Federal employees are eligible to enroll in Medicare when they become age 65. Depending on whether they are retired from federal service and enrolled in the Federal Employees Health Benefits (FEHB) program will determine when they should enroll in Medicare when they become age 65.
This column discusses the three enrollment periods for employees and retirees to enroll in Medicare and not be subject to any late enrollment penalties. Retirees should also note that when they enroll in Medicare during any of the three enrollment periods, they can switch their FEHB program health plan within 30 days of enrolling in Medicare. They would want to switch their FEHB health plan to a plan that is less expensive because Medicare is considered primary coverage while their FEHB program insurance is considered secondary insurance. A federal retiree would not have to wait for the next FEHB open season to change their FEHB health plan to something that is less expensive.
SEE ALSO:
The three Medicare enrollment periods are the: (1) Initial Enrollment Period; (2) Special Enrollment Period; and (3) General Enrollment Period. Each enrollment period is discussed:
Initial Enrollment Period (IEP)
Individuals who are eligible for Medicare Part A (Hospital Insurance) – as a result of paying of the Medicare Hospital Tax via payroll deductions for a minimum 10 years – can sign up for Medicare Part A and Medicare Part B (Medical Insurance) during their IEP. The IEP is a seven-month period that begins three months before the month an individual becomes age 65 and ends three months after the month an individual becomes age 65. Note that according to Social Security/Medicare rules, an individual is considered to be aged 65 the calendar day before the individual actually becomes age 65. The following two examples illustrate the IEP:
Example 1. Henry will become age 65 on December 2, 2024. Henry’s seven-month period IEP starts September 1,2024 and ends March 31,2025. If Henry enrolls in Medicare Part A and/or Medicare Part B between September 1 and November 30, Henry’s Medicare coverage becomes effective on December 1. If Henry enrolls in Medicare Part A and/or Medicare Part B between December 1 and March 31, his Medicare coverage becomes effective the first day of the month after Henry enrolls in Medicare.
Example 2. Ellen will become age 65 on December 1, 2024. Ellen is considered to be age 65 as of November 30. Her IEP starts August 1, three months before she officially becomes age 65. Her IEP ends March 31, 2025. Ellen’s IEP is therefore eight months.
Special Enrollment Period (SEP)
After an individual’s IEP is over, an individual may have a chance to sign up for Medicare Part B when the individual becomes first eligible. The reason that the individual did not sign up for Medicare Part B at age 65 is because the individual was employed and had employer group-sponsored health insurance coverage. The employer employs at least 20 full-time employees.
For example, a federal employee enrolled in the Federal Employees Health Benefits (FEHB) has reached age 65. The employee enrolls in Medicare Part A (at no premium charge) but is not required to enroll in Medicare Part B until the employee retires from federal service. The employee can sign up for Medicare Part B (and not be subject to a late enrollment penalty) by signing up for Medicare Part B:
• Any time while the employee is enrolled in the FEHB program, or
•During the eight-month period that begins the month after the employee retires from .
from federal service.
A federal employee who retires and signs up for Medicare Part B during the SEP will have Medicare Part B coverage effective the first day of the month after the retiree signs up. There will be no late enrollment penalty for Medicare Part B provided a federal retiree signs up sometime within the SEP. The following example illustrates:
Example 3. Frank, age 68, retired from federal service on December 31, 2023. Frank is enrolled in the FEHB program and enrolled in Medicare Part A when he became age 65. Frank’s SEP started January 1,2024 and ended August 31, 2024. Frank enrolled in Medicare Part B on April 25,2024 with his Medicare Part B coverage becoming effective May 1,2024. Since Frank signed up for Medicare Part B within his SEP, Frank is not subject to a late enrollment penalty.
For information on signing up for Medicare Parts A and B, Medicare-eligible federal employees and retirees should visit https://www.ssa.gov/medicare/sign-up.
Exception Situations for a SEP
There are other circumstances in which an individual may sign up for Medicare Part B during a SEP and not be subject to a late enrollment penalty. An individual may be eligible if the individual missed an IEP because of certain exceptional circumstances. For example, being impacted by a natural disaster or an emergency, incarceration, employer or health insurance plan error, or other circumstances outside of an individual’s control that Medicare determines to be an exception. For more information, affected individuals should visit https://www.medicare.gov, or call 1-800-633-4227.
General Enrollment Period (GEP)
An individual who is eligible for Medicare can sign up for Medicare Part A and Medicare Part B during the General Enrollment Period (GEP) if the individual missed his or her IEP and does not qualify for a SEP. The GEP is held annually between January 1 and March 31.
If an individual signs up for Medicare during the GEP, the individual’s coverage starts the first day of the month after the individual signs up for Medicare. The following two examples illustrate:
Example 4. Louise, age 66, retired from federal service in 2022 when she was age 64. She turned age 65 in June 2023. Her IEP was March 1,2023 to September 30, 2023. Louise signed up for Medicare Part A but did not sign for Medicare Part B. She enrolled in Medicare Part B in January 2024 during the GEP. Her Medicare Part B coverage took effect on February 1, 2024.
Example 5. Doug, age 66, is the spouse of a federal retiree and enrolled in his spouse’s FEHB program insurance. His spouse retired from federal service in 2019. When Doug became age 65 in April 2023, he was incorrectly told that he did not have to sign up for Medicare Part B. He did not and was recently told that the earliest he can enroll in Medicare Part B is the next GEP – January 1 – March 31, 2025. Doug intends to sign up for Medicare Part B in January 2025. His Medicare Part B coverage will become effective February 1, 2025.
What is the Medicare Part B Late Enrollment Penalty?
It is important for federal employees and retirees to understand that when they are first eligible to sign up for Medicare Part B but do not, that they may have to pay a late enrollment penalty for as long as they are enrolled in Medicare Part B. Their monthly Medicare Part B premiums may increase up to 10 percent of the first Medicare Part B income tier monthly premium for each full 12 months in the period that the individual could have been enrolled in Medicare part B but did not sign up. The following example illustrates:
Example 6. Same facts as in Example 5. Doug’s IEP was January 1,2023 through July 31,2023. He did not sign up for Medicare Part B during his IEP. Doug intends to sign up for Medicare Part B in January 2025 with his Medicare Part B coverage taking effect on February 1, 2025.
Between July 31, 2023, the end of Doug’s IEP, and February 1, 2025, is a total of 18 months. Doug’s Medicare Part B late enrollment penalty is 10 percent of $164.90 (the first income tier monthly premium of Medicare Part B during 2023) or $16.49. The $16.49 will be added to Doug’s regular monthly Medicare Part B premium for the rest of his life.