The Federal Employees Health Benefits (FEHB) program is one of the most valuable benefits available to federal employees — and one of the most important to understand as you approach retirement. Unlike most private-sector retirees who lose employer-sponsored health coverage at retirement, federal retirees who meet certain requirements can continue their FEHB coverage for life. This guide explains the key rules and decisions.
The 5-Year Rule
To carry FEHB coverage into retirement, you must meet the following requirement:
Continuous Enrollment for 5 Years
You must have been continuously enrolled in FEHB (or covered as a family member under another federal employee's FEHB enrollment) for the 5 years immediately before your retirement date.
Since First Opportunity
If you have not been enrolled for 5 years, you may still qualify if you have been enrolled since your first opportunity to enroll — typically when you first became eligible as a federal employee.
No Gaps Allowed
Gaps in FEHB coverage can disqualify you from carrying coverage into retirement. If you have had periods without FEHB enrollment, review your coverage history carefully.
Premium Costs in Retirement
In retirement, you continue to pay the same share of FEHB premiums as active employees — the government continues to pay its share. This is a significant benefit compared to private-sector retirees who typically pay the full premium.
Government Contribution Continues
The government pays approximately 72% of the average premium across all FEHB plans. This contribution continues in retirement, making FEHB significantly more affordable than individual market coverage.
Premiums Deducted from Annuity
In retirement, your FEHB premiums are deducted directly from your monthly annuity payment, simplifying administration.
Plan Changes at Open Season
You can change your FEHB plan during the annual Open Season (typically November–December), just as you could as an active employee.
FEHB and Medicare Coordination
When you become eligible for Medicare at age 65, you have important decisions to make about how FEHB and Medicare work together.
Medicare Part A
Most federal retirees are entitled to Medicare Part A (hospital insurance) at no premium cost, based on their federal service. Enrolling in Part A is generally recommended.
Medicare Part B
Medicare Part B (medical insurance) has a monthly premium. When combined with FEHB, Part B can significantly reduce out-of-pocket costs — but the decision depends on your specific FEHB plan and health needs.
Coordination of Benefits
When you have both FEHB and Medicare, Medicare typically pays first (as primary), and FEHB pays second (as secondary). This coordination can reduce or eliminate out-of-pocket costs for covered services.
Key Takeaways
- You must be enrolled in FEHB for 5 years before retirement (or since first opportunity) to carry coverage into retirement
- The government continues to pay its share of FEHB premiums in retirement
- Premiums are deducted directly from your monthly annuity
- You can change FEHB plans during annual Open Season in retirement
- Medicare Part A is generally free for federal retirees based on their service
- The FEHB-Medicare coordination decision is one of the most impactful healthcare choices in retirement
Important Federal Rules to Know
- FEHB coverage cannot be reinstated once cancelled in retirement — the decision is permanent
- Temporary continuation of coverage (TCC) is available for up to 18 months if you lose FEHB eligibility
- Survivor annuitants can continue FEHB coverage if the deceased retiree was enrolled at death
- Some FEHB plans offer Medicare Advantage options that may provide additional benefits
- FEHB premiums are not tax-deductible for retirees (unlike some other health insurance premiums)
Questions to Consider
- Have I been continuously enrolled in FEHB for the 5 years before my planned retirement date?
- Which FEHB plan best meets my healthcare needs and budget in retirement?
- Should I enroll in Medicare Part B at age 65, and how does it interact with my FEHB plan?
- What are the out-of-pocket cost implications of different FEHB-Medicare combinations?
- Does my spouse's coverage situation affect my FEHB decisions?
Educational Disclaimer: This guide is provided for general educational purposes only and does not constitute personalized financial, legal, or healthcare advice. Federal Retirement Pros is not affiliated with, endorsed by, or a representative of the U.S. Office of Personnel Management (OPM), the Centers for Medicare & Medicaid Services (CMS), or any government agency. FEHB plan options and premiums change annually.
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Have Questions About Your Situation?
Federal retirement decisions are personal. If you'd like to discuss how these rules may apply to your individual situation, schedule a Federal Retirement Review.
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