Key Takeaways:

• FEHB plans generally provide creditable prescription drug coverage, which can impact the need for Medicare Part D among federal retirees.
• Federal retirees should annually review rule changes, coordination details, and personal medication needs to make informed choices about drug coverage.

Medicare Part D and FEHB: 7 Key Facts for Federal Retirees in 2026

Understanding how Medicare Part D and the Federal Employees Health Benefits (FEHB) program work together is essential for federal employees and retirees in 2026. Prescription drug coverage rules can be complex, but knowing the fundamentals helps ensure you make well-informed decisions about your health care in retirement. Here are seven pivotal facts to guide you as you navigate coverage decisions this year.

What Is Medicare Part D?

Overview of Medicare Part D

Medicare Part D is a federal prescription drug benefit available to individuals with Medicare. Established by the Medicare Prescription Drug, Improvement, and Modernization Act, Part D helps cover the cost of outpatient prescription medications. It operates through private plans approved by Medicare, which are renewed each year and must meet government standards for coverage.

Prescription Drug Coverage Explained

Part D plans come with formularies, or lists of covered drugs, and set different costs depending on the specific medication. Coverage includes generic and brand-name prescriptions, with each plan having its own tiers, pharmacy networks, and cost-sharing requirements. In 2026, legislative changes may require Part D plans to update their covered medications and cost structures, so it’s important to review plan materials annually.

What Is FEHB Prescription Coverage?

FEHB Prescription Benefit Basics

The FEHB program provides comprehensive health insurance options to eligible federal employees, retirees, and their dependents. Most FEHB plans also include prescription drug coverage within the overall medical policy, covering a wide selection of medications—both generic and brand-name—through designated pharmacy networks.

How FEHB Covers Medications

FEHB prescription benefits generally operate with drug tiers, copayments, coinsurance, and out-of-pocket maximums. While the specifics differ by plan, FEHB prescription coverage often meets or surpasses the Medicare standard for “creditable coverage.” This is important because it affects whether enrolling in Medicare Part D is necessary for federal retirees.

How Do FEHB and Part D Work Together?

Coordination of Benefits

If you are enrolled in both a FEHB plan and Medicare Part D, coordination of benefits comes into play. In this scenario, the FEHB plan typically pays first, acting as the primary payer. Medicare Part D acts as secondary coverage, which may help fill prescription gaps or reduce certain out-of-pocket costs depending on your medication needs and plan structures.

Rules for Using Both Plans

According to the U.S. Office of Personnel Management, if you participate in both FEHB and Part D, you cannot use both benefits to pay for the same prescription at the same time. However, you can use Part D for medications not covered under FEHB or vice versa, depending on your prescription requirements. It’s important to keep all involved parties informed of your multiple coverages to avoid billing issues or coverage denials.

Is Medicare Part D Required With FEHB?

Eligibility and Enrollment Rules

Federal retirees eligible for Medicare can enroll in Medicare Part D, but you are not required to do so if you have FEHB coverage. That’s because most FEHB prescription coverage is deemed “creditable.” This means it is expected to pay, on average, as much as the standard Medicare Part D benefit. As long as your FEHB plan maintains this status, you may defer Part D enrollment without penalty.

Consequences of Not Enrolling

If you don’t enroll in Medicare Part D while covered by a creditable FEHB plan, you can generally enroll in Part D later without incurring a late enrollment penalty. However, if your FEHB coverage ends and you do not have other creditable coverage, you may face late penalties for enrolling in Part D after the initial eligibility period.

What Happens If You Delay Part D Enrollment?

Late Enrollment Penalty

Medicare Part D imposes a late enrollment penalty if you go without Part D or other creditable prescription drug coverage for more than 63 continuous days after becoming eligible. This penalty is calculated based on the number of months you were without qualified coverage and is typically added to your monthly Part D premium for as long as you have the plan.

Exceptions for FEHB Enrollees

The exception to this rule benefits federal retirees: as long as your FEHB prescription coverage is considered creditable, you can delay enrolling in Medicare Part D without facing penalties. When you eventually enroll in Part D, you will need to provide documentation proving that you were continuously covered by a creditable plan.

Does Part D Affect FEHB Premiums or Coverage?

Impact on FEHB Premiums

Enrolling in Medicare Part D does not change your FEHB premiums. Your FEHB plan’s rates and structure remain unchanged whether or not you choose to add Medicare Part D coverage. Premiums for FEHB are determined annually through the federal government’s contracting process and are not tied to Medicare choices.

Coverage Coordination Considerations

While premiums remain unaffected, adding Part D may change how claims are processed or what medications are available at the lowest out-of-pocket cost. Both programs must work within federal rules, so you should consult your plan documents to see how benefits coordinate. It’s important to compare formularies and out-of-pocket costs to decide if enrolling in both programs makes sense for your situation.

What Should Federal Retirees Consider in 2026?

Reviewing Your Prescription Needs

Each year, revisit your prescription needs and review your FEHB plan materials for any changes in drug coverage or formulary. Medicare Part D plans can also adjust their covered medications annually. Assess whether your current plan meets your prescription needs or if adding—or deferring—Part D enrollment would be beneficial based on your situation.

Recent Rule Updates and Changes

In 2026, legislative and policy changes may affect Medicare Part D benefits, FEHB coverage rules, or the coordination process between plans. The Office of Personnel Management regularly publishes updates regarding FEHB plan designs, and the Centers for Medicare & Medicaid Services issues official guidance for Medicare plans. Keeping informed of these annual updates ensures you are aware of your options and obligations.

Frequently Asked Questions

Are federal retirees required to enroll in Medicare Part D if they have FEHB?

No, you are not required to enroll in Medicare Part D if your FEHB coverage is “creditable.” You may choose to enroll later if your circumstances change, usually without facing a penalty.

How do I know if my FEHB plan is creditable for Medicare prescription coverage?

Each year, your FEHB plan provides a notice of creditable coverage. Retain this documentation in case you ever decide to enroll in Medicare Part D in the future.