Turning 65 brings a question every federal employee and retiree in FEHB faces: do you sign up for Medicare Part B, and pay its monthly premium, when you already have a federal health plan? There is no single right answer. It depends on whether you are still working, what your plan does once Medicare is involved, and how much health care you expect to use.
This article covers FEHB. Postal employees and retirees in the Postal Service Health Benefits (PSHB) Program have their own Part B rules; see PSHB for postal employees.
Who pays first
The answer turns on whether you are still working:
- Still working: according to OPM, when you are an active federal employee (or a reemployed annuitant) eligible for FEHB and you or your covered spouse has Medicare, your FEHB plan pays first.
- Retired: when you are an annuitant and you or your covered spouse has Medicare, Medicare pays first and your FEHB plan pays second.
If you are still working at 65
OPM's guidance for active employees is to consider deferring Part B, because FEHB pays first while you work. OPM notes that having Part A can help with costs your FEHB plan does not cover, such as deductibles and coinsurance.
When you retire, a Special Enrollment Period lets you sign up for Part B. OPM notes that enrolling during that period means no late enrollment penalty. Mark the date: the window does not stay open indefinitely.
If you are retired
Once Medicare pays first, Part B can lower what you pay out of pocket. OPM notes that some FEHB plans waive their deductibles, coinsurance and copayments when Medicare is primary, and that many Medicare Advantage plans offered through FEHB reimburse some or all of the Part B premium.
Enrolling in Medicare does not change your FEHB premium. Whether Part B is worth it comes down to arithmetic: the Part B premium on one side; on the other, what your plan waives or reimburses and the care you expect to need.
The late enrollment penalty
If you skip Part B when you are first eligible and are not covered by a Special Enrollment Period, Medicare.gov says you pay an extra 10% for each full year you could have signed up but did not. It is added to your Part B premium for as long as you have Part B.
That is why deciding to skip Part B is worth doing on purpose, not by default. If your health changes later and you want Part B then, the penalty comes with it.
Questions to settle before 65
- Will you still be working, or retired, when you turn 65?
- Does your FEHB plan waive deductibles and coinsurance when Medicare pays first? Check its brochure during Open Season.
- Does a Medicare Advantage option in FEHB reimburse the Part B premium?
- If you defer Part B while working, when does your Special Enrollment Period start and end?
Sources
- OPM, Medicare Part B coverage, checked October 7, 2026
- OPM, Coordination of Medicare and FEHB benefits, checked October 7, 2026
- OPM, Medicare and FEHB, checked October 7, 2026
- Medicare.gov, Avoid late enrollment penalties, checked October 7, 2026