Reg Jones Expert's View

When you get ready to retire, you should give some thought to your Federal Employees Health Benefits (FEHB) coverage. And the first question you should ask is this: Will I be able to carry my health benefits coverage into retirement? As a rule, you may keep your FEHB coverage only if you are currently enrolled and have been enrolled for at least five years or from your earliest opportunity to enroll. While OPM has been given authority to grant waivers, they have little wiggle room.

If you aren’t eligible to carry your FEHB coverage into retirement, you will be given a 31-day extension of coverage at no cost to you. After that you may drop your coverage, covert to an individual contract, or ask for a Temporary Continuation of Coverage (TCC). The later will allow you to keep your FEHB coverage for up to 18 months. However, you will have to pay the full premium plus 2 percent to cover administrative costs.

The second question you should ask is this: Will I need the same level of coverage that I had as an employee? The simple answer to that question is probably yes, at least until you reach age 65 and become eligible for Medicare Part A (hospital insurance). At that time you will have to consider your options. If you are enrolled in a fee-for-service plan, such as Blue Cross-Blue Shield, you may want to consider enrolling in Medicare Part B (medical insurance). That way, nearly all of your medical expenses will be covered. On the other hand, if you are enrolled in an HMO, which already covers most of your medical expenses, you may decide not to enroll in Part B. The best time to make that decision is when you are approaching age 65.

One last question that is surely on your mind by now is this: How much will I have to pay for my FEHB coverage after I retire? Unless you are a postal worker, you’ll pay the same premiums as an employee would. The Postal Service pays a higher percentage of the premiums for its employees. However, when they retire, they begin paying the same premiums as federal employees and retirees. In either case, premiums will be paid on a monthly, rather than a biweekly basis.