As retirement approaches, understanding how your Federal Employees Health Benefits (FEHB) coverage works with Medicare is crucial. The 2025 Medicare Basics for FEHB guide—developed by Hawaii SHIP and the Executive Office on Aging—breaks down the most important considerations for active federal employees, retirees, and Medicare-eligible dependents.
What Is Medicare and Who Provides It?
Medicare is federal health insurance for individuals 65 and older or those under 65 with specific disabilities. It’s managed by:
- Social Security Administration (SSA): Handles enrollment for Parts A and B, collects premiums, and administers Extra Help.
- Centers for Medicare & Medicaid Services (CMS): Oversees benefits and claims.
You’re eligible if you’re:
- 65 or older,
- Under 65 with Social Security Disability Insurance (SSDI) for 24 months,
- Diagnosed with End-Stage Renal Disease (ESRD) or ALS.
Understanding the Four Parts of Medicare
According to the visual summary on page 5 of the booklet, here’s what each part includes:
- Part A: Inpatient hospital care, hospice, skilled nursing, and some home healthcare. Premium-free if you’ve worked 40 quarters.
- Part B: Outpatient services, ER visits, durable medical equipment, and preventive services. In 2025, the base premium is $185/month.
- Part C (Medicare Advantage): Private plans that combine Parts A and B, often including drug coverage and extra benefits.
- Part D: Standalone prescription drug plans.
- Medigap: Supplemental plans to help with out-of-pocket costs for Parts A & B.
What Is IRMAA?
The chart on page 7 outlines IRMAA—an income-based surcharge applied to Parts B and D if your income exceeds $106,000 (individual) or $212,000 (couple). These premiums can rise as high as $628.90 for Part B and $85.80 extra for Part D.
Still Working at 65? Here’s What You Need to Know
If you’re still working with FEHB coverage:
- You’re not required to enroll in Medicare.
- You can delay Part B and D without penalty.
- It’s recommended to enroll in premium-free Part A, if eligible.
Retirees: Should You Enroll in Medicare?
You can retain FEHB coverage if:
- You’re entitled to a federal retirement annuity, and
- You’ve been enrolled in FEHB for 5 continuous years before retiring.
Though not required, many retirees choose to enroll in Part A (usually free) and Part B, especially since some FEHB plans reduce cost-sharing when paired with Medicare.
✅ Reasons to Enroll in Part B:
- See any Medicare provider—even outside your FEHB network.
- Lower out-of-pocket costs (e.g., waived copays).
- Some plans reimburse Part B premiums.
❌ Reasons to Decline:
- IRMAA increases the cost.
- Certain FEHB plans offer little benefit coordination with Medicare.
- You’re protected by Medicare’s “limiting charge” rule even without Part B.
What About Prescription Drug Coverage?
FEHB plans are considered “creditable coverage” under Medicare rules. This means:
- No need to enroll in Part D, and
- No penalty if you delay enrolling and change your mind later.
Enrollment Periods and Penalties
There are three primary enrollment windows:
- Initial Enrollment Period (IEP): Starts 3 months before and ends 3 months after your 65th birthday.
- Special Enrollment Period (SEP): Triggered when you lose employer coverage. You have 8 months to enroll in Part B.
- General Enrollment Period (GEP): Jan 1–Mar 31 each year.
Failing to enroll on time can result in:
- A 10% penalty for Part B for every 12 months delayed.
- A 1% penalty per month for Part D based on national averages.
🛑 COBRA is not considered creditable coverage. You must enroll in Medicare when first eligible.
Key Cost Considerations
- FEHB premiums are not reduced when you enroll in Medicare.
- You’ll still pay the same premium as active employees.
- Medicare premiums vary:
- Part A: Free for most, otherwise up to $518/month.
- Part B: Starts at $185/month.
- Part C: $0–$151/month.
- Part D: $0–$182/month.
Where to Get Help
Hawaii SHIP offers free, unbiased counseling via phone, Zoom, or in person. They also host educational sessions and help with plan comparisons and enrollment.
📞 Oahu Helpline: 808-586-7299
🌐 Website: hawaiiship.org
📍 Address: 250 S Hotel St, Ste 406, Honolulu, HI 96813
For detailed information, visit:
👉 Medicare Booklet – FEHB Employees & Retirees
