Our deep dive into the Federal Employee Health Benefits (FEHB) program continues with examining how FEHB plans coordinate with other health coverage like Medicare, TriCare, and CHAMPVA.
OPM’s FEHB Handbook is a dense digital document that details all the technicalities around health insurance for active and retired federal workers and their family members. In this series, we’re attempting to summarize the government’s guide in more digestible chunks. In the first article, we provided a general overview of the handbook and its introduction. The second article looked at the legal responsibilities of the parties involved while the third piece focused on FEHB premiums and the tax implications of premium conversion. The fourth part was about FEHB withholdings, contributions, and how to calculate the daily rate, part five looked at the types of health plans available in the FEHB program. Now, welcome to part six: how FEHB coordinates with other health insurance programs.
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Someone who is enrolled in FEHB can sometimes also be covered by another type of health coverage, such as a spouse’s health insurance, Medicaid, Medicare, and no-fault auto insurance. When this happens, the two plans “coordinate” to determine which plan is the primary payer and which is the secondary. The coordination of benefits rules are in place to ensure no more than 100% of any medical claim is paid.
With healthcare from facilities for uniformed services, FEHB will cover inpatient hospital costs. For VA facilities, FEHB covers services and supplies if the treatment is not for a service connected to disability. For TriCare and CHAMPVA health insurance, FEHB is always the primary payer.
Coordination with Medicare
With Medicare parts A and B, Medicare makes the final determination as to whether coverage it provides is primary, or if the primary payer is FEHB. Their decision depends mostly on the federal worker’s employment status. If the fed is actively working, FEHB is primary. If they’re collecting either a FERS or CSRS pension, then FEHB is the secondary payer. Retired feds that return to the government will see FEHB revert back to primary unless their new position is excluded from FEHB coverage or if their spouse is also a federal annuitant and is remaining in retirement. For former feds that are collecting workman’s compensation, then Medicare will be primary. If either FEHB enrollees are only covered by Medicare part B and not part A, then FEHB is primary only for services not covered by part B.
If a former spouse has an FEHB plan under the spouse equity provision and Medicare parts A and B, then Medicare is primary. If a person is eligible for FEHB because of a TCC (temporary continuance of coverage), then Medicare is primary unless they are only eligible for Medicare due to an end-stage renal disease (ESRD). In that case, FEHB is primary for a 30-month coordination period. In fact, for anyone who is only eligible for Medicare because of an ESRD, FEHB is primary for the first 30 months of their Medicare eligibility, after which FEHB switches to the secondary payer. To get into the real weeds, if an FEHB enrollee becomes eligible for Medicare due to ESRD and was already a Medicare beneficiary with FEHB as primary, FEHB will remain primary payer for the 30-month coordination period. But, if Medicare was primary at the time they became eligible due to ESRD, then Medicare will stay the primary payer.
The last coordination of benefits rule regarding Medicare involves some retired federal judges. Unless their spouse is not an active federal employee (or is, but works in a position that is excluded from FEHB coverage), then Medicare will be the primary payer.
For most folks, though, you just have to remember: Retired? Medicare is primary. Still working for the federal government? FEHB is primary. If Medicare is the primary payer, covered individuals should submit medical claims to them first. If there’s any remaining balance, a claim can be submitted to the FEHB plan along with the plan’s explanation of benefits (EOB) or Medicare Summary Notice (MSN). If FEHB is the primary payer, claims are submitted to that plan first and then any remaining amount due can be submitted to Medicare with the plan’s EOB.
Upcoming articles in this FEHB series will be focusing on health plan eligibility and enrollment. In the meantime, don’t forget to register for our next FEHB Webinar!
**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.