Over the last three weeks, I’ve focused on the FEHB program, with emphasis on the new self plus one option. Now I want to move on to a larger question that readers keep asking me. “If I leave government on an immediate, postponed, deferred or disability annuity, will I be able to continue my Federal Employees Health Benefits coverage? And while you’re at it, I have the same question about my Federal Employees’ Group Life Insurance coverage.”
As a rule, you can only continue your FEHB and/or FEGLI coverage into retirement if you are 1) currently enrolled, 2) have been enrolled for at least five years or from your earliest opportunity to enroll, and 3) are retiring on an immediate annuity (including disability). If you are a FERS employee who is retiring on an immediate annuity but postponing its receipt to a later date to reduce or eliminate the 5 percent per year penalty for retiring under the MRA+10 provision, you’ll be able to reenroll in the FEHB program when your annuity begins. Note: If you leave government before being eligible to retire and later apply for a deferred annuity when you have the right combination of age and service, you can’t reenroll in either program.
While there is an automatic waiver of the FEHB five-year rule if you are accepting an offer of early retirement (VERA) from your agency, no waiver is possible for FEGLI. Nor are waivers of the “currently enrolled” or “retiring on an immediate annuity” requirements available under current law for either program.
Here’s what happens if you aren’t eligible to carry your FEHB and/or FEGLI coverage into retirement. Under the FEHB program, you’ll be given a 31-day extension of coverage at no cost to you. After that you can drop your coverage, covert to an individual contract or request Temporary Continuation of Coverage. TCC will let you keep your FEHB coverage for up to 18 months. However, you’ll have to pay 100 percent of the premiums plus 2 percent to cover administrative costs.
Under the FEGLI program, you’ll be granted the same 31-day extension of coverage that’s available in the FEHB program. After that your choices are limited. You can either drop the coverage or convert all or part of it to a private policy at your own expense.
If either FEHB or FEGLI coverage are important to you and you’re not eligible to continue them, it could be a good idea to wait until you do become eligible.
Note: There are no such restrictions on the Federal Long Term Care Insurance Program or the Federal Dental and Vision Insurance Program, both of which allow you to newly enroll after retirement.
Upcoming Live FEHB Open Season Webinar
To help you fully understand all of your new benefit options and choices for the upcoming FEHB open season, FEDweek is holding a live webinar on this very topic, including the new self plus one option. For more information on this upcoming live webinar go to http://www.fedweek.com/events/fehb-and-fegli-open-season-choices/.