Guidance Issued on FEHB Impact

OPM has issued detailed guidance on the health insurance aspects of phased retirement, reiterating earlier policy statements that on entry into phased retirement, an employee’s premiums will not be affected. “The normal rules governing proration of health benefits premiums for part-time career employees do not apply” and those paying premiums with pretax money through “premium conversion” salary withholding can continue to do so, since they remain employees—and not retirees, for whom that is not allowed. Also, entry into phased retirement will not be considered a “qualifying life event” of the sort that allows certain enrollment changes outside an open season. Similarly, changing from phased retirement back to full-time employment—which will be allowed at the agency’s discretion—will not be such a life event. When leaving phased retirement for full retirement, the phased retirement period will count toward the requirement that an individual be covered by FEHB for the five years leading up to retirement in order to continue it in retirement.