“Hi! I LOVE your podcasts!
I am a Federal employee, have met my MRA and will meet my 30-years of service on Nov 2, 2021. I’d like to retire as soon as I can, but want to make sure my husband and dependent daughter can be covered under my FEHB into my retirement, and beyond.
I am currently enrolled in FEHB and have received confirmation that I may continue my FEHB into retirement (I have met the 5-year rule).
My husband and daughter are currently NOT covered under my FEHB plan, but are covered under his private employer’s insurance.
I understand that I may only make changes to my FEHB (add husband and daughter to my FEHB) during Open Season or because of a QLE.
I also understand that if I die in retirement, prior to adding my husband & child to my FEHB, they are not eligible to FEHB ever.
The question: Is my retirement a QLE, allowing me to add husband and daughter to my FEHB at my retirement, or must I wait for Open Season (mid-November) to add husband/daughter, and delay the retirement date until that is completed? Thanks!
” – Mary.
Mary’s question about how to maintain Federal Employee Health Benefits (FEHB) for her spouse, who is not a Federal Employee, once she retires is one that is often overlooked by Federal employees.
As a Federal Employee, your greatest benefit is your health benefits while you are working and once you retire are enviable!
As a Federal Employee, you want to ensure that when you are planning for your retirement it is important to ask questions like Mary’s so that you do not lose this coverage for you or your spouse.
In order to maintain FEHB in retirement, the Federal Employee has to meet eligibility requirements AND their spouse must meet eligibility requirements too.
Failure to meet eligibility requirements may result in forfeiture of your FEHB benefits in retirement.
Eligibility for Federal Employee to Maintain Health Insurance in Retirement
In order to maintain eligibility for FEHB in retirement you as a Federal Employee must meet two conditions:
- (1) Have retired with the eligibility of an immediate annuity (which we call a pension).
- (2) Have been continuously enrolled (or covered as a family member) in any FEHB Program plan (not the same plan) for the five years of service immediately preceding retirement, or if less than five years, for all service since your first opportunity to enroll.” (www.opm.gov).
Condition #1 to Maintain Health Insurance in Retirement as a Federal Employee
The second requirement in order to keep FEHB into retirement is that you must have been enrolled in FEHB for at least 5 consecutive years prior to separation from service with the Federal Government.
This would also mean that if you were covered under your spouse, who is also a federal employee, FEHB plan, this satisfies that requirement.
You do not have to be in the same FEHB plan during those 5 years. If you have not been eligible for FEHB for at least 5 years but enrolled at your soonest opportunity, you are allowed to keep FEHB into retirement.
Condition #2 to Maintain Health Insurance in Retirement as a Federal Employee
Both of these are based on your age and years of creditable service. An Immediate and Unreduced Retirement would mean that you have met one of the following 3 criteria (not including Special Provisions such as law enforcement, firefighters, or air traffic controllers):
- Retire at your Minimum
- Retirement Age (MRA) or older with at least 30 years of service; or,
- Retire at age 60 or older with at least 20 years of service; or,
- Retire at age 62 or older with at least 5 years of service.
In order to qualify for a Postponed Retirement, you need to retire at your MRA or older with at least 10 years of service. MRA with 10 years of service also qualifies you for a Deferred Retirement, but a Deferred Retirement would mean you CAN NOT keep FEHB into retirement.
Under a Postponed Retirement, if you retire after having reached your MRA but before age 62, you would have to postpone receiving your pension until age 62. If you have 20 years of service or more, you can postpone your pension until age 60. During the time when you stopped working and postponed receiving your pension, you would not be eligible for FEHB.
Now, let’s dive into what it takes for your spouse to maintain a health insurance once you, as the Federal Employee, retire.
Eligibility for YOUR SPOUSE to Maintain Health Insurance in Retirement
For your spouse to continue to have coverage under FEHB in retirement, they have two conditions. It is really important to keep these two conditions in mind because many Federal Employees are unaware of them.
Here are the two conditions for your spouse to keep FEHB in your retirement:
- Your spouse must be eligible to receive Survivor Benefits.
- Your spouse has to be enrolled in FEHB before your death. Enrollment cannot occur post-mortem.
Let’s discuss some critical planning points on these two conditions so that as a Federal Employee you can hopefully navigate your complex benefits system a little better and make informed planning decisions.
You must make your spouse eligible for survival benefits in order for them to receive FEHB into retirement. This is so critical to understand. When you go to retire from the Federal Government you are going to have to make selections in regards to your benefits. Some of those selections will pertain to those you leave behind.
Health insurance is one of them. You have to elect that your spouse receives a survival benefit in order for them to receive FEHB into your retirement. There are several options to choose from in regards to what and how much benefits you want them to receive if they were to survive you but if you elect for them not to receive anything, you will compromise their ability to maintain their FEHB in retirement.
If you predecease your spouse, you must have selected for them to receive a survivor benefit.
This is why it is so important to complete all of your beneficiary designations. Click here to learn more about your beneficiary designations!
Enrolled in FEHB Prior to Your Death
Unlike the Federal Employee, who is required to be registered for five years before retirement, spouses do not have this time obligation. However, they do have to be enrolled before you die.
These conditions become particularly crucial if the Federal Employee predeceases the non-Federal Employee spouse.
As the Federal Employee, not having your beneficiary designations in order could be hazardous to your spouse’s health or, at least their health insurance coverage. By not having your spouse enrolled if you predecease them, then the FEHB benefit dies with you.
This particular point is so critical to understand because too often we have sat down with a widow or widower and discussed what benefits they are eligible for after their Federal Employee spouse has passed away. Amongst those topics is always FEHB. Too often we have seen, prior to working with our firm, a Federal Employee enrolls in a Single coverage plan (just for themselves) because their non-federal employee spouse had coverage with their employer. When the Federal Employee passes, life changes for the survivor. In dramatic ways oftentimes.
Most of the time we see widows and widowers reconsider their careers and stay with their current employers. Health care coverage becomes a big part of that decision and it is always a travesty when we work with such individuals and explain that they are not covered under FEHB so now, they have to make other arrangements for health insurance. It’s a travesty because health insurance is expensive and oftentimes, private plans just are not as nice as FEHB is.
Qualifying Life Events for Changing Federal Employee Health Benefits
In order to make changes to your Health Insurance coverage outside of an open season, you must be experiencing a qualifying life event.
The most common types of qualifying life events for Federal Employees include:
- Loss of health coverage
- Losing existing health coverage,
- Losing eligibility for Medicare,
- Turning 26 and losing coverage through a parent’s plan.
- Changes in household
- Getting married
- Getting divorced
- Having a baby or adopting a child
- Death in the family
Does Retirement Count as a Qualifying Life Event for Federal Employees to Make Changes to their Health Insurance?
No, retirement does not count as a qualifying life event for federal employees to make changes to their health insurance.
The Office of Personnel Management (OPM) has defined a change in employment status as the following conditions:
- you are reemployed after a break in service of more than 3 days
- you return to pay status after your coverage terminated during leave without pay status or because you were on leave without pay status for more than 365 days
- your pay increases enough for premiums to be withheld
- you are restored to a civilian position after serving in the uniformed services
- you change from a temporary appointment to an appointment that entitles you to a Government contribution
- you change to or from part-time career employment” (opm.gov)
Retirement from the Federal Government is an elective change of employment status and therefore does not qualify as a life event for Federal Employees.
In Mary’s case, her husband is employed in the private sector. If he retires from his private-sector employment and loses HIS health insurance coverage then that would qualify as a life event for him to join your health insurance as a Fed.