Posted on Friday, 21st September 2018 by

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Updated 11/11/2024

I presented a briefing for the Employee’s Retirement Club at the Food and Drug Administration (FDA) at the invitation of the group’s chairperson. We discussed a number of topics including FEGLI, Long Term Care, and Medicare signup. There was some confusion about the ability to defer Part B premiums if your spouse continues to work and you both are covered under a FEHB plan. Fortunately, one of the participants was able to provide clarification based on her research.

 

 

When I turned 65 my wife was already retired therefore I immediately signed up for Medicare parts A and B. I didn’t have the option to defer Part B because my business is a single owner LLC and does not offer health insurance. My wife and I are covered under my FEHB enrollment.

The First Step

If you are still working and have health coverage from your employer your spouse can defer signing up for Part B and sign up later without penalty per the Medicare Booklet, page 19.

According to Medicare, you will not pay a penalty “as long as you’re eligible for and enroll during a Special Enrollment Period. If you wait to enroll in Part B because you or your spouse are working and have group health coverage through an employer or union based on this current employment, you can enroll during a Special Enrollment Period. You can sign up for Part B during one of these times:

  • Any time you’re still covered by an employer or union group health plan, through you or your spouse’s current or active employment
  • During the 8-month period that begins the month after the employer or union group health plan coverage ends, or when the employment ends (whichever is first)”




Part B Premiums

The Part B Medicare premium for those signing up for the first time in 2024 is $174.70 a month.  Use OPM form 2809 to document that you and your spouse are covered by an FEHB plan if you do decide to defer enrollment and discuss this with your agency’s retirement counselor or HR department.

One of the primary reasons people decide to defer signing up for Medicare Part B is due to the income adjusted amount individuals must pay if their total income is over certain limits. According to Medicare, if your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you’ll pay the standard premium amount and an Income Monthly Adjusted Amount, also known as the IRMAA is an extra charge added to your premium.”

Review the IRMAA 2024 premiums online. We will publish the 2025 rates as soon as they are released.

For example, if in 2024 you sign up for Medicare Part B and your Joint income was equal to greater than $206,000 and less than $258,000 as reported on your 2023 tax return your Medicare Part B premium would be $244.60 per person.  Your modified adjusted income includes most of your income without any exemptions. The top monthly rate for incomes greater than or equal to $750,000 for joint filers is currently $594.

Those subjected to these higher rates may find it advantageous to defer signing up until their working spouse retires.

Here is a list of articles that cover sighing up for Medicare that you may find helpful. They include an in-depth discussion on this subject:

There are distinct advantages to signing up for Part B since most FEHB providers pay all of the coinsurance, deductibles and copayments when Medicare is your primary provider. Take your time deciding on what direction you will take, there is much to consider and the impact on your finances can be significant if you make the wrong decision for your circumstances.

Helpful Retirement Planning Tools / Resources

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Disclaimer: Opinions expressed herein by the author are not an investment or benefit recommendation and are not meant to be relied upon in investment or benefit decisions. The author is not acting in an investment, tax, legal, benefit, or any other advisory capacity. This is not an investment or benefit research report. The author’s opinions expressed herein address only select aspects of various federal benefits and potential investment in securities of the TSP and companies mentioned and cannot be a substitute for comprehensive investment analysis.

Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author’s best judgment as of the date of publication, and are subject to change without notice. The author explicitly disclaims any liability that may arise from the use of this material.

Last 5 posts by Dennis Damp

Posted in ANNUITIES / ELIGIBILITY, BENEFITS / INSURANCE, FINANCE / TIP, SOCIAL SECURITY / MEDICARE, SURVIVOR INFORMATION, UNCATEGORIZED | Comments (6)


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6 Responses to “Deferring Medicare Part B Enrollment”

  1. linda Says:
    September 24th, 2018 at 6:09 pm

    Dennis:
    I’m not sure about what you said about OPM form 2809

    I have FEHB with self+one for my husband. When he claims his Social Security income at his FRA, he has to submit OPM form 2809 to SSoffice to decline Plan B? (I’ll still work at Fed)

    thanks

  2. Mike Pope Says:
    September 25th, 2018 at 6:37 am

    A caveat to this is if you have Tricare you MUST participate in Part B to continue Tricare coverages. There is no deferment, at least according to Tricare.

  3. Dennis Damp Says:
    September 25th, 2018 at 9:52 am

    Yes, that is a requirement for Tricare.

  4. Dennis Damp Says:
    September 25th, 2018 at 10:11 am

    Actually, as long as you are working and he is covered under you plan, all he needs to do is apply for part B medicare under a Special Enrollment Period (SEP) when you retire. Since Part A is free, most sign up at the first opportunity. If the person retiring is covered under a still working spouse’s FEHB or private sector plan the retiring person can defer Part B enrollment without penalty until the still working spouse retirees and stops working. The OPM 2809 form is for annuitants, those who are retired or soon to retire. It allows the person retiring to make changes to their FEHB coverage if desired for many other reasons, all outlined on the form including event code 2L that allows changes to your FEHB plan when you become eligible for Medicare. Many change to a lower cost FEHB plan when both husband and wife are 65 and sign up for Medicare A and B. Plus this form allows you to change, suspend or cancel coverage for a number of reasons.

    This form can also be used when both spouses work for the government and the older spouse is retiring and he/she carried FEHB self plus one or family coverage. The younger spouse would apply for FEHB self plus one coverage preferably during the last open season, and the retiring party could then cancel or suspend their coverage using this form. This would allow the retiring spouse to defer part B premiums without penalty when they sign up later when the younger spouse retires. It is complicated and talk with a HR retirement specialist to get the timing right. There was also a question about having 5 years continuous FEHB coverage and this change has to be coordinated properly to insure FEHB coverage for both parties in retirement.

    Generally, when you defer signing up for Medicare Part B because you are covered by your spouse’ health insurance you will have to sign up for part B under what Medicare calls a Special Enrollment Period (SEP) when your spouse stops working. The Medicare part B application will ask you specific questions about your previous health care coverage to determine if a penalty is warranted.

    You can call Medicare for additional guidance.

  5. linda Says:
    October 2nd, 2018 at 1:32 pm

    Thanks, Dennis for detailed explanation.

    I also have 2 other questions in mind and couldn’t find answer:

    1. When I have FEHB self+one while working and my husband has Medicare A when he claim Social security, there won’t be any FEHB premium change except that his Medicare A will pick up tab as secondary insurance carrier, correct?

    2. Currently I contribute to HSA family package. Can I keep contributing to Single HSA (my own) when my husband start Medicare A?

    Thanks

  6. Dennis Damp Says:
    October 6th, 2018 at 6:47 am

    When your husband signs up for Medicare part A your FEHB plan becomes the secondary provider, Medicare the primary provider for Part A services for your husband. You have to notify your FEHB provider that your husband has signed up for Medicare part A. Your husband’s primary coverage for doctor’s visits will remain with your FEHB provider until such time that he signs up for Part B. It’s important to notify your FEHB provider when your husband signs up for Part A and later for Part B because your FEHB program will then pick up deductibles, copayments and coinsurance payments for him. I believe you can still maintain your HSA and since your husband isn’t signing up for Part B call your FEHB provider for clarification, they will be able to help.