Federal Employees Health Benefits (FEHB) and Medicare Coordination

The Federal Employees Health Benefits (FEHB) Program provides health insurance to federal employees, retirees, and their families. When a participant becomes eligible for Medicare, the interaction between FEHB and Medicare is called coordination of benefits. Understanding how the two programs work together helps you avoid gaps in coverage, reduce outofpocket costs, and keep your claims process smooth.

Why Coordination Matters

Both FEHB and Medicare can cover many of the same serviceshospital stays, physician visits, prescription drugs, and preventive care. Without coordination, you might submit a claim to both plans and be asked to repay one of them, or you could receive delayed reimbursement. Coordination establishes a clear order of payment and determines which plan is the primary payer and which is secondary.

Key Concepts

• Primary payer: The plan that pays first.
• Secondary payer: Pays after the primary payer has processed the claim.
• Creditable coverage: A plan that meets Medicares minimum standards, which is required to avoid a penalty when you later enroll in Medicare PartB.
• Late enrollment penalty: A surcharge applied if you do not enroll in Medicare when first eligible and lack creditable coverage.

When Does Medicare Become Primary?

Generally, Medicare becomes the primary payer when the FEHB participant is entitled to Medicare PartA (hospital insurance) or PartB (medical insurance) and the FEHB plan does not provide creditable prescription drug coverage. The most common scenarios are:

• Federal retirees who are 65 or older.
• Federal employees who become disabled and receive Social Security Disability Insurance (SSDI) for 24 months.
• Survivors who receive survivor benefits based on a deceased federal employees service.

How Coordination Works

1. Hospital and Medical Services (PartA & PartB)

1. Medicare pays first for covered services.
2. FEHB receives the Medicare Explanation of Benefits (EOB) and pays the remaining eligible amount, up to the plans limits.
3. If the FEHB plan is creditable, you can keep your FEHB coverage without paying a PartB penalty.

2. Prescription Drugs (PartD)

1. If the FEHB plan offers a creditable prescription drug benefit, you can remain in FEHB without enrolling in Medicare PartD.
2. If the FEHB drug benefit is not creditable, you must enroll in a Medicare PartD plan or face a lateenrollment penalty.
3. When you have both Medicare PartD and a creditable FEHB drug plan, Medicare is primary for covered drugs, and the FEHB plan pays any remaining eligible costs.

Steps to Ensure Proper Coordination

1. Check your FEHB plans creditable status. Look for a statement on your Summary Plan Description (SPD) or ask your plan administrator.
2. Enroll in Medicare when youre first eligible. If your FEHB coverage is not creditable, enroll in PartB and PartD to avoid penalties.
3. Notify your FEHB plan of your Medicare enrollment. Provide a copy of your Medicare card and the effective date.
4. Keep records of all EOBs. When Medicare processes a claim, forward the EOB to your FEHB plan so they can submit the secondary claim.
5. Review your claims regularly. Verify that both Medicare and FEHB have paid the correct amounts.

Common Questions

Do I have to drop my FEHB coverage when I enroll in Medicare?

No. Federal law prohibits the removal of FEHB coverage because you become eligible for Medicare. You may keep both plans, and they will work together as described above.

Will I pay higher premiums because of coordination?

Premiums for FEHB do not automatically increase due to Medicare enrollment. However, if you add a Medicare PartD plan, youll have an additional premium for that plan.

What if I move to another state?

FEHB plans are national, so your coverage travels with you. Medicare rules are the same nationwide, so coordination continues without interruption.

Can I have both a creditable FEHB drug plan and a Medicare PartD plan?

Yes. When you have both, Medicare pays first for covered drugs, and the FEHB plan may cover remaining costs, subject to its own formulary and limits.

Resources

• OPM FEHB Overview
• Medicare Official Site
• CMS Medicare Coordination Guides
• FEHB Plan Summaries (creditable status)

Bottom Line

Coordination between FEHB and Medicare is designed to provide continuous, comprehensive coverage while preventing duplicate payments. By confirming your FEHB plans creditable status, enrolling in Medicare when required, and keeping both insurers informed, you can maximize benefits and minimize outofpocket expenses.