Look Before You Leap Out of FEHB

Anyone considering dropping their FEHB coverage and enrolling in an exchange plan instead should note that by doing so they would lose the employer contribution toward premiums, which is worth about 70 percent of the total cost of health insurance (OPM has determined that the provision requiring Congress and its personal staff to leave FEHB meanwhile allows the employer contribution to continue for them). Also, premiums for exchange plans must be paid with after-tax money, unlike in FEHB where pre-tax payment effectively makes the premiums more affordable. In addition, anyone voluntarily leaving FEHB would lose eligibility to have FEHB coverage in retirement (unless they later returned to FEHB and remained covered by it for the five years before retirement), and if they died while in service, their survivors would not be eligible for FEHB coverage. In addition, FEHB-covered persons are exempt from the tax penalty under the Affordable Care Act that applies to those who don’t have health insurance on themselves and on dependents that meets certain standards; all FEHB plans have been certified as meeting those standards.