If you work for the U.S. government, you probably signed up for the Federal Employees Health Benefits The FEHB covers medical expenses, including prescription medications and dental and vision care. Employees can also sign up for a Flexible Spending Account (FSA) and choose from multiple life insurance options.

But you won’t be on the job forever. While you can keep your federal employee health insurance after retirement, there are some requirements you’ll need to be aware of as you start planning.

Post-retirement FEHB requirements

Eligibility for FEHB Benefits

To retain your FEHB benefits into retirement, you must have been enrolled in the program for the five years immediately preceding your retirement (or since your first opportunity to enroll). This is known as the "five-year rule." Suppose you've recently joined the federal government. In that case, you'll need to work for at least five years to keep your medical coverage after retirement. Meeting this requirement is crucial as FEHB retirement healthcare benefits work with Medicare to cover a more exhaustive list of medical expenses.

When you start working for the federal government, retirement benefits are part of the package. This includes a monthly annuity, which pays you a portion of your salary from retirement until you die. In addition to this annuity, you'll be entitled to medical benefits, including health, vision, and dental.

Retirement Qualifications

Federal employees must meet specific age and service requirements to qualify for retirement. For example, employees born after 1969 must reach age 57 to retire, while those born before 1969 have different retirement age requirements. Employees are eligible for full benefits at age 62 with at least five years of service, or at age 60 with 20 years of service. They can also retire at their Minimum Retirement Age (MRA) with 10-30 years of service, with a reduction in benefits for each year under age 62.

Post-Retirement Benefits

Upon retirement, federal employees receive a monthly annuity, which pays a portion of their salary from when they retire until they die. This annuity includes medical benefits, including health, vision, and dental insurance, provided the eligibility criteria are met.

Post-retirement medical benefits eligibility is also based on your age. You can retire with benefits after five years of service if you're age 62 or older. Otherwise, you'll be expected to be satisfied with a minimum number of years of service.

Employers may offer early retirement benefits in some situations, such as workforce reductions. Employees must have at least 25 years of service to qualify. If you're over age 50, you may be eligible with only 20 years of service.

Automatic coverage transfer

Federal employee health insurance plans generally transition automatically upon retirement. When you’re ready to retire, you’ll need to complete Standard Form 3107: Application for Immediate Retirement (FERS), with assistance from your HR department. If you've been separated for 30 days or more and wish to officially retire, you can mail your application.

Once your HR department submits your paperwork, the Office of Personnel Management (OPM) will process it. Processing times can vary, so it’s important to start the process early to ensure your benefits are in place when you retire.

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The 5-Year Rule and spouses

Federal retirement health insurance requires you to be in your job for at least five years prior to your retirement date to get benefits. But that same minimum doesn’t apply to your spouse. You can even get married after you retire and add your new spouse to your plan.

Chances are, your retirement will provide you decades of enjoyment. However, it’s also important to think about what will happen to your spouse’s benefits after death. If your spouse qualifies for a survivor’s annuity, benefits come with it. Premiums for those benefits will be taken out of your spouse’s annuity payment.

5-Year Rule exceptions

Rules are made to be broken, including those set up for FEHB retirement. The OPM can waive the five-year requirement at its own discretion. If you’re retiring with less than five years of service, it will be on you to request a waiver.

The OPM can waive the five-year rule under specific circumstances. To get an exception, you’ll need to prove the following:

• You intended to have coverage after retirement.
• You lost that privilege due to circumstances beyond your control.
• You acted reasonably to protect your ability to have access to retirement.

In the third case, you’ll need to show that you gathered information on what you needed to do to continue your benefits after retirement. This includes reviewing your federal employee health benefits plan and familiarizing yourself with all the applicable rules.

Cost of health insurance for federal retirees

Of course, one of your biggest questions is likely what will federal employee health insurance cost? The good news is that your premiums won’t increase. One thing that will change, though, is how often you’ll pay them. As with your paycheck, your premiums will be deducted from your annuity. Since you’ll be receiving a monthly annuity payment, rather than a paycheck, you’ll find you’re paying premiums monthly.

Temporary Continuation of Coverage

If your retirement is involuntary, you may be eligible for Temporary Continuation of Coverage (TCC). The OPM healthcare division will defer to your own HR department to determine whether you’re eligible for this. If your request is granted, you’ll need to pay both yours and the government’s portion of your premium, along with a 2 percent administration fee.

Bottom line

The Federal Employees Health Benefits (FEHB) program is one of the perks you get as a reward for loyal service. It’s important to coordinate your Medicare benefits with your federal medical benefits to make sure you’re fully covered. Your HR department can walk you through what you’ll need to do to make sure you have the coverage you need at a price you can afford.