Key Takeaways
- Your FEHB coverage can often continue into retirement if you meet key eligibility rules such as the five-year participation requirement.
- After retirement, you have ongoing options to adjust coverage during open seasons or qualifying life events, with important rules around Medicare and relocation.
Understanding how the Federal Employees Health Benefits (FEHB) Program changes after retirement can help you prepare for a smooth transition and maintain high-quality health coverage. This guide explains the rules, options, and considerations that apply when you retire from federal service.
What Is FEHB for Retirees?
Overview of FEHB Program
The FEHB Program is the primary group health insurance plan for federal employees, retirees, and their eligible family members. It offers a choice of nationwide and local plans, designed to continue providing comprehensive health coverage after your federal service ends.
Eligibility Through Federal Retirement
Eligibility for FEHB in retirement depends on meeting both employment and participation criteria. Most importantly, you must retire with an immediate federal annuity (such as from FERS or CSRS). This typically means you separate from service and collect your pension without delay.
Differences From Employee Coverage
When you retire, many features of your FEHB plan remain the same, including your ability to select from several plan types and levels. However, some processes—such as premium payment and rules for changing plans—differ from those for active federal employees. The Office of Personnel Management (OPM) administers FEHB for retirees instead of your employing agency.
How Does Eligibility Change After Retirement?
Five-Year Rule Explained
To keep FEHB into retirement, you must have been enrolled (or covered as a family member) in FEHB for the five years immediately before you retire, or for your entire federal career if less than five years. This is commonly called the “five-year rule.” Breaks in coverage may affect your eligibility.
Qualifying Retirement Types
Only certain types of retirement allow you to keep FEHB coverage. Both regular and disability retirements that include an immediate annuity generally qualify. Deferred retirements, where annuity payments are delayed, do not confer FEHB eligibility during the delay.
When Coverage Can Continue
If you meet the five-year rule and retire with an immediate annuity, your FEHB coverage continues seamlessly. You and your eligible dependents stay on the same plan unless you choose to make changes during open season or after qualifying events.
What Coverage Rules Apply to Retirees?
Self Only, Self Plus One, Family Options
Retirees are allowed to select from “Self Only,” “Self Plus One,” and “Self and Family” enrollment types—the same as active employees. This flexibility helps you align your coverage with your family’s needs.
How Premiums Are Paid After Retirement
As a retiree, your FEHB premiums are deducted from your federal annuity each month, rather than from your paycheck. If your annuity is too small to cover the entire premium, OPM will arrange for direct payment alternatives. Notably, you pay premiums on a post-tax basis as a retiree.
Open Season Rules for Retirees
You remain eligible to participate in FEHB open seasons every fall. During open season, you can change plans, adjust enrollment types, or add eligible family members. Retiree choices are subject to the same open season timeframe as those of active employees.
When Do FEHB Changes Take Effect?
Timing of Enrollment Changes
Enrollment changes made during the annual open season take effect the first day of the following benefit year, which typically begins in January. Changes due to life events often have different timelines.
Effective Dates for Coverage
FEHB coverage for new retirees typically carries over with no break, provided you meet eligibility rules at retirement. For enrollment changes, consult OPM’s calendar or official materials to confirm exact effective dates, as processing may vary.
Losing or Regaining Eligibility
Loss of eligibility is rare after retirement unless you cancel your coverage, fail to pay premiums, or (in limited cases) lose your annuity. If you regain eligibility (such as by returning to qualifying federal service), you may be able to reenroll, subject to specific rules.
Can You Change Your FEHB Plan After Retirement?
Open Season Opportunities
You may switch between FEHB plans or enrollment types during open season every year. Open season is your primary opportunity to evaluate your coverage and make adjustments based on changing needs or plan offerings.
Qualifying Life Events
Certain life events—such as marriage, divorce, birth/adoption, or loss of other coverage—permit changes to your FEHB enrollment outside of open season. You must notify OPM within 60 days of the event for the change to take effect.
Limitations to Plan Changes
Outside open season and qualifying life events, you cannot change your FEHB plan or increase your level of coverage. If you cancel FEHB coverage in retirement, reinstatement is rarely permitted except in cases where you return to a federal position eligible for re-enrollment.
How Does Medicare Affect FEHB for Retirees?
Medicare and FEHB Coordination
Once you turn 65, you become eligible for Medicare. Most federal retirees keep their FEHB coverage and add Medicare Part A (hospital insurance), since it is premium-free for most. FEHB generally pays second after Medicare when you are enrolled in both.
Enrolling in Medicare Parts A and B
You may also consider enrolling in Medicare Part B (medical insurance), which requires a premium. Whether to enroll depends on your health, costs, and coverage coordination priorities. FEHB does not require you to enroll in Medicare to continue coverage.
What Happens If You Decline Medicare?
If you do not enroll in Medicare, your FEHB plan remains your primary provider once you retire and reach age 65. However, you could be responsible for costs that Medicare Part B would have paid if you were enrolled. FEHB coverage does not end because you decline Medicare.
What Happens If You Move or Relocate?
Impact on Plan Availability
Moving may affect the availability of certain FEHB plans, especially regional or HMO options with geographic restrictions. National plans, however, are often available anywhere in the U.S. and some overseas locations.
Changing Coverage Due to Address
If you relocate, you may change your FEHB plan outside of open season if your plan is no longer offered at your new address. This is considered a qualifying life event, allowing for a timely change to ensure continued coverage.
Using FEHB While Living Abroad
FEHB coverage can continue even if you move outside the United States, but your choice of available plans and provider networks may be limited. Some plans offer specific benefits for enrollees living or traveling overseas; review plan brochures or OPM guidance for details.
