Medicare and FEHB for Federal Employees (2026)

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.1

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 the month after your employment ends or your FEHB coverage through active employment ends, whichever comes first.2

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.2
• Part A is different. Most federal employees can enroll in Part A at 65 premium-free (see below), and there is no penalty for delaying it. The penalty risk is specific to Part B.4

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.3

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 30.3

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).3

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 applies going forward.2,4

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.1,5

In practice, the sequence works like this:

1. 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).3
2. FEHB receives the remainder and pays its share as the secondary plan.
3. 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.3

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.1

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):

• A non-FEHB Medicare Advantage plan
• Medicaid
• TRICARE or CHAMPVA

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).1

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 (commonly around $800 to $1,200 a year, varying by plan), but 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.1
• Like other Medicare Advantage plans, they include an in-network out-of-pocket maximum (federally capped at $9,250 in 2026).3

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).6

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.1

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.

Learn More

Find personalized help coordinating Medicare with your FEHB benefits at brevy.com.

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.