how does medicare work for usps

• Integrating the Postal Service

’s Federal Employee Health Benefits (FEHB) plans with Medicare would benefit both USPS and its retirees. When postal employees retire and are enrolled in Medicare, their Medicare coverage becomes their primary health coverage and their FEHB plans become their secondary health coverage.

Full Answer

How does Medicare Part B work with USPS health insurance?

If the retiree elects Part B and maintains their USPS-provided health insurance, then the USPS plan functions like a “Medicare supplement” or “Medigap” plan that private-sector retirees are accustomed to buying on their own, filling in the gaps that Medicare doesn’t cover.

Should the US Postal Service integrate with Medicare?

• Integration with Medicare would ensure that the Postal Service would be able to provide retiree health care for employees into the future. However, it’s important to understand that this proposal alone won’t restore USPS to financial stability.

How much will the Postal Service’s retirement plan save Medicare?

According to the Congressional Budget Office, the move could save the postal retirement and health programs about $5.6 billion through 2031 while adding $5.5 billion in costs to Medicare during that span, and probably much more in later years. Considering the massive size of Medicare — it spent $926 billion in 2020 — the costs don’t amount to much.

Will Medicare be required for post office retirees?

This story also ran on NPR. It can be republished for free. The Postal Service Reform Act of 2022 would help shore up post office finances by ending the unusual and onerous legal requirement to fund 75 years of retirement health benefits in advance. In return, it would require future Postal Service retirees to enroll in Medicare.

Do USPS employees get Medicare?

Law requires postal retirees to enroll in Medicare. The landmark Postal Service Reform Act (H.R. 3076) Congress passed this week ends the mandate that the Postal Service pre-fund its retiree health benefit costs and requires postal workers to enroll in Medicare Parts A and B when they turn 65.

Do retired postal employees get Medicare?

When they retire they have several choices for health care, including staying in their original plan or switching to Medicare as their primary coverage and having an FEHB plan serve as supplementary coverage. About 20% of postal retirees do not sign up for Medicare, preferring their current federal plan.

Do postal workers pay into Social Security and Medicare?

Federal Employment Retirement System (FERS) FERS pays less than CSRS, but postal workers are eligible for Social Security and Thrift Savings Plan (TSP) payments. Postal workers pay into FERS and Social Security each pay period. Tax-deferred contributions to TSP are made by the USPS and the employee.

Does USPS have free health insurance?

Similar to most other federal agencies, the USPS offers health care benefits to its employees, retirees, and their dependents through the Federal Employees Health Benefits Program (FEHB), which is administered by the Office of Personnel Management (OPM).

Do postal workers get a pension and Social Security?

Current postal workers and those hired after 1983 pay into the Federal Employees Retirement System (FERS) and are eligible for Social Security benefits.

Are federal retirees automatically enrolled in Medicare?

Signing Up for Medicare If you are retired and receiving Social Security you will automatically be enrolled in Part A and B and should receive your Medicare card three months before your 65th birthday.

How long do you have to work for USPS to get a pension?

Federal and postal employees under the Civil Service Retirement System (CSRS) and Federal Employees Retirement System (FERS) are eligible for voluntary early retirement if they're at least 50 years of age, with at least 20 years of service, or any age with at least 25 years of service.

What retirement benefits do postal workers get?

If you leave with at least 5 years but less than 10 years of service, you're eligible to apply for retirement at age 62. The benefit is calculated as 1% times your high-3 years average salary times the years and months of service.

Can you retire from USPS after 20 years?

Postal Inspectors are the only postal employees subject to mandatory retirement because of age. They are subject to mandatory retirement on the last day of the month in which they become 57 years of age or complete 20 years of law enforcement service if then over that age.

Does USPS have good health benefits?

The Postal Service participates in the Federal Employees Health Benefits (FEHB) Program, which provides excellent coverage and flexibility with most of the cost paid by the Postal Service.

How do I get USPS health insurance?

Two ways to enrollBy Phone. Call 1-877-477-3273, Option 5.By Fax. 202-268-0359.Online. Visit the LiteBlue Page. Tips for enrolling online. Visit the LiteBlue page at https://liteblue.usps.gov. Have your Employee Identification Number and USPS PIN ready. Type https://ewss.usps.gov in your browser's address bar.

What percentage of health insurance does the USPS pay?

Feds see rise in Health Premiums for 2017 U.S. Postal Service employees will pay an average of 11.7 percent more for their premiums — or $16.32 per paycheck — a slight decrease from the 2016 bump. Self-only enrollees will pay 11.5 percent more; self-plus-one, 12.9 percent; and self-and-family, 11.6 percent.

When will Medicare be integrated into USPS?

Aug. 22, 2019 at 9 a.m. Integrating the Postal Service’s Federal Employee Health Benefits plans with Medicare would benefit both USPS and its retirees. To help restore USPS to financial stability, the organization’s leaders for many years have called for Medicare to be fully integrated into postal retiree health plans.

Does FEHB cover Medicare Part B?

While retirees would have an additional cost associated with Medicare Part B coverage, many FEHB plans eliminate the deductibles, copa ys and coin surance for retire es who en roll in Medicare . Some plans offer additional incentives such as lower copays for prescription drugs for participants who enroll in Medicare.

When does Medicare enroll?

Medicare Initial Enrollment Period (IEP) If you get Social Security retirement or disability benefits before age 65, the Social Security Administration will automatically enroll you in Medicare Parts A and B the month you turn 65.

How much does Medicare pay for hospital stays?

Original Medicare has deductibles for inpatient hospital stays, medical coverage and coinsurance. Medicare usually pays 80 percent of the Medicare-approved amount for medically-necessary care. The coinsurance is usually 20 percent of the Medicare-approved amount.

What is Medicare Part A and Part B?

Medicare Part A and Part B is referred to as “original” Medicare. Medicare Part A is hospital insurance. It covers inpatient care in hospitals; it also includes coverage in critical access hospitals and skilled nursing facilities. It covers hospice care and home health care, though you must meet certain conditions to get these benefits.

When is the Medicare enrollment period?

Medicare General Enrollment Period (GEP) The General Enrollment Period is the time period from January to March 31 of every year when you can enroll in Medicare Part B for the first time. If you enroll during the General Enrollment Period your Medicare Part A and B coverage will begin on July 1. In most cases, you’ll have to pay a late enrollment ...

Is Medicare for people over 65?

(This article first appeared in the January/February 2020 issue of the American Postal Worker magazine) Medicare is health insurance for people 65 and older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease.

Is there a late enrollment penalty for Medicare?

There is usually no late enrollment penalty. This is the eight (8) month period from the month you retire or the employer/union group health plan ends to enroll in Medicare Parts A and B. There are other circumstances that will allow you to enroll in Medicare Parts A and B during the Special Enrollment Period.

What is offset pension?

The purpose of the government pension offset is to eliminate windfall payments to retired government workers who have their own pensions and who also would receive Social Security benefits as a spouse or surviving spouse. The government pension offset applies only to Social Security benefits for a spouse or surviving spouse. It does not apply to Social Security retirement or disability benefits based on a person’s own work covered by the program even if the person also receives a government pension. Social Security benefits paid to spouses and surviving spouses are offset by the amount of any public (federal, state, local) retirement benefits payable to the spouse on the spouse’s own work in noncovered public employment.

What is the MBF formula?

The 1983 amendments to the Social Security law provide for a modified benefit formula (MBF) designed to eliminate windfall Social Security benefits. The Social Security benefit computation formula has always been weighted to replace a higher portion of preretirement earnings for workers with low earnings than for workers with substantial earnings under Social Security. Although this weighted formula is intended to benefit workers with a history of low earnings, it also works to the advantage of persons who had substantial income from jobs not covered by Social Security. The MBF eliminates the excess benefit provided to such persons by using a less heavily weighted benefit formula to calculate benefits. Also, the provisions of the MBF guarantee that the reduction in the Social Security benefit cannot exceed one–half of that part of the pension based on noncovered employment after 1956.

How is 575.5 calculated?

575.5 Computation of Benefits. Retirement benefits are generally computed using a worker’s yearly earnings beginning with 1951 (or with attainment of age 22, if later) up to the year the employee reaches age 62. Only earnings up to the maximum creditable under Social Security for each year may be used.

What is the Medicare withholding rate for 1990?

Beginning in 2000, the age at which this withholding rate applies will increase as the retirement age increases. 575.32 Medicare.

What is the application for Social Security 575.11?

575.11 Application Required. Social Security benefits are not paid automatically . Claimants must file an application for benefits with the nearest Social Security Office. 575.12 Retirement Benefits. A fully insured employee is eligible to receive monthly retirement benefits as early as age 62, but at a reduced rate.

What age do you have to be to get SS?

Automatic Enrollment. Persons entitled to Social Security retirement or disability benefits will automatically be enrolled at age 65 in both the basic hospitalization plan (Part A) and the voluntary supplementary medical insurance plan (Part B).

What age can you work and still get health benefits?

An employer must offer workers age 65 or older the same health benefits under the same terms and conditions as those offered to workers under 65. An employee who continues to work after 65 has the option to accept or reject coverage under the Federal Employees Health Benefits Program (FEHBP).

Why is the USPS required to fund retiree healthcare in advance?

And, again, one of the reasons why the USPS was required to fund its retiree healthcare in advance was that it can’t eliminate the liability absent a literal Act of Congress. But another issue is that its liabilities in this respect are substantially higher than in the private sector.

Does USPS have the same health benefits as federal employees?

In the first place, it is simply the case that USPS employees retain the same retiree healthcare benefits as (all other) federal employees (the FEHB, Federal Employees Health Benefits), and those benefits are far more generous than in the private sector.

What to consider when taking Medicare at 65?

There’s a lot to think about with respect to Medicare and your FEHB plan. The first consideration is your health, both today and in the future. Sometimes at 65, your health looks pretty good and so it might dissuade you from taking on another type of insurance (and another bill). You really want to consider how your health may look over the remainder of your lifetime. Since we’re living longer, we have a greater chance of needing more health care services as our health naturally deteriorates.

What is combination 2?

Combination #2 is to do the exact opposite of Combination #1. A retiree goes ahead and enrolls in Medicare Part B and he drops FEHB completely and permanently. There are several reasons that I am not thrilled with Combination #2. The first is, in this scenario, the only coverage that is in force is Medicare. Many physicians do not want to see patients when Medicare is the only coverage that they have. The reason being is that the payouts under the Medicare program are relatively low, and physicians would much rather see patients who have full coverage, and therefore, they’re paid more for the services they render. This is a very important distinction from the physician’s standpoint, and whether we like it or not, that’s just the way the world turns out there with physicians, insurance and health care.

What is the Medicare Part B premium for 2021?

In 2021, the Part B premium is up to $149 per month per person.

What is Medicare Part C?

Part C is an HMO-style program. It’s also called Medicare Advantage. These plans often have networks, which means you must see certain providers and go to certain hospitals in the plan’s network to get care. People who are enrolled in Medicare Part C must also be enrolled in Medicare Parts A and B.

What are the parts of Medicare?

The main parts of the Medicare program are Parts A, B, C and D . Medicare Part A is hospital insurance. It covers things like inpatient hospital care, skilled nursing facilities, hospice care, lab tests, surgery, home health care on a limited basis, so kind of the hospital coverage that you’ve known to expect.

Why are retirees afraid of the rising costs?

The first natural consideration is their health. The need for proper health insurance becomes very apparent when someone’s health begins to decline and that’s the reason why so many retirees are fearful of the rising costs in retirement. Oftentimes, we find that retirees are relatively healthy at the age of 65.

How many months before your 65th birthday?

It’s essentially the seven months surrounding your 65th birthday, so it’s the three months prior to the month you turn 65, the month you turn 65, and the three months after the month you turn 65. That’s the window that this decision is typically made.