Key Takeaways
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If you retire on disability under FERS, your eligibility to continue Federal Employees Health Benefits (FEHB) depends on how your retirement is categorized and whether you meet specific service requirements.
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You can retain your FEHB coverage into retirement as long as you were covered for the five years immediately before your disability retirement or for the full period of your federal service if it was less than five years.
Understanding Disability Retirement Under FERS
Federal Employees Retirement System (FERS) offers disability retirement benefits
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Unlike optional retirement, disability retirement has unique rules, especially when it comes to retaining your health coverage. Keeping your FEHB benefits after retiring on disability depends heavily on your prior participation and your employment record.
FEHB Coverage: The 5-Year Rule Still Applies
One of the most critical conditions to continue your health insurance under the FEHB program is the five-year enrollment requirement. This applies to disability retirees as well:
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You must have been enrolled in FEHB for the five years immediately preceding your retirement, or
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You must have been enrolled for your entire period of federal employment if it lasted less than five years.
If you meet either of these conditions, your FEHB coverage will continue into retirement automatically, with the same government contribution toward your premium.
What If You Didn’t Meet the 5-Year Rule?
In certain cases, the Office of Personnel Management (OPM) may grant a waiver for the 5-year rule, but such waivers are rare and granted only in exceptional circumstances.
Situations where waivers might be considered:
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You enrolled in FEHB late because you were in a position not eligible for FEHB earlier.
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You had Tricare coverage (military health benefits) and then switched to FEHB.
Even in these cases, you must prove continuous coverage under another federal program and demonstrate that you intended to maintain federal health coverage into retirement.
Timing Matters: When You Separate and When You Apply
To avoid gaps in your health insurance:
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Submit your FERS disability retirement application before you separate from service, if possible.
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Alternatively, ensure the application is received by OPM within one year after separation.
When the retirement becomes effective can affect whether your FEHB continues without interruption. If OPM approves your disability application retroactively, your coverage will be reinstated and made retroactive as well.
How Your Health Coverage Continues After Approval
Once your disability retirement is approved:
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Your FEHB coverage continues with the same options and premiums you had as an active employee.
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You can make changes to your plan during the annual Open Season or if you experience a Qualifying Life Event (QLE).
You’ll receive the same government contribution toward premiums (roughly 70%), and premiums will be deducted from your annuity.
If You Are in a Temporary Position or Not Eligible for FEHB
If you were not enrolled in FEHB or were in a position that didn’t qualify you for FEHB before retirement, you are not eligible to continue FEHB as a retiree.
This is especially common in:
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Temporary or seasonal positions
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Intermittent appointments
In such cases, you may need to seek private insurance or consider enrollment in Medicare if eligible, though FEHB continuation would not be an option.
Coordination With Medicare Once You Turn 65
Disability retirees often reach Medicare eligibility while still receiving their FERS annuity. When you turn 65:
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You’re eligible for Medicare Part A (hospital insurance) at no cost if you have sufficient work history.
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You must decide whether to enroll in Medicare Part B (medical insurance), which comes with a premium.
FEHB and Medicare work together to provide more comprehensive coverage:
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Medicare pays first (primary payer), and
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FEHB acts as the secondary payer.
This coordination reduces out-of-pocket costs for retirees who carry both.
Disability Status Re-Evaluation and Impact on FEHB
If your condition improves, OPM may re-evaluate your disability status. If it determines that you are medically recovered or re-employed in a position at the same or higher grade and salary:
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Your disability annuity may stop.
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However, your FEHB can continue if you transitioned into regular retirement eligibility or returned to federal employment.
The key is to maintain continuous federal health coverage throughout these transitions.
Survivor Eligibility for FEHB After Your Death
If you die while receiving a FERS disability retirement, your eligible survivors (such as a spouse or dependent children) can continue your FEHB coverage if:
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You elected survivor benefits under your retirement.
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They were enrolled under your family plan at the time of your death.
Your survivor must receive a survivor annuity to maintain FEHB eligibility. This makes electing survivor benefits a critical decision at the time of retirement.
Common Mistakes That Can Jeopardize Your Coverage
It’s easy to overlook small administrative details that can result in big consequences. Here are a few missteps that could cost you your FEHB eligibility:
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Assuming disability automatically qualifies you to keep health insurance without meeting the 5-year rule.
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Failing to submit your application to OPM within the one-year post-separation window.
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Not electing survivor benefits, which jeopardizes FEHB for your family.
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Letting FEHB lapse during a temporary break in service, which resets your eligibility timeline.
What to Do Before Submitting Your Disability Retirement Application
To protect your health coverage, consider taking the following steps:
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Confirm you’re currently enrolled in FEHB and have been for the required time.
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Review your retirement record with your Human Resources office.
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Gather documentation to support your disability claim, including medical records.
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Consult a retirement benefits specialist or a licensed professional listed on this website.
The earlier you prepare, the more likely you are to avoid unnecessary gaps in your coverage or lost benefits.
Health Coverage Alternatives If You Don’t Qualify for FEHB
If you don’t meet the requirements to carry FEHB into retirement, you still have some options:
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Temporary Continuation of Coverage (TCC): Offers up to 18 months of FEHB coverage at full cost (both employee and government share).
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COBRA coverage: If applicable, allows you to maintain health coverage through your spouse’s plan.
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Medicare: Available to those 65 or older or under 65 with certain disabilities.
These alternatives can provide a safety net but often come with higher out-of-pocket costs and limited coverage compared to FEHB.
Why This Matters More Than Ever in 2025
In 2025, healthcare costs continue to rise, and more public sector employees are facing health challenges later in their careers. Disability retirement is not uncommon, but losing your FEHB coverage during this transition could leave you exposed to high premiums and limited access to care.
Staying informed, reviewing your eligibility, and making the right elections at retirement is essential to securing long-term healthcare coverage under FERS.
Don’t Risk Losing Your Health Benefits Over Paperwork
Disability retirement under FERS can provide financial and health security if managed correctly. But overlooking small eligibility rules or making assumptions can lead to major disruptions in your healthcare access.
Work with your agency, review your FEHB participation history, and consult with a licensed professional listed on this website to ensure you lock in the coverage you and your family need.
