Yep, you heard right. Your FEHB (your federal health insurance) plan may pay a good chunk of your Medicare premiums once you turn 65 (or retire, whichever is later).
But not all plans do.
Before I talk about what plans will pay for your Medicare premiums, you have to understand what parts of Medicare are important for you.
Medicare is a massive program with lots of parts and details, but as a federal employee, 95% of the time the only parts you need to worry about are Medicare Part A and Part B which you are able to enroll in at 65.
That’s it. Feel free to ignore everything else (like parts C, D, Advantage Plans, supplements, etc.).
Medicare Part A is free but Medicare Part B does have a premium. In 2023, most people are paying about $165/month per person.
Note: Medicare Part B premiums are based on income so if you have relatively high income in retirement your premium could be higher. Here is how it works.
So when I say that FEHB might pay for your Medicare premiums, I am talking about your part B premiums.
If you want to know more about if you need Medicare as a federal employee, check out this article.
What FEHB Plans Pay for Medicare Premiums
Some FEHB plans are designed to merge well with Medicare and some aren’t. You will want to check with your plan provider to see what your current plan offers to see if that plan still makes sense for you once you get on Medicare.
You may be surprised to know that Blue Cross Standard (even though it is the more expensive plan) doesn’t reimburse Medicare premiums but Blue Cross Basic (a cheaper plan) does.
Here are two plans that currently will reimburse you for part of your Part B premiums:
Blue Cross Basic: Will Reimburse $800/person (as of 2024)
Aetna Direct: Will reimburse $900/person (as of 2024)
On top of this reimbursement, it is common to have no out-of-pocket expenses when an expense is covered first by Medicare.
Why Do I Need Medicare and FEHB?
Medicare is not a requirement for (most) federal employees, but many feds choose to enroll. These are the main factors to consider when deciding if you need both.