Micah Shilanski 00:00
We’ve heard me say it before, and I’m gonna say it again. One of the best benefits you have is your federal employee health insurances, and I look on the outside in with my green colored lenses of envy, looking at how good your health insurance is, I can definitely say that, but you gotta understand the rules to keep it into retirement, and we have a really good question that came in from Matt, which I can’t really tell based on his comment if he’s going to be able to keep that health insurance or not, so if you’re interested in the answer to this question, then stay tuned for this FERS Federal Fact Check. Hi, I’m Micah Shilanski with Plan Your Federal Retirement. We have a good question that came in from Matt today talking about his health insurance. Let’s take a peek at his question first, let’s go through a couple scenarios after that. He says, my wife is a federal employee and will retire next year. She’s gonna be 50 years old, and I’m gonna be 58 when she retires, I’m on her health insurance, so we wanna continue having that post retirement. Can I stay on her health insurance without her having to take the survivor benefit? I understand that if she dies, I am no longer covered, but if she lives, we not take any survivor coverage? Can I remain on her health insurance as long as she is alive? Mark, this is an excellent question. I’m sorry, Matt, this is an excellent question that you have, so let’s break it down a couple different ways. Number one, let’s talk about the rules for retirement. Because you say she’s going to retire, but I don’t clearly see if she’s eligible to retire under an immediate retirement because she has two requirements that she has to meet, in order to keep health insurance to retirement, you have two requirements that you have to meet. Number one, she must retire with the eligibility of an immediate pension, that’s our first rule, right? So in that case, what are the rules? The rules under a normal FERS are, you got to be your Minimum Retirement Age and have at least 30 years of federal service. Or you got to be age 60 and have at least 20 years of federal service. Or you could be age 62 and have at least five years of federal service. Now those are the rules. Now, if she has potentially a special provisions, eligible for early retirement, maybe there’s an early out, then we could talk about those rules are, you can be any age and at least 25 years of service, or you could be age 50 and at least 20 years of service, so you made the comment that she’s 50 years old and she’s going to retire, it leads me to believe that she’s under special provisions, right? Or, you know, there’s an early out that you’re able to take advantage of, but she has to go out under this set of rules in order to be under an immediate retirement, and that’s the first requirement. Now, if you have 20 years of federal service and you’re 50 years young, you’re not special provisions, there’s no early out available that’s going to happen, there’s no RIF, etc. Can you retire? Absolutely, are you going to get an immediate pension? No, because if I’m just 50 and I got 20, 30, 40, years of service, I don’t know how 40 years would work at 50, but anyways, you get the concept, it doesn’t matter how much service you have at 50 years young, unless you’re special provisions or there’s an early out opportunity, you’re not eligible for an immediate retirement, this would be a deferred retirement, and in a deferred retirement, you lose your health insurance for a life, this is not a good option, really, be careful before you go down that. So that’s the first requirement she has to retire with the eligibility of an immediate pension, so Matt, question for you, does she meet that requirement? Number two, she must be in FEHB for five years prior to retirement, so great news, she’s gonna retire this next year, rewind the clock, five years has she been an FEHB? Probably most federal employees are in it for a long time, but that’s just this thing to check. Then it gets to your questions, can you stay on her health insurance? Absolutely, if she has FEHB, as long as she selects a family plan or self plus one, then you’re eligible to maintain on that coverage, but you brought up a point, and I have a little concern, I don’t know your situation, you understand that you are not wanting to leave a survivor benefit, and you are correct in your question or your statement that says, if she passes away and she does not leave a survivor benefit, her health insurance dies when she does, right? That means you lose that FEHB for life. That’s a pretty big risk, now, maybe have is taken care of somewhere else, maybe you don’t need the insurance after that, I don’t understand, right? Because there’s a lot of things in your situation I don’t know, but it’s definitely not something that’s kind of ooh, I’d be really careful before you sign on that paperwork and give that benefit up for life, God forbid, if she passes away, that you’re going to lose out on that, so it’s definitely something to think about, but if she retires, you absolutely can stay on her insurance as long as she’s eligible to keep it, it’s a great question. If you have questions like this that you need answers to, then jump on our website planyourfederalretirement.com and you could be featured in our next FERS Federal Fact Check. Till then, Happy Planning!