Reg Jones Expert's View

Last week I explained the five-year rule, which determines your eligibility to carry your FEHB coverage into retirement. And I pointed out the circumstances under which that requirement might be waived. This time I want you to answer the following questions. Are they true, sometimes true, or false?

  1. As a retiree, you will receive full FEHB coverage throughout your retirement.
  2. The amount of your health benefits coverage depends on the number of years you were employed by the federal government.
  3. As a retiree, you will only receive full FEHB coverage until you reach age 65.
  4. If you are eligible for Medicare, your FEHB benefits will be reduced and Medicare will pick up the difference.

Statement one is true. Health benefits plans in the FEHB are required to provide the same level and kinds of coverage to employees, retirees, and survivors. No differences are permitted because of such things as age, sex, employment status, length of service, or eligibility for Medicare. Because of that, statements two and three are also clearly false.

Statement four is also false, but for a different reason than the one cited. While your FEHB benefits won’t be reduced, if you are retired and eligible for Medicare, Medicare will become the primary payer of your medical bills and your FEHB plan will become the secondary payer, but only where both provide the same benefit. However, if Medicare provides a benefit that your plan doesn’t, it becomes the sole payer; and if your plan provides a benefit that Medicare doesn’t, it becomes the sole payer. A familiar example is prescription drug coverage. Unless you’ve elected to enroll in Medicare Part D at your own expense, your sole source of coverage and payment will be your FEHB plan.

Mention of Part D reminds me that I need to remind you that as an employee, you are already paying for Medicare Part A (Hospital) coverage. When you reach age 65, those benefits will be provided at no further cost to you. On the other hand, if you want to be covered by Medicare Part B (Medical), you’ll have to pay for that out of your own pocket. The same is true of Medicare Part D (Prescription Drugs). Medicare Part C (Medicare Advantage Managed Care) is available to retirees who are enrolled in both Medicare Part A and B, and is available through private insurers. Federal retirees wishing to enroll in Medicare Part C are permitted to suspend their FEHB enrollment and may reenroll during any open season or if their provider stops providing coverage.

Come back next week and learn whether your widow(er) will be eligible to continue FEHB coverage, and under what conditions.