The Five-Year Test

Details of the requirements for continuing federal health benefits into retirement.

The issue of maintaining health insurance coverage is very important for federal employees getting close to retirement. Those who carry insurance under the Federal Employees Health Benefits Program into retirement enjoy annual health benefit open seasons, continued government contributions toward the cost of premiums and coverage for family members.

To be sure you can continue your valuable FEHBP coverage into retirement, it's important to know the program's rules regarding retirees.

The Basics According to the Office of Personnel Management, when you retire, you are eligible to continue health benefits coverage if you meet the following requirements:

  • You will retire under a qualifying retirement system for federal employees.
  • You will receive a retirement benefit that will begin within the month after you leave, or you are eligible for a reduced MRA+10 retirement under the Federal Employees Retirement System but you choose to postpone receiving the benefit to avoid some or all of the reduction. (In this case, your health insurance can be reinstated when you begin receiving this annuity.)
  • You have been continuously enrolled (or covered as a family member) in any FEHBP plan for the five years of service immediately before the date your annuity starts, or for the full period of service since your first opportunity to enroll, if less than five years.

Note that you aren't required to have been the one paying for FEHBP coverage continuously. You simply must have been covered by an FEHBP enrollment. This includes time as a family member under another person's FEHBP enrollment or time under the Uniformed Services Health Benefits Program (also known as TRICARE or CHAMPUS), as long as you were covered under an FEHBP enrollment at the time of your retirement. (You must enroll in FEHBP within 60 days after you lose coverage under the Uniformed Services Health Benefits Program for that time to be considered as part of continuous FEHBP coverage.)

Coverage under Medicare does not count in determining continuous coverage. Neither does service as a nonappropriated fund employee.

Employees who leave federal service, then return later and reinstate their FEHBP coverage, do not necessarily need to be re-employed for five years in order to carry the coverage into retirement. Coverage in their prior appointment counts toward having five years of continuous service as long as they re-enroll within 60 days of being rehired.

Questions and Answers

Here are some typical questions about FEHBP regulations that have come up in the retirement seminars I conduct: If I have self-only coverage and I want to cover my spouse later (maybe even after I retire), can I change to family coverage, or does my spouse also need to be enrolled for five years?

As long as you meet the five-year coverage test, you can change from self-only to self and family coverage during any open season period before or after you retire. You also can change to self and family enrollment if your spouse loses his or her health coverage (or cancels it) even if that takes place outside of an open season.

If I die before my spouse, can they carry FEHBP as my survivor?

In order for your nonfederal surviving spouse to continue health benefits after your death, he or she must have been covered by your self and family enrollment on the date of your death. If you are retired, you also must have chosen to provide at least a partial survivor annuity for them.

I recently switched health plans. Do I need to stay in the new one for five years before I retire?

No. You don't need to have been in the same plan for five years, just in the FEHBP as a whole. Remember, you can change plans in retirement just like you were able to do as an employee.

I had been covered under my spouse's FEHBP self and family enrollment because we had children eligible for coverage. Last year our youngest son turned 22, and we decided it would be cheaper to enroll in two self-only plans. Will I be eligible to continue my FEHBP coverage into retirement if I just enrolled last year?

Coverage under your spouse's self and family FEHBP enrollment counts towards your five years of coverage. Be sure that you tell your retirement specialist that you had prior FEHBP coverage under your spouse so that they can document this when your retirement is being processed.

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She has spent 25 years helping federal employees take charge of their retirement by understanding their benefits.

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