“Hello , I worked for 11 years as a federal employee until age 57, now I am 62 , can I still get fehb, ie I am not enrolled in fehb since age 57 .” – Khalid.
Securing Federal Employee's Health Benefits (FEHB) in Retirement: A Comprehensive Guide
At Plan Your Federal Retirement (PYFR), we stress the importance of how incredible your health benefits are as a Federal Employee.
In fact, one piece of cautionary advice we give people we meet with in our in-person or online workshops about your benefits is that if you EVER meet with someone in the financial services industry that tells you to do ANYTHING that will compromise your ability to maintain your health insurance benefits (like not taking surivvor benefits could!) to pick your stuff up and run! Your FEHB is one of the BEST benefits that you have as a Fed.
We understand the importance of maintaining healthcare coverage during your retirement years. In this guide, we provide valuable information to help federal employees navigate the process of retaining their FEHB benefits and ensure uninterrupted access to quality healthcare.
This is why Khalid’s question is a really good one! Here you have a federal employee who has not been enrolled in FEHB and is trying to see if he can qualify to keep this benefit in retirement.
Now, we have a lot of questions about Khalid’s career and situation that we don’t have the answer to here. Therefore, we will paint with a very broad brush and talk in generality about how your health insurance benefits work.
Understanding FEHB in Retirement
The FEHB program offers comprehensive health insurance coverage to federal employees, including retirees. That’s right, not only do you have amazing health insurance coverage while you’re employed but you also get to maintain that coverage in retirement if you meet the eligibility requirements.
Specific guidelines and requirements must be followed to ensure the continuation of FEHB benefits after retirement.
Eligibility for FEHB in Retirement
To be eligible for FEHB benefits in retirement, federal employees must meet certain criteria. Here are the key factors that influence eligibility:
Length of Service
To retain FEHB benefits in retirement, individuals must have been enrolled in the FEHB program for at least five consecutive years before their retirement date. This continuous enrollment ensures eligibility for continuing coverage.
Eligible for an Immediate Retirement
Immediate retirement refers to retiring from federal service with an immediate annuity. Choosing immediate retirement allows federal employees to maintain their FEHB benefits into retirement, provided they meet the length of service requirement mentioned above.
Khalid has met this eligibility requirement, but there is more…being eligible for retirement does not guarantee that you are eligible to maintain your health insurance in retirement. You must also have been enrolled in FEHB.
You must have Continuous Coverage
Maintaining continuous enrollment in the FEHB program throughout one’s federal career is crucial to ensure uninterrupted FEHB coverage in retirement.
To be eligible for FEHB you must have been enrolled in FEHB for 5 years. Gaps in enrollment may impact eligibility for FEHB benefits after retirement.
Now, one area that most federal employees find ambiguous is what “coverage” mean. Coverage means that you were enrolled in FEHB. This does not mean you must be enrolled in your own plan. For example, if you are in a dual-fed relationship (married couple, both working as federal employees, so you enroll in a plan that covers you as a spouse or family member on your partner’s plan). This is only true of FEHB. If your spouse has insurance in the private sector and you enroll in their plan, this does NOT count as FEHB coverage and could jeopardize your ability to maintain coverage in retirement.
Should I Leave a Survivor Annuity?
Do you want your spouse to be eligible for FEHB in retirement?
If a federal employee selects a survivor annuity option for retirement benefits, the eligible survivor may also retain FEHB coverage after the employee’s passing. This provides important healthcare support for loved ones.
However, if you choose NO SURVIVOR benefits, your spouse is ineligible for FEHB if you predecease them.
Retaining FEHB Benefits in Retirement
To secure FEHB benefits in retirement, federal employees should follow these steps:
Review Retirement Options
Before retiring, familiarize yourself with available retirement options and understand the implications for FEHB coverage. Consult resources provided by the Office of Personnel Management (OPM) and seek guidance from your human resources department.
Coordinate with Human Resource Department
Work closely with your human resources department before you retire from federal service to make suer that your OPF is in good order.
We often joke with our pre-retirees and say that when you are in you are a guest, when you are out you are a pest!
Notify them of your retirement plans and seek their assistance in understanding the requirements for maintaining FEHB benefits. As with all things with the government, document, document, document.
We will have our federal employee clients request a copy of all of their Standard Form 50’s the year before they retire.
Complete Retirement Documentation
Accurately and thoroughly fill out all necessary Application for Immediate Retirement SF-3107. Be cognizant of the choices you make when you fill out this retirement application. There are no “do-overs” after you have retired.
Provide any requested information regarding FEHB enrollment, including details of your chosen health plan.
Medicare Coverage at age 65
As you approach retirement age, it’s important to consider how Medicare will work with your FEHB benefits. Medicare can work with FEHB benefits, providing additional coverage and reducing potential out-of-pocket expenses. Evaluate your options and consult Medicare resources for further guidance. If you’are interested in learning more about FEHB and Medicare benefits, keep reading and we will include some information below.
Understand Premium Payments
During retirement, federal employees are responsible for paying their FEHB premiums.
Familiarize yourself with the payment process and deadlines to avoid any interruptions in coverage. Keep track of any changes in premiums and update your payment method accordingly.
When you were working for the federal govenrment, your premium payments were made on a pre-tax basis.
When you retire from federal service, your FEHB payments will be made on a post-tax basis.
Continue to stay informed about any updates or changes to the FEHB program. Regularly review communications from your health plan and OPM to ensure you know any adjustments that may impact your coverage.
If you have questions about your coverage, make sure that you have requested a complete copy of your Official Personnel File. Your file will confirm with OPM if you are enrolled in FEHB and for how long.
Benefits of Retaining FEHB in Retirement
Securing FEHB benefits in retirement offers significant advantages for FERS retirees. Let’s explore the key benefits:
Continuity of Coverage: maintaining FEHB and Medicare in Retirement
Retaining FEHB benefits ensures continuity of healthcare coverage, allowing federal employees to maintain access to the same health plan and providers they are familiar with. This provides stability and peace of mind during retirement. The cost of rusing healthcare concerns is often the number one concern of the federal employees that we visit with one on one.
Comprehensive Healthcare Services
FEHB benefits provide comprehensive coverage for various medical services, including doctor visits, hospital care, preventive screenings, laboratory tests, mental health services, and more. Seriously, we are jealous. Since we do not have FEHB we can only look from the outside in and are green with envy and the benefits of FEHB.
FEHB and Medicare : Understanding Medicare Enrollment and how Medicare works with FEHB
Medicare is a health insurance program for people who are 65 years old or older; you must enroll in Medicare at age 65 even if you have FEHB.
Medicare will move to your primary insurer and FEHB will be your secondary.
Medicare has several “Parts” and you can elect which to enroll in based on your personal situation. Here are the main parts of Medicare:
Part A: Hospital Insurance (MANDATORY TO ENROLL IN)
Medicare Part A covers hospital stays, skilled nursing facility care, hospice care, and some home health services. Most people are automatically enrolled in Part A without having to pay a premium.
Part B: Medical Insurance (“OPTIONAL” to ENROLL, ENROLL!)
Medicare Part B covers services like doctor visits, outpatient care, preventive care, and medical equipment. Part B is optional, but it requires a monthly payment. There is a SIGNIFICANT lifetime penalty if you do not enroll in Medicare Part B when you are eligible.
Penalty for Late Enrollment
If you do not enroll in Medicare Part B during your Initial Enrollment Period and do not have other creditable health coverage, you may face a late enrollment penalty. This penalty is added to your monthly Part B premium and remains in effect for as long as you have Medicare.
The penalty is calculated based on how long you went without Part B coverage. For each 12-month period that you were eligible for Part B but did not enroll, the penalty is calculated as 10% of the current standard Part B premium. The penalty accumulates over time and can significantly increase your monthly premium.
Exception: Employer-Sponsored Coverage
If you have employer-sponsored health coverage based on your current employment or your spouse’s employment, you may be able to delay enrolling in Medicare Part B without incurring a penalty. However, certain conditions must be met:
The employer must have 20 or more employees.
The employer-sponsored coverage must be deemed creditable, meaning it is expected to provide coverage that is at least as good as Medicare’s.
When you or your spouse’s employment ends or the employer-sponsored coverage is no longer considered creditable, you will have a Special Enrollment Period (SEP) of eight months to enroll in Medicare Part B without penalty.
While Medicare calls their “Medicare Part B” optional insurance coverage we call it the “optional but not really optional” coverage. You will need to decide whether you want to enroll or not.
Part C: Medicare Advantage
Medicare Part C, or Medicare Advantage, is an alternative to Original Medicare provided by private insurance companies. These plans often include extra benefits like prescription drug coverage. To enroll in Part C, you need to be enrolled in Parts A and B.
Part D: Prescription Drug Coverage
Medicare Part D helps pay for prescription medications. You can get Part D through a standalone Prescription Drug Plan (PDP) or as part of a Medicare Advantage plan.
Questions like this?
We meet with a lot of Federal Employees, just like you, who are trying to figure out the coordination of their benefits. If you are ready to meet with a Federal Employee Benefit Specialist, schedule your one hour call today.