The Checklist sections
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Planning for the future
It’s important to start planning for retirement and determining your appropriate medical coverage.
The FEHB health plan you’ve had your entire career might not be tailored to your upcoming health needs.
Let’s look at some things to consider when planning:
The 5 Year Rule
When you retire from the federal government, you’re eligible to continue your FEHB coverage when you’ve met the following requirements:
- You have retired on an immediate annuity (an annuity which begins to accrue no later than one month after the date of your final separation).
- You have been continuously enrolled (or covered as a family member) in any FEHB plan (not necessarily the same plan) for the five years preceding retirement. Or if less than 5 years, for all service since your first opportunity to enroll. (This requirement still allows you to switch freely between FEHB plans to ensure the best coverage while not sacrificing post-retirement coverage.)
Preparing for future medical costs
Health issues and expenses can increase as you age in retirement. As a result, it’s important to be aware of your coverage options and the associated premiums, copayments, coinsurance, and out-of-pocket costs.
Fortunately, there are two Aetna federal plans designed for retirees, the Aetna Medicare℠ Plan (PPO) with extended service area (ESA), (also known as Aetna Medicare Advantage) or The Aetna Direct℠ Plan. These plans provide extra benefits and cost savings when paired with Medicare. Overall, the goal is to ensure you will be both medically covered and financially secure as you enjoy retirement.
Living on a fixed income
Living on a fixed income in retirement requires thoughtful preparation. Managing your finances, including your Thrift Savings Plan (TSP) and your FEHB health plan can help provide you with the peace of mind to enjoy your retirement years. It’s important to be mindful of your retirement savings and your expenses, both planned and unplanned.Understand your Thrift Savings Plan (TSP):
- Withdrawal guidelines
- Answers to frequently asked questions
Understanding MedicarePrepare for your future health coverage. Medicare.gov has additional resources to help:
- Eligibility time frame
- Expected premium costs
Becoming eligible for Medicare
Get to know Medicare and how it relates to you FEHB Plan.
What is Medicare?
At first glance, Medicare may seem like a lot to figure out, especially since you keep your FEHB coverage after you retire. But think of it this way — your FEHB plan has deductibles and coinsurance, which you pay out of pocket. Original Medicare does too.
Aetna offers nationwide plans designed for federal retirees. When they’re combined with Medicare, coinsurance and deductibles could be lowered to $0 for most medical expenses. When you’re enrolled in Original Medicare, that’s how these plans work. It’s possible to decrease your out-of-pocket medical expenses, as well as your monthly premiums.
So, let’s close the loop on Medicare with a brief description of its parts. Keep in mind, this does not consider your FEHB plan:
Parts of Medicare:Medicare Part A = Hospital insurance
Covers most in-patient medical expenses like hospital stays and home health care. Generally, no premium is required. But with Original Medicare there is a deductible before any hospitalization costs are covered.Medicare Part B = Medical insurance
Covers doctor visits, durable medical equipment, outpatient procedures and lab services. Most people pay a monthly premium and a deductible before Medicare covers services. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most doctor services.Original Medicare = Part A + Part B
Together, both parts provide coverage in and out of the hospital.Medicare Part C = Medicare Advantage
Offered by private insurance companies and approved by Medicare. It may offer more benefits at a lower cost than Original Medicare. You must sign up for Part A and Part B before enrolling in Medicare Part C.Medicare Part D = Prescription Drug Plan
Offered by private insurance companies to help pay prescription drug costs. It’s included in some Medicare Advantage plans or can be added to Original Medicare coverage.
Your first chance to sign upGenerally, when you turn 65*
This is called your Initial Enrollment Period (IEP). It lasts for 7 months, starting 3 months before you turn 65, and ending 3 months after the month you turn 65. For more information on how to enroll visit Medicare.gov.
*Exceptions apply if born on the first of the month or qualify for special enrollment.Medicare Enrollment:
- Visit Social Security website for more information and to enroll
- Call Social Security: 1-800-772-1213. (TTY: 1-800-325-0778)
Working beyond 65
It can be confusing to understand when to enroll in Medicare and how to pair it with your Federal Employees Health Benefits (FEHB) plan, especially when you’re still working. To help navigate this uncertainty and get more informed there are resources available.
Visit the Medicare website to see the right course of action when signing up for Medicare.
FEHB enrollment special exception
Becoming eligible for Medicare provides a federal retiree with a one-time opportunity to switch health plans. If you never used this option to switch plans when you became eligible, it’s not too late. There’s no time limit to this OPM rule.
Enroll in Medicare with your FEHB plan?
Enrolling in Medicare Part B is optional. It’s entirely your decision. However, here are some things to consider.
Current and future health status:
- Consider the health status of you and your spouse. Healthcare costs tend to increase with age, and Medicare Part B will help cover some of the costs.
- Be aware of your family history, many conditions can be inherited (for example, cancer, heart disease and diabetes).
- Even in good health, accidents and health concerns occur. Being prepared with Medicare Part B can help you maintain your financial security.
Current and projected costs compared to Medicare premiums:
- Compare your plans out-of-pocket limit to Medicare Part B premiums
- Compare your copayments, coinsurances, and deductible to Medicare Part B premiums
Plans that work with MedicareAetna Direct when Original Medicare is primary, and your provider accepts Medicare:
- Waived deductibles, copayments, and coinsurance
- $900 yearly fund that can help pay prescription costs or Medicare Part B premiums
- $0 deductibles, copayments, and coinsurance
- Up to a $900 reduction in Part B premiums for eligible members
Medicare Part B late enrollment penalty
Part B has a late enrollment penalty that will increase your monthly premium by 10% for every 12-month period you do not enroll after your Initial Election Period.
Your Initial Election Period ended September 30, 2017. You waited to sign up for Part B until the General Enrollment Period in March 2020. Your Part B premium penalty is 20%. (While you waited a total of 30 months to sign up, this included only 2 full 12-month periods.) You’ll have to pay this penalty for as long as you have Part B.
The Aetna federal retiree plans align well with Medicare, offering waived costs and extended coverage when member has Medicare Parts A and B. Visit AetnaFeds.com/RetireePlans to see how enrolling in Medicare enhances these plans for you.
Potential medical costs
As health care needs increase, the coverage you have will make a difference in the costs you incur. It is important to understand the various scenarios you may be faced with to help you make the best decision on your health coverage.
Retiree health scenario examples
In this guide we'll take a look at 3 Federal retirees*: John, Linda and Mary. Each chose a different FEHB plan in retirement. We’ll review how each retiree fared when using their health benefits in a variety of scenarios and see how their choices affected their annual out-of-pocket expenses.
*These are fictitious examples using actual FEHB rates and benefits.Download our guide below to see savings examples based on average FEHB plans.
Download our Retiree Health Scenario Examples (PDF)
Retiree Savings Calculator
Our newest tool, the Retiree Savings Calculator provides a customized financial estimate of your future health insurance costs. Many FEHB plans waive deductibles and copays for medical services when you have Original Medicare (Parts A and B) as primary, but you still need to consider your other out of pocket costs when choosing the right plan for retirement. These costs include your FEHB premium, Medicare Part B premium and your prescription costs. By providing personalized values of your premium and prescription drugs, this tool will offer a cost estimate of your Aetna Medicare Advantage plan savings.View calculator now