by Brian Swerdlow

If you work for the federal government then you appreciate the numerous benefits, including attractive and robust insurance options.  A standout perk is your ability to potentially continue your insurance coverages into retirement.  However, not all employees qualify, and specific requirements must be met.

Here’s a look at how some federal employees can maintain their government insurance benefits post-retirement.

First, some basics.

Federal employees have access to four primary insurance programs, each with distinct rules for post-retirement continuation:

  1. FEHB (Health Insurance)
  2. FEGLI (Life Insurance)
  3. FEDVIP (Dental/Vision Insurance)
  4. FEDLTC (Long Term Care Insurance)

Federal Employee Health Benefits (FEHB):

FEHB is one of the most significant benefits for federal employees and one which many employees wish to continue after retirement.  However, FEHB is loaded with stringent requirements for continuation into retirement. To maintain FEHB coverage:

  1. Immediate Retirement: The employee must retire with an immediate retirement, which means they qualify for an annuity that starts within 30 days of separation.
  2. 5-Year Rule: The employee must have been continuously enrolled in FEHB for the five years immediately preceding retirement.

It’s critical you know the immediate retirement requirements.

  • For FERS Employees:
    • You have attained the Minimum Retirement Age (MRA) and have 30 years of service.
    • You are 60+ years old with 20 years of service.
    • Or you are 62+ years old with 5 years of service.
    • You’ve reached the MRA with at least 10 years of service (*MRA+10 retirement allows FEHB retention but with a reduced pension).
  • Special Provisions Employees (e.g., Air Traffic Controllers, Law Enforcement, Firefighters):
    • Be 50+ years old with 20+ years of service.
    • Have 25+ years of service at any age.

If your spouse is also a federal employee, it doesn’t matter who carries the insurance as long as one of them has FEHB coverage.

Medicare Integration: Upon reaching age 65, retirees have the option to enroll in Medicare. They can:

  • Continue with FEHB only.
  • Enroll in Medicare and keep FEHB.
  • Suspend FEHB and choose a Medicare Advantage plan, with the option to reinstate FEHB during any Open Enrollment Period.

Medicare has four parts:

  • Part A: Hospital insurance, often free.
  • Part B: Covers doctor’s visits, ambulance services, and durable medical equipment, requiring a premium.
  • Part C: Medicare Advantage, combining Parts A and B, with a premium.
  • Part D: Prescription drug plan, which can supplement FEHB coverage.

FEGLI: The Federal Employees Group Life Insurance

If you want to continue your group life benefits (FEGLI) into retirement, you must:

  • Retire with an immediate retirement.
  • Be covered under FEGLI for the five years prior to retirement.
  • Be covered under FEGLI on the retirement date.

FEGLI premiums can be expensive in retirement, and many retirees find they need less life insurance coverage. It’s crucial to evaluate personal needs before continuing or canceling FEGLI coverage. Talk to a federal benefits specialist before you decide.

FEDVIP: Dental/Vision Insurance

FEDVIP is more flexible compared to FEHB and FEGLI. The only requirement is to retire with an immediate retirement. There’s no five-year rule for FEDVIP, and retirees can even enroll in dental or vision insurance after retirement if they weren’t previously covered.

FEDLTC: Long term care insurance.

The federal LTC insurance benefit, which was available through John Hancock Life & Health Insurance Company, currently covers nearly 270,000 people, making it the largest group long-term care insurance program in the nation.

However, the US Office of Personnel Management (OPM) decided to suspend new applications for coverage, effective December 19, 2022.  Individuals who are not currently enrolled may not apply for coverage, and current enrollees may not increase their coverage. The OPM has stated this suspension will remain in effect for 24 months or longer if it decides to extend the suspension period.

If you already have FEDLTC, however, and are getting ready to retire, there is good news.  FEDLTC is the most straightforward insurance to maintain post-retirement.  It is fully portable, so employees can keep this insurance even if they leave federal service before retirement age.

Summing it up:

Federal employees have valuable insurance benefits that can be carried into retirement, provided they meet specific criteria. Understanding these requirements ensures that employees can continue to enjoy their benefits without interruption. It’s advisable for federal employees to plan their retirement carefully, considering all the factors involved in maintaining their insurance coverage. Consulting with HR or a trained government benefits counselor can provide personalized guidance based on individual circumstances.

Ready to retire from government service?  Check out our Federal Employee retirement calculator.  It’s a free, useful tool to help you determine if your finances are ready for retirement.

www.federalemployeeadvocates.com/brian/