Reg Jones Expert's View

In my last article, I went over the rules governing what happens to your annuity if you return to work for Uncle Sam. To give you a quick review, if you met the time and age requirements to retire on an immediate annuity, in most cases the salary of your new job would be offset by the amount of your annuity. If you were separated on what’s called a discontinued service retirement – e.g., through an untimely event like a RIF – your annuity would stop and you’d get the full salary of your new job. In this article, I tell you what happens to your life and health insurance.

Regardless of how you retired, if you are reemployed in a position that offers Federal Employees’ Group Life Insurance coverage, you’ll be able to elect the amount of life insurance coverage you’d be entitled to as an employee. For FEGLI Basic, that’s your annual salary rounded up to the next $1,000 plus $2,000. You could also elect the same forms of optional coverage that were available to you when you were an employee. You would have to have the premiums deducted from your pay unless you decline that coverage.

The Federal Employees Health Benefits program doesn’t work that way. If you continue to receive an annuity when you are reemployed and are already covered by an FEHB plan, your coverage will continue and the premiums will come out of your annuity. If you continue to receive an annuity but were not covered by the FEHB when you retired, you won’t be allowed to enroll in it now.

On the other hand, if your annuity stops when you are reemployed and you had FEHB coverage as a retiree, that coverage will end. However, if that position offers FEHB coverage, you’ll be eligible to enroll in an FEHB plan and maintain continuous coverage. And if you weren’t covered by the FEHB as a retiree, you’ll be able to enroll when you are reemployed. In either case, premiums will come out of your salary.