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). To use it, OPM says your employing office (or, after you retire, your retirement system) completes form CMS-L564, Request for Employment Information, so ask for it with your retirement package.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,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/
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, the eight-month clock runs whether or not you keep FEHB.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. A spouse's work record can also make your Part A premium-free. Social Security determines your count, so check your record, and a spouse's, with them if you're unsure.Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Sep 4, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
If neither your own record nor a spouse's gets you premium-free Part A, it 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 Sep 4, 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 Sep 4, 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.
- If you miss the 8-month SEP, check first whether another Special Enrollment Period fits; one covers people whose employer or health plan gave them wrong information about enrolling in Part B on or after January 1, 2023. If none fits, you wait for 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). One exception: if you are rehired into federal service as a reemployed annuitant, FEHB pays first again for the period of reemployment (OPM notes narrow exceptions to that, such as a position excluded from FEHB). The order is also set person by person, so FEHB stays primary for a covered spouse who isn't on Medicare yet.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 Sep 4, 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.
Together the two often cover nearly all of the cost of covered services. Some FEHB plans also waive their own deductibles, coinsurance, and copayments when Medicare pays first; Section 9 of your plan's brochure explains how yours works with Medicare.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/
What it costs. You pay both your FEHB premium and the Part B premium ($202.90/month in 2026). OPM states your FEHB premium isn't reduced when you enroll in Medicare, so Part B is an added cost, not a swap.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/ 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 Sep 4, 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 | Often close to zero for covered services | Continuous |
| Suspend FEHB, enroll in Medicare Advantage | $202.90 Part B + any MA plan premium (some MA plans charge none) | Varies by MA plan; capped at $9,250 in-network | Suspended, not lost; ask your retirement office how to return |
| Keep FEHB only (Part B declined) | FEHB premium only | Standard FEHB cost-sharing, with no Part B paying first | 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 enrolled in a Medicare Advantage plan has the option to suspend FEHB rather than cancel it, according to OPM. Suspending keeps a route back into the program; canceling closes it for good.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's guidance on the mechanics is brief: it tells you to contact your retirement office to discuss suspending your enrollment. Before you act, get that office to tell you which form to file, the deadline for filing it, and which other coverage qualifies you to suspend. Ask, too, when and how you could bring FEHB back, for example if your Medicare Advantage plan leaves your area.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/
Comparing plans: Part B reimbursement and Medicare Advantage
Some FEHB plans offer annuitants reimbursement for Part B premiums, OPM says, 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. Active employees get no such reimbursement, because FEHB pays first while you're working.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/
Two more things to know when you compare plans:
- Beginning 30 days before you become eligible for Medicare, you can switch to any available FEHB plan or option, but OPM allows that change only once. After that, changes wait for Open Season or a qualifying life event.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/
- Medicare Advantage plans carry an in-network out-of-pocket maximum (federally capped at $9,250 in 2026, and a plan may set a lower one).Centers for Medicare & Medicaid Services. (2026). 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov. Retrieved Sep 4, 2026, from https://www.cms.gov/newsroom/fact-sheets/2026-medicare-parts-b-premiums-deductibles
The specific plan offerings change annually. Review your options during FEHB Open Season (OPM posts its dates each year) and Medicare's fall Open 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. A federal retiree who keeps FEHB already has a plan paying second behind Medicare, the role Medigap would otherwise play, and some FEHB plans 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 timing rules differ too. Medigap's open enrollment is a one-time 6-month window, and after it you may not be able to buy a policy, or it may cost more.Centers for Medicare & Medicaid Services. (n.d.). Get Medigap Basics. medicare.gov. Retrieved Jul 17, 2026, from https://www.medicare.gov/health-drug-plans/medigap/basics FEHB's hard limit is cancellation: an annuitant who cancels can never re-enroll.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/
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 and no other Special Enrollment Period fits, you may owe the Part B late penalty: a 10% increase for each full 12-month period you could have had Part B but didn't, for as long as you have 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?
Whether you can carry it into retirement depends on OPM's eligibility rules, so confirm with your personnel office or at opm.gov that you meet them before you retire. OPM warns active employees that canceling FEHB may risk their eligibility to keep it in retirement. Your premium doesn't drop once Medicare starts: retirees pay the same FEHB premium as active employees. And once you're an annuitant in a Medicare Advantage plan, suspending FEHB becomes an option.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/
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, OPM warns that if you wait 12 months or more after first becoming eligible, your Part B premium goes up 10% for each 12 months you could have had it, for as long as you have Part B, unless you qualify for a Special Enrollment Period or a Medicare Savings Program. Drugs are different: FEHB's drug coverage is creditable, so deferring Part D while you keep FEHB carries no Part D 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/,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 active employment, when FEHB pays first. A reemployed annuitant is the exception: FEHB pays first again while you're reemployed.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?
Medicare's fall Open Enrollment Period runs October 15 through December 7 each year. OPM sets FEHB Open Season's dates, so check them on opm.gov; where the two windows overlap, you can line up changes to both plans. 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 how you return to FEHB after a suspension is a question for your retirement office.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.
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