FEHB and Medicare at 65: what federal employees and retirees need to decide
Federal retirees are one of the few groups who can keep good coverage at 65 without taking Part B. That makes the decision a real choice rather than a formality, and the rules differ for active employees, retirees and postal retirees. Here is how they fit together.
FEHB doesn't require Part B, and your FEHB coverage continues whether or not you enroll in Medicare; while you're still a federal employee, FEHB pays first and you can delay Part B without a penalty. Once you retire, Medicare pays first, and if you skip Part B and want it later you usually wait for the January to March General Enrollment Period and pay a lifetime penalty. Postal retirees in PSHB are different: those who retire after January 1, 2025 generally must be enrolled in Part B to keep PSHB coverage.
Who pays first, and whether you need Part B
| Your situation at 65 | Pays first | Part B |
|---|---|---|
| Still a federal employee, with FEHB | FEHB | Can delay with no penalty; sign up within 8 months after the job or coverage ends |
| Retired (annuitant), with FEHB | Medicare | Optional; decide at 65, because a later start usually brings a penalty |
| Reemployed annuitant eligible for FEHB | FEHB | Treated like an active employee while reemployed |
| Postal retiree in PSHB who retired after January 1, 2025 | Medicare | Required to keep PSHB, unless an exception applies |
OPM advises taking premium-free Part A when you can get it. The one common reason to hold off is an FEHB high-deductible plan with a Health Savings Account you're still contributing to.
If you're still working for the government
While you're an active employee, your FEHB plan pays first and Medicare second. You can take premium-free Part A and delay Part B, which saves the Part B premium until retirement. When you retire, or the coverage ends, you have an 8-month Special Enrollment Period to sign up for Part B with no late penalty.
Before your last day, ask your employing office to complete form CMS-L564 (Request for Employment Information). It shows Social Security you had coverage through your job, so you can use the Special Enrollment Period. The working past 65 guide walks through the timing.
If you're retired: is Part B worth it?
As an annuitant you don't have to take Part B. Your FEHB coverage continues either way, and your FEHB premium doesn't go down if you enroll. Medicare pays first once you have it, and FEHB pays second. OPM lists what Part B can add:
- Some FEHB plans waive copays, coinsurance and deductibles for services Part B covers when Medicare pays first.
- Part B covers some things your FEHB plan may cover only partly, or not at all, such as durable medical equipment and home health care.
- If you're in an FEHB HMO, Medicare can pay for Part B services you get outside the HMO's network.
- Some FEHB plans reimburse part of the Part B premium.
The cost is the Part B premium: $202.90 a month as the standard amount in 2026, more at higher incomes (see the IRMAA guide). Whether it pays off depends on your plan's brochure and how much care you expect to use.
The part people regret is skipping it and changing their mind. Retiree coverage, FEHB as an annuitant included, doesn't give you a Special Enrollment Period. If you didn't sign up when you were first eligible, the way in is the General Enrollment Period, January 1 to March 31, with coverage starting the month after you sign up. And the premium goes up 10% for each full 12 months you could have had Part B and didn't, for as long as you have it. So if there's a chance you'll want Part B later, the cheapest time to take it is at 65.
The turning 65 checklist has the Initial Enrollment Period dates and the rest of the steps.
Part D: usually not needed with FEHB
FEHB drug coverage counts as creditable coverage. That means you won't owe a Part D late penalty for delaying Part D while you have FEHB, so most FEHB members don't need a separate Part D plan.
Some FEHB plans include Medicare drug benefits. If yours does and you're eligible for Part D, the plan enrolls you automatically, at no additional cost. You can opt out by contacting the plan before that coverage begins, or disenroll later, effective the first of the following month. Two points to keep in mind:
- You can be in only one Medicare drug plan or Medicare Advantage plan at a time, so joining a separate Part D plan and your FEHB plan's Medicare drug benefit don't stack.
- At higher incomes, Medicare charges an extra amount on Part D coverage as well as Part B.
The Part D page explains the penalty and how drug plans work in New York.
Postal retirees: PSHB has its own Part B rule
As of January 1, 2025, Postal Service employees and annuitants can no longer be enrolled in FEHB; their program is the Postal Service Health Benefits (PSHB) Program. Unlike FEHB, PSHB requires certain Medicare-eligible postal annuitants, and their Medicare-eligible family members, to enroll in Part B to keep PSHB coverage. OPM lists these exceptions:
- Annuitants who retired on or before January 1, 2025 and aren't already in Part B, and their family members.
- Postal employees who were 64 or older on January 1, 2025, and their family members.
- Annuitants or family members living outside the U.S. and its territories.
- Annuitants or family members eligible for or enrolled in certain VA health benefits.
- Annuitants or family members eligible for Indian Health Service care.
If the requirement applies to you and you don't enroll in Part B, you risk losing PSHB, and OPM says you won't be able to enroll in PSHB later even if you take Part B then. A Medicare-eligible spouse who doesn't qualify for an exception and doesn't enroll can be removed from the family enrollment.
Drug coverage works differently too. In PSHB, the Medicare drug benefit through your PSHB plan is your only access to drug benefits. You're enrolled automatically when eligible; if you opt out and don't join a separate Part D plan, you have no drug coverage. If you opted out by mistake, OPM says to contact your PSHB plan within 90 days.
Medicare Advantage and FEHB
There are two different routes, and they are easy to mix up:
- A Medicare Advantage plan offered through your FEHB plan. You need Parts A and B, and the plan includes drug coverage similar to Part D. You don't need to suspend FEHB. Some of these plans reimburse some or all of the Part B premium. Your FEHB plan's brochure explains how to enroll.
- A separate Medicare Advantage plan, with FEHB suspended. If you suspend FEHB, you can re-enroll during the annual Federal Benefits Open Season or after a qualifying life event. Canceling FEHB as an annuitant is permanent, so make sure any form you sign says suspend, not cancel.
Either way, compare the Advantage plan's network and benefits with what you have now before you change anything.
Questions to settle before 65
- Will you still be working at 65, or retired? That decides who pays first.
- Are you in FEHB or PSHB? PSHB may require Part B.
- If you're retired with FEHB, does your plan waive cost sharing or reimburse part of the Part B premium for people with Medicare? The brochure will say.
- Does your FEHB plan include Medicare drug benefits, and do you want them?
- Is your spouse covered, and when does your spouse reach 65?
Your FEHB plan's brochure and OPM have the final word on how your plan works. What I can do, from Clifton Park and by phone across the Capital Region, is go through the Part B decision with you, the Social Security side of retirement, and how Medicare fits with what you already have. There's no fee for Medicare help. Ask for a call.
By county: Albany · Saratoga · Schenectady · Rensselaer · Warren · Washington · Montgomery · Fulton · Columbia · Greene · Schoharie · Otsego · Herkimer · Hamilton · Essex · Ulster · Dutchess. Town pages: every town, grouped by county. Anywhere else in New York.
- FEHB and Medicare (OPM) — automatic enrollment in FEHB Medicare drug benefits at no additional cost; one Part D or Medicare Advantage plan at a time; Medicare Advantage through FEHB needs Parts A and B; suspending vs. canceling FEHB; checked October 21, 2026
- Annuitant and Medicare (OPM) — pros of Part B for annuitants, Part B penalty of 10% per 12 months, FEHB provides creditable drug coverage; checked October 21, 2026
- Active Federal Employee and Medicare (OPM) — FEHB primary while employed; defer Part B; Special Enrollment Period; CMS-L564; HDHP and Part A; checked October 21, 2026
- Coordination of Medicare and FEHB benefits (OPM) — who pays first for employees, reemployed annuitants and annuitants; checked October 21, 2026
- I'm eligible for Medicare (OPM) — FEHB continues whether or not you enroll in Medicare; premiums don't go down; take premium-free Part A; checked October 21, 2026
- Postal Service Health Benefits Program (OPM) — Part B requirement for certain Medicare-eligible postal annuitants and family members, and its exceptions; checked October 21, 2026
- PSHB Annuitant and Medicare (OPM) — Part B required for annuitants retiring after January 1, 2025 unless an exception applies; PSHB Medicare drug benefits; checked October 21, 2026
- When does Medicare coverage start? (medicare.gov) — 8-month Special Enrollment Period for job-based coverage; retiree coverage doesn't qualify; General Enrollment Period January 1 to March 31; checked October 21, 2026
- Avoid late enrollment penalties (medicare.gov) — Part B and Part D penalties; creditable drug coverage; checked October 21, 2026
We do not offer every plan available in your area. Currently we represent 10 organizations which offer 81 products in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. 1-800-MEDICARE (TTY 1-877-486-2048) is available 24 hours a day, 7 days a week. Insurers' legal names and home offices: carriers page.
Common questions
Short answers to what people ask before they call.
Still have a question? Call (518) 902-8822 or book a call.
Do I have to take Part B to keep FEHB?
No. FEHB has no Part B requirement, and your FEHB coverage continues whether or not you enroll in Medicare. It's a choice, and the time to make it is at 65, because signing up later as a retiree usually means a lifetime penalty. Postal retirees in PSHB have a different rule.
Will my FEHB premium go down if I enroll in Medicare?
No. OPM says FEHB premiums don't go down when you enroll in Medicare. What can change is your out-of-pocket cost: some FEHB plans waive copays, coinsurance and deductibles for Part B services when Medicare pays first, and some reimburse part of the Part B premium. Check your plan's brochure.
Do I need a separate Part D plan if I have FEHB?
Usually not. FEHB drug coverage is creditable, so you won't face a Part D late penalty for delaying Part D while you have FEHB. If your FEHB plan offers Medicare drug benefits, it enrolls you automatically when you become eligible, at no additional cost. You can be in only one Medicare drug plan or Medicare Advantage plan at a time.
I'm retired and skipped Part B at 65. Can I get it later?
Yes, but retiree coverage, including FEHB as an annuitant, doesn't give you a Special Enrollment Period. You'd sign up in the General Enrollment Period, January 1 to March 31, with coverage starting the month after you sign up, and pay 10% more for each full 12-month period you could have had Part B, for as long as you have it.
I'm a postal retiree. Do I need Part B?
If you retire after January 1, 2025 and are in PSHB, you generally must be enrolled in Part B to keep PSHB coverage, and so must Medicare-eligible family members. Exceptions include people who retired on or before January 1, 2025, employees who were 64 or older on that date, people living outside the U.S., and people eligible for certain VA or Indian Health Service benefits.
Can I suspend FEHB and join a Medicare Advantage plan?
Yes. If you suspend FEHB to join a Medicare Advantage plan, you can re-enroll in FEHB later during Open Season or after a qualifying life event. Canceling FEHB as an annuitant is permanent, so don't confuse the two. If you choose a Medicare Advantage plan offered through your FEHB plan, you don't need to suspend FEHB at all.
Federal or postal retiree turning 65?
Tell me whether you're still working, which program you're in (FEHB or PSHB), and what your spouse has. That settles most of the Part B question in one call.