Federal employees and retirees covered by FEHB face Medicare decisions most private-sector workers never have to make. This guide covers the rules: active-employee delay rights, what happens at retirement, and the suspend-vs-cancel question that trips up many annuitants.
In this guide
The FEHB-Medicare relationship turns on four decisions, each with different stakes. The sections below walk through them in the order they come up: what active employees can do, what changes at retirement, how the two plans coordinate when you keep both, and how suspension works.
Active federal employees with FEHB: delaying Medicare Part B
While you are still working, FEHB counts as current employer coverage for Medicare purposes, per the Office of Personnel Management (OPM). That means you can delay enrolling in Part B past age 65 without owing the Part B late-enrollment penalty.U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/
The mechanics work like this: you skip Part B during your Initial Enrollment Period (the seven-month window around your 65th birthday) and stay on FEHB. When you retire, you get an 8-month Special Enrollment Period to sign up for Part B without penalty. That window starts when your employment ends or your FEHB coverage through active employment ends, whichever comes first. Social Security describes it as starting the month after, so count from the earlier date and do not file a month late. This Special Enrollment Period does not apply if you're eligible for Medicare based on End-Stage Renal Disease (ESRD).Centers for Medicare & Medicaid Services. (n.d.). When does Medicare coverage start?. medicare.gov. Retrieved Aug 9, 2026, from https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
Two things to watch:
- FEHB as a retiree does not extend the SEP. The protection applies only to active employment. Once you separate from federal service, you have eight months and no more.Centers for Medicare & Medicaid Services. (n.d.). When does Medicare coverage start?. medicare.gov. Retrieved Aug 9, 2026, from https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
- Part A is different. Most federal employees can enroll in Part A at 65 premium-free (see below), and premium-free Part A carries no late-enrollment penalty. A Part A penalty may apply only to people who do not qualify for it free and have to buy it. For most federal retirees, the penalty risk is specific to Part B.Centers for Medicare & Medicaid Services. (n.d.). Avoid late enrollment penalties. medicare.gov. Retrieved Jul 15, 2026, from https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties
At retirement: Part A, Part B, and the cost picture
Part A: usually free
Most federal employees qualify for premium-free Part A because they paid Medicare taxes for at least 40 quarters (10 years) of covered employment. If you spent most of your career in federal service, you almost certainly qualify.Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Aug 7, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
If you have fewer than 40 work quarters across all jobs, Part A is available for purchase: $311/month in 2026 with 30-39 quarters, or $565/month with fewer than 30. CMS gives the reduced $311 rate to people who had at least 30 quarters of coverage or were married to someone with at least 30, so check a spouse's record before you assume the higher figure applies.Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Aug 7, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
Part B: the decision
Part B costs $202.90/month in 2026 (standard premium). Higher earners pay more via the Income-Related Monthly Adjustment Amount (IRMAA), a surcharge based on your tax return from two years earlier. It kicks in above $109,000 in income for single filers ($218,000 for joint filers).Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Aug 7, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
Whether to take Part B at retirement is one of the most common questions federal retirees face. The answer depends on your FEHB plan's costs and benefits. The general analysis:
- If your FEHB plan has low premiums and strong outpatient coverage, the marginal value of Part B may be limited.
- If your FEHB plan is expensive or has significant cost-sharing, Part B often more than pays for itself through the primary-secondary coordination described below.
- Once you delay past the 8-month SEP, you're locked out until the General Enrollment Period (January 1 through March 31 each year), and a Part B late penalty may apply going forward.Centers for Medicare & Medicaid Services. (n.d.). When does Medicare coverage start?. medicare.gov. Retrieved Aug 9, 2026, from https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start,Centers for Medicare & Medicaid Services. (n.d.). Avoid late enrollment penalties. medicare.gov. Retrieved Jul 15, 2026, from https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties
How FEHB and Medicare coordinate for federal employees
When a retired federal employee holds both FEHB and Medicare, Medicare pays primary and FEHB pays secondary, per the Medicare Coordination of Benefits rules (who pays first). This ordering applies regardless of which plan you enrolled in first.U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/,Centers for Medicare & Medicaid Services. (n.d.). Who pays first?. medicare.gov. Retrieved Jul 15, 2026, from https://www.medicare.gov/health-drug-plans/coordination/who-pays-first
In practice, the sequence works like this:
- Medicare processes the claim and pays its share (for most outpatient services, 80% of the Medicare-approved amount after the Part B deductible, leaving the standard 20% coinsurance).Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Aug 7, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
- FEHB receives the remainder and pays its share as the secondary plan.
- You pay any residual amount not covered by either.
For most covered services, the result is that out-of-pocket costs approach zero. Medicare covers the bulk of the bill; FEHB handles the deductibles and coinsurance Medicare leaves behind.
What it costs. You pay both your FEHB premium and the Part B premium ($202.90/month in 2026). For many federal retirees, particularly those on higher-cost FEHB plans, the combined cost can be significant. Whether the savings on out-of-pocket care justify it depends on your plan and how much care you use.Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Aug 7, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
| Option | Monthly cost | Out-of-pocket exposure | FEHB access later |
|---|---|---|---|
| Keep both (FEHB + Part B) | FEHB premium + $202.90 Part B | Near-zero for covered services | Continuous |
| Suspend FEHB, enroll in Medicare Advantage | $202.90 Part B + any MA plan premium (many MA plans charge none) | Varies by MA plan; capped at $9,250 in-network | Reversible at next Open Season or qualifying life event |
| Keep FEHB only (Part B declined) | FEHB premium only | Standard FEHB cost-sharing; no Medicare primary-payer benefit | Continuous |
| Cancel FEHB | Part B + Medigap/MA costs | Depends on coverage chosen | Permanent loss of FEHB access |
Suspending FEHB: what reversible means
A federal retiree who enrolls in a non-FEHB Medicare Advantage plan can suspend FEHB enrollment rather than canceling it. Suspension lets you stop paying the FEHB premium while keeping the right to re-enroll later.U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/
Under OPM rules documented at opm.gov/healthcare-insurance/medicare, suspension is available to annuitants who are enrolled in one of the following (you file OPM form RI 79-9 to suspend):
During suspension, you are not covered by FEHB. You can re-enroll during the next FEHB Open Season (each fall) or when you experience a qualifying life event (such as involuntarily losing your Medicare Advantage plan).U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/
OPM Medicare Advantage plans for federal retirees
OPM has negotiated Medicare Advantage plans designed specifically for federal retirees. These plans are structured to work alongside or in place of traditional FEHB coverage.
Key features of OPM MA plans for federal retirees:
- They combine Medicare Parts A and B benefits with supplemental coverage designed to fit FEHB annuitants.
- Many FEHB-sponsored MA plans reimburse part of your Part B premium, but the amount is set by each plan each year, so check the plan's own brochure (Section 9) or OPM's plan comparison tool for the figure. These plans require you to stay enrolled in the FEHB plan rather than suspend it. Suspending FEHB is a separate path, available only when you join a non-FEHB Medicare Advantage plan, Medicaid, TRICARE, or CHAMPVA.U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/
- Like other Medicare Advantage plans, they include an in-network out-of-pocket maximum (federally capped at $9,250 in 2026).Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Aug 7, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
The specific plan offerings change annually. Review available options each fall during FEHB Open Season and the Medicare Advantage Annual Enrollment Period (October 15 through December 7).Centers for Medicare & Medicaid Services. (n.d.). Open Enrollment. medicare.gov. Retrieved Sep 2, 2026, from https://www.medicare.gov/health-drug-plans/open-enrollment
FEHB is not Medigap
A common confusion: FEHB and Medigap (Medicare Supplement Insurance) are different things that play different roles.
Medigap is a private supplemental policy sold to fill Original Medicare's gaps. It has no connection to employment. Federal retirees who keep FEHB do not need Medigap, because FEHB serves the same secondary-payer function. Many FEHB plans even waive their own deductibles, coinsurance, and copayments once Medicare is primary.U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/
The practical difference matters in one specific way: Medigap has a one-time open enrollment window, and buying it outside that window may require medical underwriting. FEHB, as employer-sponsored group coverage, does not have that restriction. This gives federal retirees more flexibility than the general Medicare population when deciding how to structure their coverage.
For a comparison of Medicare Advantage versus Original Medicare more broadly, see the guide at /medicare/original-vs-advantage.
Frequently Asked Questions
Can I delay Part B past 65 without a penalty as a federal employee?
Yes, as long as you remain actively employed and covered by FEHB. FEHB qualifies as current employer coverage for Medicare purposes. Your 8-month Special Enrollment Period begins when you retire or lose your active-employment FEHB coverage, whichever comes first, and Social Security describes it as beginning the month after, so count from the earlier date. This Special Enrollment Period does not apply if you're eligible for Medicare based on End-Stage Renal Disease (ESRD). If you miss that window, you'll face the standard Part B late penalty: a permanent 10% increase for each full 12-month period you went without Part B.Centers for Medicare & Medicaid Services. (n.d.). When does Medicare coverage start?. medicare.gov. Retrieved Aug 9, 2026, from https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start,Centers for Medicare & Medicaid Services. (n.d.). Avoid late enrollment penalties. medicare.gov. Retrieved Jul 15, 2026, from https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties
What happens to my FEHB coverage when I retire?
You keep it, as long as you were enrolled in FEHB continuously before retirement (OPM publishes the specific continuity requirement, so confirm through your personnel office or at opm.gov). Coverage continues into retirement as an annuitant, and OPM deducts the premium from your federal annuity. At that point you become eligible to suspend FEHB when enrolling in a qualifying Medicare plan.
Do I have to take Medicare if I have FEHB?
No. Medicare enrollment is voluntary, and FEHB alone can serve as your health coverage. However, if you decline Part B at retirement and later want it, you'll owe a permanent late penalty unless you qualify for a Special Enrollment Period or a Medicare Savings Program. Most federal retirees with standard-cost FEHB plans find that enrolling in Part A (free for most) and Part B makes financial sense once they are no longer actively employed.U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/,Centers for Medicare & Medicaid Services. (n.d.). Avoid late enrollment penalties. medicare.gov. Retrieved Jul 15, 2026, from https://www.medicare.gov/basics/costs/medicare-costs/avoid-penalties
Is FEHB primary or secondary to Medicare at retirement?
At retirement, Medicare pays primary and FEHB pays secondary for most services. This is the reverse of the active-employment situation, where the employer plan pays primary for groups of 20 or more employees.U.S. Office of Personnel Management. (n.d.). Active Federal Employee - Medicare - OPM. opm.gov. Retrieved Jul 24, 2026, from https://www.opm.gov/healthcare-insurance/medicare/active-federal-employee/,Centers for Medicare & Medicaid Services. (n.d.). Who pays first?. medicare.gov. Retrieved Jul 15, 2026, from https://www.medicare.gov/health-drug-plans/coordination/who-pays-first
What if my FEHB Open Season and Medicare AEP don't line up?
They largely overlap. FEHB Open Season and Medicare's Annual Enrollment Period (October 15 through December 7) both run in the fall. You can coordinate changes to both plans during the same annual window. If you lose coverage outside that window, be careful about which program you are asking about. Losing FEHB as an annuitant is retiree coverage ending, and retiree coverage ending opens no Special Enrollment Period for Part B: only coverage based on current employment does that, which is why your eight-month window runs from the day you separate from federal service and not from the day FEHB stops. Losing other coverage can open a Special Enrollment Period to join or change a Medicare Advantage or Part D plan, which is a different window doing a different job, and FEHB has its own qualifying life events for re-enrolling after a suspension.Centers for Medicare & Medicaid Services. (n.d.). When does Medicare coverage start?. medicare.gov. Retrieved Aug 9, 2026, from https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start,Centers for Medicare & Medicaid Services. (n.d.). Open Enrollment. medicare.gov. Retrieved Sep 2, 2026, from https://www.medicare.gov/health-drug-plans/open-enrollment
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The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.