Can I deduct my FEHB health insurance as a federal retiree?
I retired from the federal government in 2010 but retained by federal health insurance benefits. June 4, 2019 10:23 PM Can I deduct my FEHB health insurance as a self-employed federal retiree on Line 29 of Form 1040? Can I deduct my Medicare Part B premiums? Yes.
What is the difference between FEHB and Medicare?
Your FEHB plan also provides prescription drug coverage, routine physicals and a wider range of preventive services that Medicare does not. Some FEHB plans also provide coverage for dental and vision care.
What is the federal employees health benefits (FEHB) program?
iii What is the Federal Employees Health Benefits (FEHB) Program? The FEHB Program is the largest employer-sponsored group health insurance program in the world, covering almost 9 million people including employees, annuitants, and their family members, as well as some former spouses and former employees.
Why do FEHB premiums increase upon initial retirement?
So, their premium will increase upon initial retirement simply because the postal service is no longer helping to offset their cost. Going back to the regular employees, the most popular FEHB programs out there are the Blue Cross Blue Shield plans, so I’ll use that as an example.
Is Medicare Part B required for federal retirees?
Most people who have retiree coverage must enroll in Medicare Part A and Part B when first eligible. If they don't enroll, their retiree plan may pay only a small amount – or nothing at all – for their care. Medicare's rules for you are different, however, if you're a federal retiree.
Is FEHB considered creditable coverage for Medicare Part B?
Because all FEHB Program plans have as good or better coverage than Medicare, they are considered to offer “creditable coverage.” So, if you decide not to join a Medicare drug plan now, but change your mind later and you are still enrolled in FEHB, you can do so without paying a late enrollment penalty.
Can federal employees have both FEHB and Medicare?
The answer: yes! FEHB coverage is comparable to Medicare coverage. Therefore, beneficiaries in the federal program may delay joining a Part D plan; likewise, they're exempt from any Part D late enrollment penalties.
Is Medicare primary or secondary to FEHB?
your FEHB plan is the primary payer of health benefits expenses and Medicare is the secondary payer if you are employed in the federal service; Medicare is the primary payer and FEHB is the secondary payer if you are not employed in the federal service.
Can retired federal employees deduct health insurance premiums?
When you retire from federal services your health insurance premiums are no longer deducted on a pre-tax basis.
Can Medicare premiums be deducted from federal pension?
Frequently Asked Questions Retirement If you are not receiving social security benefits, you can have Medicare premiums withheld from your annuity payments. We must receive a request for the withholding from the Centers for Medicare and Medicaid Services.
Do I need Part B if I have FEHB?
Do I Have to Take Part B Coverage? You don't have to take Part B coverage if you don't want it, and your FEHB plan can't require you to take it. There are some advantages to enrolling in Part B: You must be enrolled in Parts A and B to join a Medicare Advantage plan.
Do you really need Medicare and FEHB as a federal employee?
Yes, the vast majority of the time you are required to get on Medicare A and B at 65 if you are on Tricare even if you are also covered under FEHB or still working.
Do I need both FEHB and Medicare?
Answer #1 —You don't need both. However, to quote OPM “generally, plans under the FEHB program help pay for the same kinds of expenses as Medicare.” In many cases FEHB proves to be more comprehensive, often including emergency care outside the U.S., as well as dental and vision, which Medicare does not cover.
Does Medicare Secondary cover primary deductible?
“Medicare pays secondary to other insurance (including paying in the deductible) in situations where the other insurance is primary to Medicare.
Do federal employees get Medicare Part B?
Federal Employee Health Benefits (FEHB) plans continue paying primary for retirees who do not enroll in Medicare Part B. FEHB is only secondary if you enroll in Part B. Whether to enroll in Part B or use FEHB as primary coverage is a personal decision, based on your individual circumstances.
How long do you have to be in FEHB before retiring?
In order for federal employees to be eligible to keep FEHB in retirement, they must have been covered under FEHB for at least five years immediately preceding their retirement, and they also must be enrolled in it on the day that they retire. Most employees know about this five-year rule; however, they’re not clear on what ...
How long do you have to be in the same FEHB plan?
Most employees know about this five-year rule; however, they’re not clear on what that five-year rule really means. It does not mean that the employee had to be in the same FEHB plan for those five years. Employees are permitted to change carriers, plans, and coverage type all within that five-year window. Likewise, if two federal employees are ...
How much does Medicare cost per month?
It covers things like doctors’ visits, preventative care, etc., and it runs about $149 per month per person for most people, depending on your income.
Does the government pay FEHB premiums?
A very common misconception that employees have is that the government will no longer pay a portion of the FEHB premium once an employee retires. That, in fact, is not true. The government will continue to pay roughly 72% of the overall premium, which means that the retiree will pay the same percentage (roughly 28%) that they did while they were still working.
Can you change your FEHB plan?
Likewise, if two federal employees are married to one another, they can switch between plans within the five-year window without any effect to their eligibility to keep FEHB in retirement.
Do you pay FEHB premiums after retirement?
Once employees retire, if they have chosen to keep their FEHB coverage in retirement, they will begin to pay the premium with after-tax money. While they’re working, they pay the FEHB premium with pre-tax money, but in retirement they pay it with after-tax money.
Do FEHB open seasons happen?
Myth #2: FEHB Open Seasons Only Occur While You’re Employed. Many federal employees think that the FEHB open seasons only happen while they’re employed, and that’s not the case. In fact, FEHB open seasons occur for federal retirees as well. They’re held at the exact same times; everybody can go in and make those changes.
What is FEHB premium?
You are a federal employee or retiree participating in the premium conversion plan of the Federal Employee Health Benefits (FEHB) program. Your share of the FEHB premium is paid by making a pre-tax reduction in your income.
What is Medicare D?
Medicare D. Medicare D is a voluntary prescription drug insurance program for persons with Medicare A or B. You can include as a medical expense premiums you pay for Medicare.
Is FEHB deductible?
If the FEHB premiums are paid with after-tax dollars for retirees (which I believe is the case), you premiums will be deductible. The above example sites the case for presently employed workers who have the premiums paid pre-tax. Regarding the Medicare premiums: Medicare A.
How to find out about federal benefits?
To learn about your federal benefits or get help with them, contact your agency's personnel or human resources office. And visit the Office of Personnel Management (OPM) website. You can also Contact OPM.
Who pays Social Security taxes?
Federal Employees Pay Social Security Taxes. All federal employees hired in 1984 or later pay Social Security taxes. This includes the president, the vice president, and members of Congress. It also includes federal judges and most political appointees. They all pay the same amount of Social Security taxes as people working in the private sector.
What is TSP retirement?
The Thrift Savings Plan (TSP) is a retirement plan for federal government employees and members of the military. Find the basics about participating - Eligibility, contributions, loans, withdrawals, setting up and managing your account. Learn about investment funds - Overview of fund types, fund options, and performance.
Does OPM have access to beneficiary information?
OPM and the Office of Federal Employees' Group Life Insurance (OFEGLI) do not have access to your records and cannot answer questions about coverage or beneficiaries.
What percentage of your gross income can you deduct for medical expenses?
Medical expenses that exceed 7.5% of your adjusted gross income can be deducted for tax purposes. Your out-of-pocket insurance premiums are considered eligible expenses. Track your spending on treatment-related travel and any purchases called for by a healthcare provider. You must itemize your taxes to get these deductions.
What are deductions for medical expenses?
Deductible Medical Expenses for Retirees. You can deduct the amount of your medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI). 2 Along with direct medical expenses, deductions allowed include the cost of insurance premiums, long-term care insurance premiums, and Medicare. Virtually all medically necessary costs ...
What is the threshold for medical deductions?
The current threshold for medical deductions is 7.5%.
Can you deduct health insurance premiums?
You also can't deduct any expenses you incur that are reimbursed or paid for by insurance. Health insurance premium payments made via an employer-sponsored health plan are not deductible because those payments are made with pre-tax income. 2.
Is dental whitening deductible for retirees?
Nondeductible Retiree Medical Expenses. The primary deduction exclusions are non-prescription, over-the-counter drugs and expenses that are more cosmetic in nature, like teeth whitening. Dietary supplements are deductible if they're recommended by a physician for a specific condition.
Is humidifier cost deductible?
Virtually all medically necessary costs prescribed by a physician are tax deductible. This means that if your doctor told you to add a humidifier to your home heating and air-conditioning system to relieve your chronic breathing problems, the device could be at least partially deductible. Travel expenses to and from medical treatments are also ...
Is retirement a good idea for 2021?
Updated April 13, 2021. Retirement offers a well-deserved opportunity to reap the rewards of a lifetime of hard work. Being able to enjoy retirement without financial worries takes some financial fine-tuning and expense cutting, though one area where expenses are likely to increase is health care costs.
Self-employed health insurance deduction for Medicare premiums
Self-employed people (who earn a profit from their self-employment) are allowed to deduct their health insurance premiums on Schedule 1 of the 1040, as an “above the line” deduction — which means it lowers their AGI.
Above-the-line deduction for people who are self-employed
If you’re self-employed, the self-employed health insurance deduction — putting your Medicare premiums on Schedule 1 of your 1040 — is the most direct way to reduce your tax burden. And as noted above, this is an “above-the-line” deduction, which means it reduces your adjusted gross income.
Additional considerations
So, let’s review: You’re self-employed, your business made money (congratulations!), and you’re ready to file. Here are few more things to remember before you get started.
Another alternative: Using your HSA funds to pay Medicare premiums
If you have a health savings account (HSA) , know that you can withdraw tax-free money from the account and use it to pay your premiums for Medicare Parts A, B, C, and D (but not Medigap premiums). This is an alternative to deducting your premiums on your tax return, since you can’t do both.
Get money back
There are no restrictions on how you can use your $800 reimbursement. Most claims will be reviewed within one to two business days after they have been received. Upon approval, you will receive reimbursement by direct deposit or check, depending on how you set up your account.
Submit your claim
You can submit proof of premium payments through the online portal, EZ Receipts mobile app (available at the App Store® and Google Play™) or by mail or fax. You have until December 31 of the following benefit year to submit your claim for reimbursement.