Why Federal Employees Working Past Age 65 Can Delay Medicare Enrollment

Medicare eligibility typically begins at age 65. Most individuals have a seven-month enrollment period that starts three months before their birthday, includes their birth month, and ends three months after. Federal annuitants must sign up for Medicare during this window to avoid late-enrollment penalties, but active federal employees can delay without consequence. Here’s what you need to know.

Medicare Part A

While you’re still working, your FEHB plan serves as your primary coverage and Medicare is secondary. Medicare Part A, which includes inpatient hospital services, is premium-free if you’ve paid Medicare payroll taxes for at least 10 years. Some FEHB plans eliminate out-of-pocket costs for Part A services, but that only happens when Medicare is your primary coverage.

Medicare Part B

Medicare Part B covers outpatient services like doctor visits, but it has a monthly $185 premium. Depending on your income, you may also be subject to an Income-Related Monthly Adjustment Amount (IRMAA). Single and joint filers in the first income tier who earn more than $106,000 and $212,000 respectively will pay an additional $74 per month. Like Part A, you may not see savings on Part B services while your FEHB plan is your primary coverage. Enrolling in Part B while working would mean paying the Part B premium and potentially an IRMAA surcharge with little to no benefit as secondary coverage.

Health Savings Accounts (HSA) and High Deductible Health Plans (HDHP)

Enrolling in Medicare while still employed disqualifies you from receiving a Health Savings Account (HSA) under an HDHP. Instead, HDHPs provide a Health Reimbursement Account (HRA), which differs from an HSA in that:

• No voluntary contributions are allowed.
• No non-medical withdrawals are permitted.
• Some HRAs have a maximum rollover amount.
• The plan, not the member, owns the HRA, meaning unused funds are forfeited if you change plans.
• There’s less flexibility, as HRA funds are always used first for out-of-pocket expenses.

Special Enrollment Period

Federal employees who continue working past age 65 with FEHB coverage qualify for a special Medicare enrollment period. This eight-month window begins after employment ends, allowing you to enroll in Medicare without facing late-enrollment penalties