You Can Keep FEHB After You Retire—But Here’s Why That Might Not Be Enough

Lisa Jordan
May 2, 2025

Key Takeaways

You can keep your FEHB coverage in retirement if you meet eligibility requirements, but it may not cover everything you need as your healthcare needs evolve.
Integrating Medicare with FEHB or considering supplemental coverage options is often necessary to fill potential gaps, especially after age 65.

FEHB Coverage Doesn’t Automatically End in Retirement

If you’re a government employee planning your retirement in 2025 or already enjoying your annuity, one of the best benefits you likely rely on is your Federal Employees Health Benefits (FEHB) coverage. The good news? You can keep your FEHB plan after retirement. But before you assume it will cover you indefinitely without any hiccups, it’s important to understand the full picture.

To maintain FEHB into retirement:

You must retire with an immediate annuity (not a deferred retirement).
You must be continuously enrolled in FEHB (or covered as a family member) for the five years immediately before your retirement or since your first opportunity to enroll.

Once these conditions are met, your FEHB coverage continues into retirement, and the federal government will still pay the same share of the premium it did while you were employed.

What FEHB Covers — and What It Might Miss

FEHB plans provide a wide range of medical benefits including preventive services, hospitalization, doctor visits, prescription drugs, and more. But as comprehensive as that sounds, there are areas where you might find it lacking in retirement.

Here are a few common gaps:

Long-term care services are not covered.
Dental and vision coverage may be limited or require separate enrollment through FEDVIP.
Hearing aids and home health care may not be fully covered depending on your plan.
Foreign travel emergencies are usually not included.

In your working years, these gaps may not seem like much. But as you age, especially beyond 65, these services become more relevant—and more costly.

Turning 65? FEHB Alone Might Not Be Enough

In 2025, if you turn 65, you’re eligible for Medicare. While you’re not required to enroll in Medicare Part B, many retirees do because relying solely on FEHB might not offer the full level of protection you need. Here’s why:

FEHB plans often reduce your out-of-pocket costs if you also have Medicare Part B.
Some plans coordinate benefits with Medicare, meaning they waive deductibles or reduce copayments if you have both.
Prescription drug coverage under FEHB may not match the cost protections of Medicare Part D, especially with the new $2,000 annual cap introduced in 2025.

Without Medicare, you may end up paying higher out-of-pocket expenses when you need services not fully covered by FEHB alone.

FEHB and Medicare Part B: What You Should Know

The big question you may face at 65 is: should you enroll in Medicare Part B if you already have FEHB? While it’s technically optional, it could be a costly mistake to skip it, especially long term.

Medicare Part B covers outpatient care, doctor services, and preventive screenings. If you don’t sign up when you’re first eligible, you may face late enrollment penalties unless you qualify for a Special Enrollment Period.

Here’s what happens when you combine Medicare Part B with FEHB:

Medicare pays first for eligible services.
FEHB acts as secondary insurance, often covering what Medicare does not.
You may pay less in deductibles and copayments because of the coordination between both plans.

In short, Medicare Part B can turn your FEHB plan into a more robust form of coverage. The two together provide broader protection and financial peace of mind.

Prescription Drug Coverage and FEHB in 2025

FEHB plans include prescription drug coverage, but as of 2025, Medicare Part D offers some new advantages:

There is now a $2,000 annual cap on out-of-pocket drug expenses under Medicare Part D.
You can opt into Medicare’s Prescription Payment Plan, allowing you to spread out costs across the year instead of paying all at once.
For those with FEHB and Medicare, many plans automatically coordinate drug benefits to avoid duplicate coverage.

If you don’t enroll in Medicare, your FEHB plan’s drug benefits may still be credible. But you could miss out on the cost-saving opportunities that Medicare Part D now offers.

What About Spouses and Dependents?

Another key point is how your retirement affects your family’s coverage. If your spouse or dependents are covered under your FEHB plan while you’re working, that coverage can continue as long as you remain enrolled.

But here’s what to keep in mind:

If your spouse is not eligible for Medicare and you’re switching to Medicare, they will rely solely on the FEHB plan.
Your spouse may need their own Medicare enrollment when they turn 65.
Family premiums tend to be higher, so the combined cost of FEHB plus Medicare may impact your overall budget.

It’s critical to look at the household picture when deciding how to combine or coordinate your benefits.

Cost Considerations: What You Might Pay in Retirement

In retirement, the government continues to pay about 70% of the total FEHB premium, leaving you to cover the remaining 30%. While this is a generous benefit, the portion you pay out-of-pocket still increases each year. In 2025, many enrollees see premium increases compared to 2024.

Here’s what else to consider:

You’ll pay a monthly premium for Medicare Part B, currently $185 in 2025.
Some FEHB plans may reimburse part of your Part B premium, but not all do.
If you delay Part B and enroll later, late penalties will apply unless you qualify for an exception.

All this adds up to one essential fact: you need to factor healthcare costs into your retirement budget, even if you keep FEHB.

Long-Term Care Is Still Your Responsibility

One of the biggest blind spots in FEHB coverage is long-term care. This includes assistance with activities of daily living (ADLs) like bathing, dressing, and eating—services often needed in older age or after a major illness.

Neither FEHB nor Medicare covers this kind of care for the long haul. While Medicare may pay for a short stay in a skilled nursing facility, ongoing custodial care is not included.

Here are your options:

Purchase long-term care insurance separately, though many plans are limited or expensive.
Set aside savings to pay out-of-pocket.
Rely on Medicaid, but only if your assets and income fall below the eligibility thresholds.

If long-term care becomes necessary, relying on FEHB alone can leave a major financial gap.

FEDVIP and Other Supplemental Options

If you’re looking to round out your FEHB coverage, you might consider the Federal Employees Dental and Vision Insurance Program (FEDVIP). While this is a separate plan, it complements FEHB nicely by covering services like:

Dental cleanings, crowns, and root canals
Eye exams, glasses, and contact lenses

FEDVIP is available to retirees and is paid separately. Enrollment typically occurs during the same Open Season as FEHB, from November to December.

If you’re considering private supplemental coverage or other alternatives, always review the policy carefully and make sure it integrates well with your existing benefits.

Reassess Your Coverage Every Open Season

Retirement doesn’t mean you stop making benefits decisions. In fact, it’s more important than ever to reassess your FEHB and Medicare options every Open Season. Plans change:

Premiums may increase.
Copayments and coinsurance may shift.
Covered services may expand or contract.

In 2025, changes to cost-sharing structures and pharmacy networks have already impacted some FEHB options. Reviewing your plan annually ensures you’re not overpaying or missing out on better benefits.

Your Health Needs Will Change—So Should Your Strategy

Staying in FEHB during retirement is a powerful advantage, but it’s not a complete solution by itself. Your healthcare needs are likely to increase with age, and the cost of care is unlikely to go down.

Here’s how to stay proactive:

Pair FEHB with Medicare Part B at 65 to reduce out-of-pocket costs.
Consider long-term care plans or savings to cover gaps.
Use Open Season to reevaluate your plan annually.
Explore FEDVIP to enhance your dental and vision benefits.

These steps can ensure you’re protected now and well into the future.

Protecting Your Retirement Health Coverage Starts Now

You can keep FEHB into retirement, but that doesn’t mean it should be your only line of defense. As 2025 brings new challenges and opportunities in the healthcare landscape, understanding your benefits and filling in the gaps is more important than ever.

Take the time to evaluate how FEHB, Medicare, FEDVIP, and other resources work together—and talk with a licensed agent listed on this website for personalized help building your retirement health strategy.