2026 FEHB Program Changes

FEHB plans continue to offer cost-saving coordination with Medicare that will be paid by the taxpayers who finance Medicare and thereby reduce FEHB costs. This is done by having FEHB plans establish Employer Group Waiver Plans (EGWPs, pronounced “egg-whips”) covering Medicare Parts A and B and D in what are called “Medicare Advantage” plans. Medicare Advantage is an insurance program modelled after the FEHB, and now attracts one-half of all Medicare enrollees. These EGWP options designed for FEHB plans offer essentially 100% coverage of hospital and medical expenses, plus close to 90% plus of drug expenses, and almost all of them pay most of the Part B and D premiums on behalf of annuitants. In effect, they largely eliminate the “why pay two sets of overlapping insurance premiums?” dilemma that until now faced all civilian federal annuitants. In our ratings these plans show up as saving annuitants hundreds or in some cases several thousand dollars compared to the plan offerings previously available. . All annuitants enrolled in Medicare Parts A and B will have access to these plan options.

There will be a $2,100 out-of-pocket maximum in 2026 on annual drug costs paid by those who enroll in Part D. The reformed Part D benefit will be stronger than the current drug benefit in all FEHB plans, and since 75% of its costs are paid through Medicare, it will reduce FEHB costs for all annuitants who enroll in Part D. Most of these savings will accrue to those currently employed, and to their employing agencies, since all employees and annuitants are in the same cost pool, but all will realize some of the savings from new Part D enrollments in any plan. Your plan will send you a letter informing you of auto-enrollment and you'll have 30 days to disenroll, if you wish.