Can I suspend FEHB in retirement then start it again later if my new (private sector) employer offers health coverage benefits that I’d like to take advantage of? – Michael
Federal retirees have access to the Federal Employees Health Benefits (FEHB) Program, which is considered one of the top health insurance programs in the United States. However, many retirees wonder if they can pause their FEHB coverage and return later, especially if they have other health insurance options, such as coverage from a new job or through a spouse.
What Is FEHB?
The Federal Employees Health Benefits (FEHB) Program provides health insurance to federal employees, retirees, and their families. It offers a variety of plans, including Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs)
Can You “Pause” FEHB Coverage?
Generally, you cannot pause your FEHB coverage just because you have other health insurance. If you retire and have FEHB, you cannot suspend it to take another plan, such as one from a private employer or your spouse, and expect to return later. FEHB does not work like a subscription that you can pause and restart at any time.
You are only allowed to suspend FEHB in retirement if you enroll in TRICARE, CHAMPVA, Medicaid, or Medicare Advantage. In these cases, you must fill out Form RI 79-9 to suspend your FEHB. If you later lose that other coverage, you can re-enroll in FEHB.
What If You Want to Leave FEHB for Another Job’s Plan?
If you retire and take a job in the private sector that offers health insurance, you might think you can drop FEHB and return later. However, this is not allowed. If you cancel your FEHB in retirement, you cannot rejoin unless you qualify for the special programs mentioned above.
Why Canceling FEHB Is Risky
Canceling FEHB may save money in the short term, but it could cost more in the future. FEHB is a lifelong benefit if you keep it, and the government continues to pay a large part of the premium after you retire. If you cancel FEHB and lose your private coverage later, you cannot get FEHB back unless you meet the exceptions. Financial advisors often recommend keeping FEHB, even if you want to reduce costs.
A Better Option: Choose a Cheaper FEHB Plan
If you want to save money but keep your FEHB, consider switching to a lower-cost plan during Open Season, which usually runs from mid-November to mid-December each year. You can select a high-deductible or lower-premium plan and still stay in the FEHB program. This allows you to change plans later if your situation changes.
Conclusion
You cannot suspend FEHB coverage just because you have other health insurance, like from a new job or your spouse.
If you cancel your FEHB in retirement, you usually cannot get it back.
The only way to suspend FEHB and return later is by enrolling in certain other programs, such as TRICARE, CHAMPVA, Medicaid, or Medicare Advantage.
If you want to pay less for FEHB but keep your coverage, you can switch to a lower-cost plan during the Open Season.
ABOUT THE AUTHOR
Micah Shilanski, CFP®, is a distinguished financial planner known for his deep commitment to providing exceptional advisory services to his clients. As the founder of Plan Your Federal Retirement, Micah has dedicated his career to helping federal employees understand and optimize their benefits to ensure a secure and prosperous retirement. His expertise is widely recognized in the industry, making him a sought-after speaker and educator on financial planning and retirement strategies.
Micah’s approach is client-centered, focusing on creating personalized strategies that address each individual’s unique needs. His work emphasizes the importance of comprehensive planning, incorporating aspects of tax strategy, investment management, and risk assessment to guide clients toward achieving their financial goals.Micah Shilanski 00:00
While you have some amazing benefits, sometimes you’re paying for things you don’t need. Let’s say that you have your FEHB, which is one of your best benefits, you have Federal Employee Health Benefits, but you’re double covered somewhere else, either through your own employment somewhere else, or your spouse’s employment, do you really have to keep at paying FEHB if you don’t need it? Is there a way to hit the pause button, stick that on the shelf and be able to come back to your FEHB later. If you’ve ever wondered the answer to this question, then stay tuned for this FERS Federal Fact Check. Hi, I’m Micah Shilanski with Plan Your Federal Retirement. I’m really excited to get into Michael’s question today, and he says: Can I suspend my FEHB in retirement, then start it again later, if my new private sector employer offers health coverage benefits that I’d like to take advantage of. Michael, such a great question. Now, I love what you’re already thinking right here, saying, hey, my FEHB is really beneficial. I want to make sure I have this for retirement, I want to make sure I have this for the rest of my life, but I also don’t want to pay for things I don’t need, right? If my current employer or new employer has cheaper insurance coverage, right then, why am I being double covered? Because it’s not like your new employer can say, hey, you don’t have health insurance, they pay more unfortunately, that’s illegal, so you have to be ineligible for those benefits, so how do you make the most out of them? Unfortunately, the bearer of the bad news right now, the short answer is no, very, very rare occasions, maybe with TRICARE, we could have a conversation about postponing benefits, but the short answer is, no, you cannot postpone your FEHB insurance just to move into a private sector, then later go and pull it back. The only thing you could do is cancel your insurance, which I am not recommending, right? Big, stop, big no, that FEHB in retirement is a beautiful thing, so I would not want to cancel that insurance. So I would definitely say to really look at the details of coverage in FEHB. What I’ve done with a lot of clients is because they want to keep their foot in their door with FEHB, but they don’t want to, but they already have this other coverage at the employer. We start moving to a higher deductible plan, start scaling down the benefits, if you will, on your FEHB plan, and that just makes the premium a little bit cheaper. So there are things you can do in Open Season to kind of lower the benefits, you can change the plan in FEHB, and it still keeps your foot in the door, but I would not cancel that coverage, because it is still great coverage throughout retirement. If you have questions about your benefits and how they work in retirement, then make sure you submit them to us and you could be featured to the next FERS Federal Fact Check. Till then, Happy Planning!