Before asking for help, know the rules
Coordinating Medicare and the Federal Health Benefits Program can be hard to navigate without the right information.
Ispend a lot of time providing "to-do" lists for federal employees and retirees to help them manage their benefits. Recently, I helped a couple navigate the coordination of Medicare and FEHB. Their story illustrates the importance of knowing the rules and having a reference to support the reason for the request, before asking for help.
The husband and younger spouse, Larry, recently retired in 2023 and has been carrying self-plus-one FEHB coverage so that:
- He could continue to enjoy paying the premiums with tax-free dollars during his employment, and
- So that his wife, Jane, could delay her enrollment in Part B of Medicare without a late enrollment penalty.
Jane, the older spouse, also retired from federal employment and had always been covered under FEHB. Her coverage as a family member on her husband's enrollment provided her with continuous enrollment even though she was no longer paying the premiums. Jane turned 65 in 2019 and because she was covered under her husband's "current employment" health coverage, she could delay Part B enrollment without incurring a late enrollment penalty. I provided the following reference to them at the time she turned 65 so that they could feel more confident in the decision for the wife to delay her Medicare enrollment in Part B: The Centers for Medicare and Medicaid Services Fact Sheet: Deciding Whether to Enroll in Medicare Part A and Part B When You Turn 64, which includes the following:
You can delay Part B until you (or your spouse) stop working or lose that employer coverage. This allows you to save the cost of your Part B premium. It also allows you to postpone your one-time "Medigap open enrollment period" until a later time, when you may want to purchase this type of coverage. You will NOT pay a penalty for delaying Medicare, as long as you enroll within 8 months of losing your coverage or stopping work (whichever happens first). You'll want to plan ahead and enroll in Part B at least a month before you stop working or your employer coverage ends, so you don't have a gap in coverage.
Last year on Sept. 30, Larry retired from his government career, and they came to me for instructions for how to accomplish Jane's enrollment in Medicare and to get help with splitting Larry's self-plus-one FEHB enrollment into two self-only health plans, with Jane choosing a plan that would work well with Medicare.
After discussing the pros and cons of enrolling in Medicare Part B, Jane decided that she would enroll in Part B and change to a different health plan that would give her a partial reimbursement of the Part B premium and a plan that would waive her cost-sharing when Medicare was the primary payer for her medical services. This would ensure that she would have close to $0 out of pocket costs in the future, regardless of her health and need for medical care. She compared the following three plans that provided these benefits:
- BC/BS Basic (Plan Code 11)
- Self-only: $207.44 / month; Self-plus-one: $517.03 / month
- Part B reimbursement: $800 / spouse / year
- Waives coinsurance and copayments when using BC/BS Preferred Providers.
- Aetna Direct (Plan Code N6)
- Self Only: $160.80 / month; Self-plus-one: $352.64 / month
- Part B reimbursement: $900 / spouse / year
- Waives deductible, coinsurance and copayments when Medicare is primary in and out of network.
- GEHA High Option (Plan Code 31)
- Self -only: $235.41 / month; Self-plus-one: $540.95 / month
- Part B reimbursement: $1,000 / spouse / year
- Waives deductible, coinsurance and copayments when Medicare is primary in- and out-of-network.
In addition to these three options, most FEHB plans provide incentives to enroll in Medicare A and B through a Medicare Advantage, or Medicare Part C, with election available at no additional charge. The three plans listed above do not require the Medicare Advantage election to receive the incentives to enroll in Medicare. Medicare Advantage options are relatively new for federal retirees and Jane was not sure about any downsides to Part C coverage and decided not to include those options in her decision. Here are a few things to consider when contemplating a Medicare Advantage enrollment:
Medicare Advantage Plans: Caution (may vary by plan)
For some who enroll in Medicare Part C, there is a fear that all providers may not accept the plan and there could be more difficulty getting approval for necessary medical care. According to KFF, Medicare Advantage plans can require enrollees to get approval from the plan before receiving a service, and if approval is not granted, then the plan generally does not cover the cost of the service. Medicare Advantage enrollees can appeal the plan's decision, but relatively few do so. Traditional Medicare (Medicare Part A and Medicare Part B), in contrast, does not require prior authorization for most services. They also had read that some providers are not accepting Medicare Advantage plans such as Baptist Health in Louisville, Ky., for example, has stated that all nine hospitals, along with its clinics and physician groups, have cut ties with Advantage plans offered by UnitedHealthcare and WellCare Health Plans Inc.
Medicare Advantage Plan: Incentives (may vary by plan)
Enrolling in a Medicare Part C or Medicare Advantage can be tempting due to the variety of cost-saving benefits that most plans offer such as:
- Generous reduction in Medicare Part B premium
- All covered medical services have $0 copays, including preventive care, emergency room, durable medical equipment, routine podiatry, physical therapy and more.
- Enjoy free gym membership, extra vision benefits, dental benefits, hearing aid savings, meal delivery following a hospital stay, non-emergency transportation to medical appointments, and more.
- No need for a separate Medicare Part D plan. Get prescription drug coverage with full coverage in the gap and low copays.
To accomplish these tasks, I reminded the couple that Jane now has an 8-month window to enroll in Part B of Medicare without a late enrollment penalty. This is called a Special Enrollment Period, and it began the month after Larry's retirement in September and will end eight months later on May 31, 2024. I had earlier instructed Larry to get form CMS L564 completed by his employer to provide proof that Jane was covered under "current employment" health coverage until his retirement on Sept. 30, 2023.
It was now time to put the plan into action! After our meeting, Jane called Social Security and she was scheduled for a telephone appointment on May 24. The agent told Jane that she was not eligible for Medicare Part A based on her work record, but that she could enroll in Part B. I was astounded that Jane was told she was not eligible for Medicare! Jane retired under CSRS, and she did not have enough work credits to qualify for Social Security retirement benefits, however, all federal employees who paid the Medicare tax are eligible for Medicare on their work record and feds have been paying into Medicare since 1983. This includes those who retired under CSRS as well as FERS. In addition, she would also be entitled to Medicare even if she never worked outside the home because her husband is at least age 62 and has worked at least 10 years in Medicare-covered employment.
If you're not yet 62 when your spouse turns 65, he or she won't be eligible for free Part A until your 62nd birthday. In this case, your spouse should still apply for Part B at 65 to avoid paying a higher Part B premium. However, if you're still working and your spouse is covered under your group health plan, he or she could delay Part B enrollment without paying higher premiums. In addition, Jane does not need proof to show Social Security that she is eligible for Medicare, they should know that she is eligible. Her Social Security earnings record shows her Medicare-taxed earnings dating back to 1983.
Armed with this information and resources, Jane didn't want to wait to provide this information during her May 24 appointment since that would be only one week from the end of her Special Enrollment Period, so she drove to the Social Security office near her home. She went in the morning to submit paperwork for Part A and took the printout of her Social Security earnings record to prove her entitlement to premium-free Medicare Part A. She was told for the second time that she didn't qualify because the guy she spoke with on the phone the day before had noted in the system that she didn't qualify. It took a short meeting with the office supervisor to show that the system didn't show the complete information.
After Jane convinced them that she was entitled to Medicare coverage, the representative changed the note in the system to say she did qualify. She decided to return later the same day to take advantage of the Special Enrollment Period to enroll in Part B. This time a different rep took the Part B application along with Larry's completed employer form, CMS L564, proving that she was covered under "current employment" insurance until Sept. 30, 2023.
However, the electronic signature on Larry's employer form was called into question as it wasn't a "wet signature." This created one more potential obstacle for Jane to get enrollment in Part B without a late enrollment penalty. After another consultation with the office manager, it was determined that it was acceptable. According to the Social Security Program Operations Manual, for Section B of CMS Form L564, a wet signature is not required. An electronic signature is sufficient.
The next task was to split Larry's self-plus-one FEHB enrollment into two self-only enrollments. This can be done by using OPM Form 2809 Qualifying Life Event 2F which allows an annuitant or eligible family member who loses FEHB coverage due to termination, cancellation, or change to self-only of the covering enrollment to change from not enrolled to enrolled and from one plan or option to another. Retirees may cancel enrollment or change from self and family or self-plus-one to self-only at any time.
Larry and Jane wanted to make sure that the effective date of this change was the same for Larry as it was for Jane, so they called OPM at 7:40 am EST to make this change over the phone. I advised them to call OPM as close to 7:40 am EST as possible to avoid a long wait. Larry and Jane waited less than 30 minutes to be connected to someone who could help them make this insurance election.
The OPM customer service representative was uncertain whether Jane could switch plans or if she would be required to remain in Larry's same plan. She processed the request and informed the couple that they would be notified in writing of the confirmation of their request, but due to a backlog, it could take up to 60 days.
The moral of the story: Above all, be respectful, patient and kind. Decide if the best method is email, phone call or an in-person visit. Learn what times are least busy for conducting business. Know the rules regarding what you are trying to accomplish and bring a reference if necessary.
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