For federal employees, maintaining FEHB (Federal Employees Health Benefits) coverage in retirement is one of the most valuable benefits of federal service. Unlike many private-sector workers, federal retirees can continue their FEHB coverage into retirement, ensuring they have access to comprehensive health insurance as they age. With the option to keep FEHB alongside Medicare, retirees have multiple pathways to secure their healthcare needs without worrying about significant out-of-pocket expenses.

This guide covers the essentials of FEHB in retirement, including eligibility requirements, premium costs, and how FEHB and Medicare work together for federal retirees.

How FEHB Works in Retirement

One of the most significant benefits of the FEHB Program is that eligible federal employees can carry their FEHB coverage into retirement, providing lifelong access to health insurance. Retirees retain the same level of coverage they had while working, including access to doctors, hospitals, and prescription drug coverage.

Key Points About FEHB in Retirement:

• Same Benefits, Different Status: When you retire, your FEHB benefits remain largely the same as when you were employed. You can choose from the same plans and enjoy the same healthcare network options.
• Premium Payments: Retirees continue to pay FEHB premiums, but unlike active employees, the government continues to pay about 70% of the premium, making it affordable.
• Medicare Integration: Once you become eligible for Medicare at age 65, you can coordinate your FEHB coverage with Medicare, reducing out-of-pocket costs even further.

Understanding how FEHB works in retirement can help you plan your healthcare strategy for your golden years.

FEHB Eligibility After Retirement

Not all federal employees are automatically eligible to keep their FEHB coverage in retirement. You must meet specific criteria to continue your health benefits after retiring.

Eligibility Requirements for Retiree FEHB Coverage:

• Five-Year Rule: You must have been enrolled in the FEHB program for at least five consecutive years immediately before retiring, or for the full period of service since your first opportunity to enroll.
• Immediate Annuity: You must be entitled to receive an immediate annuity from your federal retirement system (FERS or CSRS). Delayed annuities may result in the loss of FEHB coverage.
• Enrollment Continuity: You must be continuously enrolled in the FEHB program without any break in coverage leading up to retirement.

Meeting these FEHB retirement eligibility requirements is crucial for maintaining health benefits as a federal retiree.

Keeping FEHB in Retirement: Benefits and Considerations

For many federal employees, keeping FEHB coverage in retirement is a straightforward choice due to its comprehensive nature and affordability. By keeping FEHB, retirees can continue to benefit from the wide provider networks and prescription drug coverage they enjoyed while employed.

Benefits of Keeping FEHB in Retirement:

• Comprehensive Coverage: FEHB provides extensive coverage, including doctor visits, hospital care, and prescription drugs, ensuring retirees have access to high-quality healthcare.
• Affordability: The federal government continues to cover about 70% of the premiums, making it an affordable option even after retirement.
• Coordination with Medicare: Once you’re eligible for Medicare, keeping your FEHB plan means you’ll have both Medicare and FEHB working together, further reducing out-of-pocket costs.

However, retirees should also consider their healthcare needs and whether to enroll in Medicare Part B to complement their FEHB coverage. Understanding the benefits of keeping FEHB in retirement can help you make an informed decision.

FEHB Premiums in Retirement

Federal retirees must continue paying FEHB premiums after they retire, but the cost remains manageable due to the government’s contribution toward the premium.

How FEHB Premiums Work for Retirees:

• Government Contribution: The federal government continues to pay 70% of the premium, the same as when you were working. You are responsible for the remaining 30%.
• Premium Stability: FEHB premiums for retirees are the same as they are for active employees. However, during the FEHB open season, retirees can compare different plan options to adjust their premiums and coverage if needed.

Understanding FEHB premiums for retirees ensures that you are financially prepared to maintain your health coverage after leaving federal service.

FEHB and Medicare in Retirement: Coordination for Federal Retirees

Once federal retirees become eligible for Medicare at age 65, they can coordinate FEHB and Medicare to enhance their coverage. Medicare becomes the primary payer, and FEHB acts as secondary coverage, reducing out-of-pocket costs for hospital stays, doctor visits, and other medical services.

Key Points About FEHB and Medicare Coordination:

• Medicare as Primary: For most retirees, Medicare Part A (hospital insurance) and Part B (medical insurance) become the primary payers, and FEHB covers costs not paid by Medicare, such as copayments and deductibles.
• Prescription Drug Coverage: FEHB plans typically offer more comprehensive prescription drug coverage than Medicare Part D, so most retirees do not need to enroll in Part D.
• Medicare Part B Decision: Enrolling in Medicare Part B comes with a premium, but it can reduce overall out-of-pocket healthcare expenses when paired with FEHB. Retirees must evaluate whether the added premium cost is worth the savings on medical care.

By coordinating FEHB and Medicare in retirement, federal retirees can enjoy nearly full coverage with minimal out-of-pocket expenses.

FEHB Retirement Plan Options: Choosing the Right Coverage

During the FEHB open season, retirees have the opportunity to review and adjust their health coverage based on their current healthcare needs and financial situation. Whether you want to stick with your current plan or explore new options, open season allows you to make changes.

Factors to Consider When Choosing an FEHB Plan in Retirement:

• Current Healthcare Needs: Evaluate whether your current healthcare usage has changed since you retired. If you’re seeing specialists or taking new medications, you may want to switch to a plan with broader coverage or better prescription benefits.
• Costs: Compare FEHB plan premiums to ensure you’re paying a reasonable amount for your coverage. Some plans may have lower premiums but higher out-of-pocket costs, while others may offer more comprehensive coverage for a higher monthly premium.
• Provider Networks: If you’ve moved or changed doctors since retiring, make sure your preferred providers are covered under your chosen FEHB plan.

Understanding your FEHB retirement plan options allows you to adjust your coverage based on your evolving healthcare needs.

Federal Retiree Healthcare Options: FEHB vs. Medicare

For federal retirees, the decision of whether to rely solely on FEHB or to integrate Medicare into their healthcare strategy is a crucial one. Each program has its strengths, and combining them may offer the best overall coverage.

Comparing FEHB and Medicare:

• FEHB: Provides comprehensive coverage, including doctor visits, hospital care, and prescription drugs. FEHB remains a robust option for retirees who prefer not to enroll in Medicare Part B or want to keep their healthcare straightforward.
• Medicare: Medicare Part A is free for most people and covers hospital stays, while Medicare Part B covers outpatient care but requires a premium. Combining Medicare with FEHB can significantly reduce out-of-pocket costs, but retirees must weigh the extra premium costs.

The decision between FEHB vs. Medicare in retirement depends on your healthcare needs, budget, and preference for managing your healthcare coverage.

Continuing FEHB into Retirement: Eligibility and Process

To continue your FEHB coverage after retirement, you must meet the eligibility requirements and ensure that you maintain continuous enrollment without any lapses. It’s important to plan for your retirement healthcare early to avoid any disruptions in coverage.

How to Maintain FEHB in Retirement:

• Meet Eligibility Requirements: Ensure that you meet the five-year rule and are eligible for an immediate annuity.
• Enroll in Medicare: Once you turn 65, decide whether to enroll in Medicare Part B and how it will coordinate with your FEHB coverage.
• Review Your Plan Annually: During the FEHB open season, review your coverage options to ensure you’re still enrolled in the best plan for your healthcare needs.

By understanding how to continue FEHB into retirement, federal employees can secure lifelong access to quality healthcare.

Maximizing Your FEHB Coverage in Retirement

For federal retirees, continuing FEHB coverage into retirement provides essential healthcare benefits and financial peace of mind. By understanding your eligibility, coordinating FEHB with Medicare, and reviewing your plan options during open season, you can ensure that your healthcare needs are fully covered as you transition into retirement.

If you’re unsure about your retirement options for FEHB, consider consulting with a federal health benefits advisor. Advisors can guide you through your healthcare choices, help you compare costs, and ensure you make the most of your retirement benefits.