program health insurance coverage who are also enrolled in Medicare, and are also covered through a spouse’s health insurance policy will have their medical expenses paid first by the spouse’s health insurance policy, with Medicare paying secondary and the federal annuitant’s FEHB plan paying tertiary.
FEHB premiums will not change when an annuitant enrolls in Medicare. But an annuitant can change his or her FEHB enrollment to any available plan, beginning 30 days before the annuitant becomes eligible for Medicare. This enrollment change opportunity may be used only once.
FEHB enrollment may also be changed during the annual open season or because of another event that permits enrollment changes (such as a change in family status).
Once Medicare becomes the primary payer of a federal annuitant’s medical expenses, the annuitant may find that a lower cost FEHB plan is adequate for the annuitant’s medical needs. Some FEHB plans waive deductibles, coinsurance and copayments when Medicare is primary.
Those annuitants who are enrolled in a FEHB program-sponsored HMO can also be enrolled in Medicare Parts A and B. If the annuitant wants the FEHB program-sponsored HMO to cover the Medicare deductibles, coinsurance and other services not covered by Medicare, the annuitant must use the HMO’s participating provider network to receive services and get the required referrals for specialty care.
The HMO will pay the portion not paid by Medicare for covered services. However, the annuitant will still pay the HMO’s required copayments. Some HMO’s waive payment of their copayments and deductibles when Medicare is primary.
A previous column discussed the Medicare Advantage Plans which are expanded HMOs with access to dental and vision care, both of which are not covered to much extent by Medicare Part B. A federal annuitant who is enrolled in Medicare Parts A and B has the option of enrolling in a Medicare Advantage Plan. In that case, the annuitant may not need FEHB program coverage because the Medicare Advantage plan will provide the annuitant with many of the same benefits.
An annuitant who is contemplating whether to suspend or cancel FEHB coverage should carefully review the Medicare Advantage Plan before suspending or canceling FEHB program coverage.
Those annuitants who decide to suspend their FEHB coverage in order to join a Medicare Advantage Plan may reenroll in the FEHB program if they later lose or cancel their Medicare Advantage plan coverage.
However, an annuitant would have to wait until the next FEHB program open season (held each year between the second Monday of November through the second Monday of December) to reenroll in the FEHB program.
The exception is when an annuitant involuntarily loses coverage under the Medicare Advantage (for example, the Medicare Advantage plan is discontinued or because the annuitant moves outside the Medicare Advantage plan’s service area). In that case, the annuitant may reenroll in a FEHB plan from 31 days before to 60 days after losing the Medicare Advantage plan, and the reenrollment in the FEHB program will be effective the day after the Medicare Advantage plan coverage ends (or ended).
Additional information about Medicare may be obtained by accessing the “Medicare and You” handbook. All Medicare enrollees receive a copy during the fall of each year. The handbook for 2021 can be downloaded here. Other information and Medicare, including Medicare Parts A and B, Medicare Advantage Plans and Medicare Prescription Drug Coverage may also be obtained and downloaded from the Medicare website.