What to know about CSRS retirees and Medicare
Federal employees enrolled in the civil service retirement system (CSRS) may be eligible for Medicare and federal employee health benefits (FEHB) if they paid Medicare taxes.
The CSRS is a federal employee pension plan created in 1920. A CSRS retiree may be eligible for Medicare if they paid Medicare taxes on their earnings, even if they did not pay Social Security taxes.
However, federal employees can consider whether their FEHB, Medicare, or a combination of both is better for their circumstances.
During fiscal year 2022, the CSRS enrolled 1.6% of federal employees.
All federal employees, including those enrolled in CSRS, pay Medicare taxes at 1.45% of their gross income. This means they should also be eligible for Medicare when they turn 65 years old, or beforehand if they have specific health conditions.
Medicare is optional, and a person can choose not to enroll in Medicare and keep using their FEHB plan only. People can keep their existing FEHB if they have:
Original Medicare has two parts — Part A and Part B. Part A covers inpatient medical care, and Part B covers outpatient medical services and items.
If a person pays Medicare taxes for at least 40 quarters, which is the equivalent of around 10 years, their Part A coverage may be premium-free. Most people, including federal employees, may not pay a Part A premium.
Having extra inpatient coverage could be beneficial because of this. People may also consider whether choosing Part B benefits them.
A person’s FEHB plan can work alongside Medicare and supplement it, as Medicare may become their primary insurer.
Medicare Part B covers 80% of eligible outpatient medical costs, and a person must pay the remaining 20% coinsurance out of pocket. When using their FEHB alongside Part B, the FEHB plan may cover some or all of the coinsurance amount. Using a FEHB plan in this way is often called a wraparound benefit.
A person’s FEHB plan premium may not change if they enroll in Medicare. In fact, they must also pay the Part B premium, which in 2025 is a minimum of $185 per month.
Due to the inflation reduction monthly adjustment amount (IRMAA), the Part B premium increases depending on a person’s reported earnings from the 2 years prior. For example, if they report earnings above $106,000 in 2023, the Internal Revenue Service (IRS) can apply a surcharge to their Part B premium.
Enrolling in Part B may not be cost effective because of this and the person’s specific circumstances.
If someone needs help or advice on how their federal benefits work alongside Medicare, they can contact their local State Health Insurance Assistance Program (SHIP) at 877-839-2675 or by email at [email protected].
CSRS retirees may be eligible for Medicare, as all federal employees pay Medicare taxes.
However, as a federal employee, they may also have FEHB, which, depending on their circumstances, may or may not work well alongside Medicare.
A person’s FEHB plan or local SHIP office can offer further advice on Medicare enrollment as a federal employee.