A federal employee is eligible to continue Federal Employee Health Benefits (FEHB) program health insurance benefits during retirement if the employee fulfills the following two requirements:
1. The employee is eligible for an immediate retirement under CSRS or under FERS, or under another retirement system for civilian employees. Also included under FERS is the FERS “MRA + 10” and “MRA + 20” immediate retirement.
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2. The employee has been continuously enrolled (or been covered as a family member) in any FEHB program health plan for the five years of service immediately before the date the CSRS or FERS annuity starts, or if less than five years, the full period(s) of service since the employee’s first opportunity to enroll.
When a retiring employee elects not to enroll in the FEHB or to cancel his or her enrollment, the employee must certify either election by his or her signature on the Health Benefits Election form (SF 2809) (Health Benefits Election Form) that the employee understands the effect this cancellation of FEHB enrollment has on eligibility to carry FEHB health insurance coverage during retirement.
Note the following with respect to FEHB health insurance in retirement:
• A federal employee who is eligible to keep FEHB program enrollment in retirement pays the same percentage of FEHB program health insurance premiums as he or she did as an employee; namely, on average 25 to 28 percent of the premiums no matter which FEHB program health plan the retiree is enrolled and which type of coverage the retiree has (self only, self plus one, or self and family). The federal government pays the remaining 72 to 75 percent of the premium.
• Retiring employees who are eligible to keep their FEHB program insurance in retirement can keep eligible family members (spouses and children under the age of 26) on their FEHB program health insurance.
Retired federal employees who keep their FEHB program insurance in retirement can use their FEHB program insurance as a Medicare supplemental insurance policy when they enroll in Original Medicare (Medicare Part A and Medicare B).
Additional Guidance on the Five-Year Service Requirement
The following is some additional details about the five-year service requirement in order to keep FEHB program insurance coverage in retirement:
1. The five-year period requirement ends on the effective date of an employee’s retirement. For FERS employees, no matter which day of the month a FERS employee retires under immediate retirement rules, the employee’s effective date of retirement is the first day of the following month. The following example illustrates:
Example 1. Jean retired from federal service under FERS on December 30, 2023. Jean’s effective date of her retirement is January 1, 2024. Jean is eligible to receive her first FERS annuity check dated February 1, 2024.
For the purpose of the five-year requirement, Jean must have been continuously enrolled in any FEHB health plan for the five-year period January 1,2019 through January 1,2024. Jean is not required to be enrolled in the same FEHB program health plan for all five years. If Jean is married and her spouse is a federal employee who is enrolled in the FEHB program, then if Jean is enrolled in the FEHB program at any time during the five-year period through her spouse (as part of self plus one or self and family coverage), then Jean fulfills the five-year requirement through that enrollment.
2. “MRA + 10” and “MRA + 20” postponed retirement. If a FERS employee leaves federal service in order to postpone the start of his or her FERS annuity under the “MRA + 10” or “MRA + 20” retirement options, then the employee will not be enrolled in the FEHB program until the annuity starts. FEHB program enrollment will be suspended. The departed employee will be eligible for temporary continuation of coverage under the FEHB program. The departed employee may then choose to resume FEHB program coverage on the date selected for the FERS annuity to begin.
3. For purposes of continuing FEHB program into retirement, “service time” means time in a position in which an individual was eligible to be enrolled in a FEHB health program. Continuous coverage includes: (1) Time covered as a family member under other family member’s (spouse) FEHB enrollment; and (2) Time covered under the Uniform Services Health Benefits Program, also known as TRICARE. Coverage under Medicare does not count in determining continuous coverage. Service as a Non-Appropriated Fund (NAF) employee does not count in determining continuous coverage. This is because NAF service is not considered federal service.
4. Breaks in service are not counted as interruptions when the five years of service requirement is determined. This is the case provided the employee reenrolls within 60 days after his or her return to federal service. The following examples illustrate:
Example 2. Jerry elected FEHB program coverage on March 11,2016 and had a break of service from January 1,2020 through January 1,2022. Upon his return to service, he elected to enroll in the FEHB program, effective January 2, 2022. Jerry retires from federal service on December 31,2023 at the age of 64. He is eligible to continue his FEHB program benefits into retirement. This is because he has been continuously enrolled for the five years of service prior to retirement. The period January 1,2020 through January 1,2022 does not count because Jerry was not in federal service and therefore ineligible to be enrolled in the FEHB program.
Example 3. Maria entered federal service in 2016 and at that time, she elected not to enroll in the FEHB program. She left federal service in early 2017 and was rehired in late 2017. At that point, Maria elected to enroll in the FEHB program. When she retired in 2021, Maria was not eligible to continue FEHB program health benefits in retirement because she was not covered for the five years of service before her retirement. Her 2017 rehire date does not count as her first opportunity to be insured because of her prior federal employment in which she elected not to enroll in the FEHB program.
5. Eligibility as a temporary employee. An employee’s decision not to enroll as a temporary employee eligible for FEHB program coverage does not affect the employee’s future eligibility to continue as a retiree. Only service for which the federal government contributes toward the cost of health benefits counts in determining whether the individual has met the five years of service requirement to continue as a retiree
6. Eligibility under Temporary Continuation of Coverage. Enrollment or eligibility for enrollment as a former employee under Temporary Continuation of Coverage (TCC) provisions is not considered when determining whether an individual meets the five years of service requirement. However, the time an employee is eligible to enroll in an FEHB health plan and was covered as a family member under the TCC enrollment of another person does count toward the five years of service requirement.
Employees Within 5 to 10 Years of Retirement and Who Have Not Met the Five-Year Service Requirement to Continue FEHB Coverage in Retirement
Those federal employees who are within 5 to 10 years of retirement and who are not enrolled in the FEHB program for any reason, may want to consider joining the FEHB program during the next open season. Reasons for not being enrolled in the FEHB health program include being married to a non-federal spouse and the spouse carries the health insurance. By enrolling in the FEHB program during the open season, the employee can initiate the five years service requirement in order to keep FEHB insurance in retirement.
There are several reasons for this recommendation. First, the federal employee could get divorced and lose access to their soon-to-be ex-spouse’s health insurance. Second, the spouse could leave their employer and lose health insurance coverage. Third, there is no guarantee that the spouse will have health insurance coverage when the spouse retires from the company. If the company provides health insurance for its retirees, then the company may not allow spouses to be included on the retiree’s health insurance coverage.
