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When to Take Medicare If You’re Still Working with FEHB in Place

Missy E
November 14, 2025

Key Takeaways

If you’re still working in 2025 and covered under the Federal Employees Health Benefits (FEHB) Program, enrolling in Medicare isn’t always necessary at age 65. You may delay Medicare Part B without facing late enrollment penalties.
Knowing the right time to take Medicare depends on your specific job status, FEHB coverage, and whether you’re considered an active employee or a retiree by Medicare standards.

Understanding Medicare and FEHB While You’re Still Working

When you turn 65, Medicare eligibility begins. However, if you’re still actively employed in the public sector and covered by FEHB, your situation is different from someone who is fully retired. The decision to enroll in Medicare—especially Part B—while still working requires careful consideration. Timing matters, not just for your wallet, but for future health coverage options as well.

To get this right, you must first understand how Medicare interacts with FEHB and how your employment status affects your enrollment rights.

What Medicare Offers at Age 65

Medicare is divided into parts:

Part A (Hospital Insurance): Usually premium-free if you have at least 10 years of Social Security-covered work.
Part B (Medical Insurance): Covers outpatient services, doctors, preventive care—but with a monthly premium.
Part C (Medicare Advantage): Not relevant while you’re using FEHB and still employed.
Part D (Prescription Drug Coverage): Also typically unnecessary if you have FEHB.

Should You Take Part A at 65?

Most federal employees enroll in Part A at 65, even if they are still working. It’s free for those who qualify, and it acts as secondary coverage to FEHB in many situations. But you should know one critical caveat: if you have a Health Savings Account (HSA), enrolling in Medicare Part A (or B) stops your eligibility to contribute to it.

If you’re enrolled in a High Deductible Health Plan (HDHP) with an HSA and want to keep contributing, delay Part A.

Also, once you enroll in Social Security benefits, you are automatically enrolled in Part A. To avoid Part A, you must delay Social Security too.

The Key Question: Do You Need Part B While Still Working?

This is where many federal employees pause. Part B comes with a monthly premium. If your FEHB plan already provides comprehensive coverage, should you spend extra for Medicare Part B?

In 2025, the standard Part B premium is $185 per month. For higher earners, it can be more due to the Income-Related Monthly Adjustment Amount (IRMAA).

If you’re still working, you can delay Part B without penalty as long as you’re covered under FEHB due to active employment (not retirement). This is a crucial distinction.

Are You Considered an Active Employee?

The definition of “still working” must match Medicare’s definition of active employment—meaning you’re currently on the payroll, not just receiving retiree benefits.

Yes, you’re working full-time and receiving FEHB through your job: You can delay Part B with no penalty.
No, you’re retired but maintaining FEHB coverage: You are no longer considered an active employee. Delaying Part B now could lead to penalties and limited enrollment windows.

When Do Late Enrollment Penalties Apply?

If you miss your Initial Enrollment Period (IEP) for Medicare and are not actively employed, you could face:

A 10% penalty per 12-month period you were eligible but didn’t enroll in Part B
A limited window—the General Enrollment Period from January 1 to March 31—to sign up

But if you’re covered by FEHB due to current employment, you qualify for a Special Enrollment Period (SEP). This lets you sign up for Part B any time while still employed or within 8 months after your job (and FEHB) ends.

What Happens When You Retire?

Once you retire, your FEHB status changes from active employment to annuitant. At that point:

Medicare becomes primary
FEHB becomes secondary
If you didn’t take Part B while working, you now have 8 months to enroll penalty-free via SEP

Missing this window means waiting for the next General Enrollment Period and possibly paying penalties.

Why Some Still Choose Part B While Working

Even though it’s not required, some government employees voluntarily enroll in Part B at age 65. Reasons include:

Lower out-of-pocket costs for certain services
Access to providers who prefer Medicare billing
Preparation for retirement—no SEP worries later

However, these benefits may not outweigh the cost if your FEHB plan already covers your needs efficiently.

Should You Take Part D While Still Working?

For most public sector employees with FEHB coverage, Part D is unnecessary while still working. FEHB plans include prescription drug coverage that is creditable, meaning it’s at least as good as Medicare’s standard.

You will not face penalties for delaying Part D as long as you maintain FEHB coverage through your job.

Planning Ahead: What to Do Before Turning 65

To make the right Medicare timing decision, take these steps in the months leading up to your 65th birthday:

Review your FEHB coverage to understand what it includes and how it compares to Medicare.
Confirm your employment status for Medicare’s purposes. Only current employment counts for SEP rights.
Consider HSA implications if you’re in a High Deductible Health Plan.
Decide whether you want to apply for Social Security. If you do, Part A comes automatically.

After Retirement: Medicare Takes the Lead

Once your federal employment ends, the balance between FEHB and Medicare shifts:

Part A and B become primary for healthcare services.
FEHB becomes secondary, which can fill in gaps Medicare doesn’t cover.

You may now want to reconsider your Medicare options even if you previously delayed Part B. Some FEHB plans offer enhanced coordination with Medicare, such as:

Waived deductibles and copays
Lower prescription costs
Reduced out-of-pocket maximums

Delaying Part B until retirement ensures you don’t pay unnecessary premiums while still working. But enrolling soon after retirement can open up cost-saving advantages within FEHB.

When Your Spouse Has FEHB or Medicare

The rules also vary if you’re covering a spouse under FEHB or if your spouse becomes eligible for Medicare first.

If your spouse is not employed and turns 65, they should enroll in Medicare even if you’re still working, because they’re not considered an active worker.
If your spouse is working and has their own FEHB, they may also delay Part B without penalty.

Each spouse’s Medicare enrollment should be based on their individual work and coverage situation.

Common Missteps to Avoid

Assuming FEHB lets you delay Medicare indefinitely: Only active employment protects you from penalties.
Automatically signing up for Medicare: Not always necessary while working.
Failing to plan ahead for Medicare coordination: After retirement, the timing of enrollment can impact your benefits.

Smart Coordination Begins Before Retirement

To keep your healthcare costs manageable and avoid gaps in coverage, it’s essential to map out your FEHB and Medicare strategy in advance. Don’t wait until retirement to understand your options. Start thinking about this as early as age 64—or even sooner.

If you’re unsure, speak with a licensed professional listed on this website who understands how public sector benefits and Medicare work together.