Since January 1,2025 and concluding March 31, 2025, the Center for Medicare and Medicaid Services (CMS) has been conducting the annual General Enrollment Period (GEP). During the GEP, individuals aged 65 and older can enroll in Medicare Part A (Hospital Insurance) and/or Medicare Part B (Medical Insurance).
What does the GEP mean for federal employees and retirees aged 65 and older? This column discusses which federal employees and retirees may need to enroll in Medicare during the current GEP ending March 31, 2025. Included in the discussion are GEP enrollment procedures, monthly premium costs, and possible late enrollment penalties.
What is Medicare Part A and what is the premium cost?
Medicare Part A is hospital insurance and pays for inpatient hospital care, skilled nursing facility inpatient care, hospice care, and home health care. An individual who becomes eligible for Medicare Part A is automatically eligible for the other parts of Medicare, including Medicare Part B.
An individual becomes eligible to enroll in Medicare Part A at age 65. There is no premium cost for Medicare Part A assuming the individual has paid the Medicare Part A Hospital Insurance Tax (HIT) via payroll deduction for a minimum 10 working years. The HIT is equal to 1.45 percent of an employee’s wages, deducted each pay date and matched by the employee’s employer.
All federal employees are subject to the HIT. The rule is that if any individual has paid the HIT for at least 10 years during his or her working lifetime, then upon reaching age 65, the individual is eligible to enroll in Medicare Part A with no premium cost.
What is Medicare Part B and what is the premium cost?
Medicare Part B is medical insurance and pays for doctor services, medical equipment, laboratory services such as blood tests and x-rays, and outpatient care. Unlike Medicare Part A, there is a monthly premium cost for Medicare Part B. The premium cost depends on the Medicare Part B beneficiary’s annual Modified Adjusted Goss Income (MAGI). The higher an individual’s MAGI, the higher the beneficiary’s monthly premium. The following chart presents the 2025 Medicare Part B monthly premium cost depending on a beneficiary’s 2023 MAGI.
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Medicare Part B Monthly Premium Cost During 2025 |
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| Beneficiaries who file their federal income tax returns as single or head of household with 2023 modified adjusted gross income (MAGI): | Beneficiaries who file their federal income tax returns as married filing jointly with 2023 modified adjusted gross income (MAGI): | Income-Related Monthly Adjustment Amount (IRMAA) | 2025 Monthly Medicare Part B Premium Cost |
| Less than or equal to $106,000 | Less than or equal to $212,000 | $0.00 | $185.00 |
| Greater than $106,000 and less than or equal to $133,000 | Greater than $212,000 and less than or equal to $266,000 | 74.00 | 259.00 |
| Greater than $133,000 and less than or equal to $167,000 | Greater than $266,000 and less than or equal to $334,000 | 185.00 | 370.00 |
| Greater than $167,000 and less than or equal to $200,000 | Greater than $334,000 and less than or equal to $400,000 | 295.90 | 480.90 |
| Greater than $200,000 and less than $500,000 | Greater than $400,000 and less than $750,000 | 406.90 | 591.90 |
| Greater than or equal to $500,000 | Greater than or equal to $750,000 | 443.90 | 628.90 |
It is important for federal retirees aged 65 and older who are enrolled in “Original Medicare” (Medicare Parts A and B) to understand that Original Medicare does not pay 100 percent of a retiree’s doctor and hospital bills. On average, Original Medicare pays 60 to 80 percent of a beneficiary’s doctor and hospital bills. A Medicare beneficiary needs to be enrolled in some type of Medicare supplemental insurance to pay the 20 to 40 percent gap in what doctors and hospitals charge and what Original Medicare pays. For federal retirees aged 65 and older, that Medicare supplemental insurance is the Federal Employees Health Benefits (FEHB) program.
It should also be mentioned that a federal retiree is not required to enroll in any part of Medicare. Most federal retirees do enroll in Medicare Part A when they become age 65 (even if they are still in federal service) because they do not have to pay a monthly premium for Medicare Part A. But there are federal retirees who do not like the idea of enrolling in Medicare Part B because of the monthly premium associated with Medicare Part B. They feel that their FEHB program health insurance is more than adequate to pay their doctor bills and other non-hospital medical expenses. However, studies have proven that federal retirees who are enrolled in Medicare Part B and who see doctors who accept Medicare patients will have minimal - more likely nothing - in out-of-pocket expenses including deductibles, copayments and coinsurance.
Those federal retirees who do enroll in the Original Medicare must adhere to strict enrollment deadlines when it comes to Medicare Part B. If they miss an enrollment deadline, they could pay a late enrollment penalty. Medicare’s various enrollment periods are the: (1) Initial Enrollment Period (IEP); (2) Special Enrollment Period (SEP); and (3) General Enrollment Period (GEP). The following discussion about Medicare Part B enrollment deadlines is divided into two sections; namely, one section for federal employees who retire from federal service before age 65 and one section for those federal employees who retire from federal service after age 65.
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Federal employees who retire from federal service before age 65
Federal employees are eligible to keep their FEHB program health insurance after they retire from federal service. Most retiring employees meet the requirements and keep their FEHB program health insurance throughout their retirement years. Until they become age 65, they are not eligible to enroll in Original Medicare. Their doctors and hospital bills are paid by their FEHB health insurance.
Within three months of becoming age 65, a federal employee can enroll in Original Medicare. The first day of the month, which is three months before the month an individual becomes age 65 is the start of the individual’s IEP. The IEP is a seven-month period consisting of three months before the month the individual becomes age 65, the month of the individual’s 65th birthday, and the three-month period following the month in which they become age 65. The following example illustrates:
Example 1. Daniel, age 64, retired from federal service on December 31, 2023. Daniel is enrolled in an FEHB program plan. Daniel turned 65 on June 25, 2024. Daniel’s IEP started March 1,2024 and ended September 30, 2024. Upon enrolling in Original Medicare, Medicare will be Daniel’s “primary” health insurance and his FEHB health insurance will be his “secondary” health insurance, or Medicare supplement insurance.
What happens if a federal retiree does not enroll in Original Medicare during the IEP?
If a federal retiree fails to enroll in Original Medicare during the IEP, then the retiree will have to wait until the next GEP to enroll. The GEP occurs every year between January 1 and March 31. Depending on which month during the GEP a retiree enrolls will determine when Original Medicare takes effect. If a retiree enrolls in January of the IEP, Original Medicare becomes effective February 1st. If a retiree enrolls in February, Original Medicare becomes effective March 1st. If a retiree enrolls in Original Medicare during March, Original Medicare becomes effective April 1st.
If it has been more than 12 months since the end of a retiree’s IEP and the effective date of GEP enrollment, the retiree will be subject to a late enrollment penalty for Medicare Part B. There is no late enrollment penalty for Medicare Part A.
In Example 1, if Daniel failed to enroll in Original Medicare during his IEP ending September 30, 2024, he will have to wait until the next GEP, January 1,2025 through March 31, 2025, to enroll in Original Medicare. Daniel will not be subject to a late enrollment penalty for Medicare Part B if he enrolls during the GEP. By enrolling during the GEP, Original Medicare will become effective before September 30, 2025 (less than 12 months since the end of Daniel’s IEP), thereby avoiding a late enrollment penalty.
Federal employees who retire from federal service after age 65
Those federal employees who continue to work in federal service past age 65 and enrolled in a FEHB program health plan can enroll in Medicare A when they become age 65 at no premium cost. With respect to Medicare Part B, they can delay enrolling until after they retire from federal service and then enroll in Medicare Part B with no late enrollment penalty.
Employees aged 65 and older working for an employer with at least 20 full-time employees and offering a group-health insurance plan are not required to enroll in Medicare Part B until they retire. Many employees enroll in Medicare Part A at age 65 because there is no premium cost. Upon retiring from that employer, an employee aged 65 and older can enroll in Medicare Part B and not be subject to a late enrollment penalty provided the individual enrolls the under the retired employee’s “Special Enrollment Period” (SEP).
The SEP is an eight-month period that begins on the effective day of a federal employee’s retirement. For most federal employees, no matter which day of a month an employee retires, the “effective” date of retirement is the first day of the next month. The SEP begins that day and ends eight months later. The following example illustrates:
Example 2. Carol, aged 68, retired from federal service as a FERS-covered employee on December 31, 2023. Carol previously enrolled in Medicare Part A when she was aged 65. Carol was currently enrolled in an FEHB health program which she was eligible to keep in retirement. Carol’s SEP started on January 1,2024 and ended August 31, 2024.
In the event a federal retiree fails to enroll in Medicare Part B during the SEP, the retiree will have to wait for the following GEP in order to enroll in Medicare Part B. The result will be delayed enrollment, and the individual could be subject to a late enrollment penalty. Consider Example 2.
Example 2 (continued). Carol failed to enroll in Medicare Part B before August 31, 2024. She had to wait until the following GEP (January 1 -March 31, 2025) to enroll. She enrolled in Medicare Part B coverage in January 2025. Medicare Part B became effective February 1, 2025. There was no late enrollment penalty because it has been less than 12 months between the end of Carol’s SEP (August 31, 2024) and the effective date of Carol’s enrollment in Medicare Part B (February 1, 2025).
In the event Carol failed to enroll in Medicare Part B during the GEP ending March 31, 2025, then Carol would have to wait until the next GEP starting January 1,2026 and ending March 31,2026. In that case, because it would be more than one year since the end of Carol’s SEP (August 31,2024) and her enrollment in Medicare Part B (sometime between January 1 and March 31,2026), Carol will be subject to a 10 percent Medicare Part B enrollment penalty.
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Ed Zurndorfer, EA, ATA, CFP®, CLU®, ChFC®, CEBS®, ChFEBC℠: Federal Employee Benefits Expert
A former career Federal employee, Ed has published a staggering 1,200+ separate articles on Federal Benefits and Retirement!
Just “Google” his name, and you are likely to find a plethora of sites that contain his writings. Drawn to its mission to reach, teach
and serve Feds, Serving Those Who Serve is the only financial planning practice with which Ed has chosen to affiliate in over
20 years teaching. In addition to conducting Federal Benefits seminars for Serving Those Who Serve, you can find Ed’s
writings here on our blog in the FedZone, and on Fed-Soup, MyFederalRetirement, FederalNews Radio and NITP.
He is a member of the Maryland Society of Accountants, the National Association of Enrolled Agents, the International Society of Certified Employee Benefits Specialists, the Financial Planning Association, the National Association of Health Underwriters,
and the Society of Financial Service Professionals. Since 1999, Ed has taught many thousands of Federal employees about
their benefits, in person and at Federal agencies all over the country. Ed is a true national treasure.
Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.