FEHB in Retirement: Keeping Federal Health Insurance
Can you keep your Federal Employees Health Benefits in retirement? Complete guide to FEHB eligibility and costs for retirees.
Key Takeaways
- 1You can keep FEHB in retirement if enrolled 5 continuous years before retirement
- 2Government continues paying its share of premiums (about 72%)
- 3FEHB coordinates with Medicare at 65
- 4Most retirees should enroll in Medicare Part B
- 5Can use FEHB as supplement to Medicare
- 6Some FEHB plans waive or reduce premiums if enrolled in Medicare
- 7Coverage continues for life with no re-enrollment periods
FEHB Eligibility in Retirement
To continue FEHB in retirement, you must meet the "5-year rule."
- **5-Year Rule**: Enrolled in FEHB for 5 continuous years before retirement
- Service doesn't have to be consecutive, but FEHB enrollment must be
- Breaks in FEHB coverage can disqualify you
- Applies to immediate, early, and disability retirement
- Family members covered if they were covered before retirement
Don't Let Coverage Lapse
If you drop FEHB even briefly in your last 5 years, you may lose the right to keep it in retirement. Be very careful about coverage gaps.
FEHB Costs in Retirement
Retirees pay the same share of premiums as employees - about 28% of the total.
- Government pays about 72% of weighted average premium
- Your share is the remaining premium (about 28%)
- Premiums deducted from annuity (pre-tax under FEHB)
- Same plan options as employees
- Can change plans during Open Season (November-December)
| FEHB Plan Type | Typical Retiree Cost/Month |
|---|---|
| Self Only | $200-400 |
| Self Plus One | $400-700 |
| Self and Family | $500-900 |
Costs vary by plan and location. Check fehb.opm.gov for specific premiums.
FEHB and Medicare Coordination
At 65, you're eligible for Medicare. How does it work with FEHB?
- **Medicare Part A**: Free if you have 40 SS credits. Enroll - no downside.
- **Medicare Part B**: Costs ~$175/month (2024). Most retirees should enroll.
- **Coordination**: When you have both, Medicare pays first, FEHB second
- **Premium reductions**: Some FEHB plans reduce premiums if you have Medicare
- **Part D**: Usually not needed - FEHB drug coverage is typically better
Enroll in Part B at 65
Most federal retirees should enroll in Medicare Part B at 65. Many FEHB plans reduce your premium or copays when you have Medicare.
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Key FEHB Retirement Decisions
Important choices for federal retirees regarding health coverage.
- 1Ensure 5 continuous years of FEHB enrollment before retiring
- 2Enroll in Medicare Part A at 65 (it's free)
- 3Decide on Medicare Part B (usually yes)
- 4Review FEHB plans - some offer Medicare incentives
- 5Consider lower-premium FEHB plan if Medicare is primary
- 6Skip Medicare Part D - FEHB drug coverage is usually better
- 7Review coverage annually during Open Season
Health Care and Retirement Planning
FEHB is a valuable benefit, but healthcare costs still impact your retirement budget. Strong financial planning helps cover these costs.
- FEHB premiums continue for life - budget accordingly
- Healthcare costs typically rise faster than general inflation
- TSP/IRA funds can help cover health costs
- Gold IRA provides inflation protection for long-term costs
- Consider supplemental savings beyond FERS and TSP
- Augusta Precious Metals helps with TSP rollovers
Frequently Asked Questions
1Can I drop FEHB and re-enroll later?
Generally no. Once you drop FEHB in retirement, you cannot re-enroll. The exception is if you acquire other coverage (like through a spouse) and later lose it.
2Does FEHB cover long-term care?
No, FEHB does not cover long-term care. You need separate LTC insurance or plan to self-fund nursing home or assisted living costs.
3What if I retire before 65?
FEHB provides coverage until Medicare eligibility at 65. You pay the same premium as if you were working. FEHB is primary until you enroll in Medicare.
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