FEHB Coverage Isn’t Always Guaranteed in Retirement—Here’s the Decision That Can Make or Break It

Key Takeaways

• You must meet the 5-year enrollment rule to continue your FEHB coverage into retirement. Missing this window can lead to permanent loss of coverage.

• The decision to keep FEHB in retirement hinges on whether you’ve elected a survivor annuity if you want your spouse to remain covered after your death.

Why FEHB Matters More Than Ever in 2025

As healthcare costs continue rising, your Federal Employees Health Benefits (FEHB) coverage is likely one of your most valuable retirement assets. In 2025, average FEHB premiums have climbed again, with retirees seeing a 13.5% increase over 2024. Still, this coverage remains more affordable than many private-sector options, especially since the government continues to pay about 70% of the total premium.

But here’s the part many overlook: FEHB doesn’t automatically continue just because you retire. You need to meet certain eligibility requirements, and making the wrong choice now could jeopardize your lifelong access to this vital benefit.

You Must Retire With Immediate Annuity Eligibility

The first critical rule is that you must retire under conditions that qualify you for an immediate annuity. This means:

• Age 62 with at least 5 years of service

• Age 60 with at least 20 years

• Minimum Retirement Age (MRA) with at least 30 years

• MRA with at least 10 years (but with a reduced annuity)

Without qualifying for an immediate annuity at retirement, your FEHB coverage ends, and you lose the ability to re-enroll.

The 5-Year Enrollment Requirement

Perhaps the most overlooked FEHB rule is the 5-year requirement. To continue FEHB into retirement, you must:

• Be enrolled in FEHB continuously for the 5 years immediately before retirement, OR

• Be enrolled from your first opportunity to enroll, if less than 5 years have passed.

If you switch to a spouse’s plan or suspend FEHB for TRICARE, that may count, but only under strict conditions. Breaks in coverage, even for seemingly valid reasons, can disqualify you.

Coverage Must Be Under Your Own Enrollment

To carry FEHB into retirement, you need to be enrolled in your own name, not just as a family member on someone else’s plan. If you’re covered as a dependent on a spouse’s FEHB and then retire expecting to carry it forward, you’ll be in for an unpleasant surprise.

If both you and your spouse are federal employees, it often makes sense for the person planning to retire first to enroll in Self Plus One or Self and Family. This preserves continuity and future eligibility.

Survivor Annuity Is Mandatory for Spouse to Keep FEHB

If you want your spouse to continue FEHB coverage after your death, you must elect a survivor annuity at retirement. FEHB coverage for a surviving spouse terminates if no survivor annuity is in place.

This can be a costly oversight. Even if you maintain your own FEHB into retirement, your spouse will lose coverage unless a survivor annuity is selected. The reduction in your pension to provide this survivor benefit is typically worth the cost when you consider the value of lifelong health insurance.

What Happens if You Suspend FEHB?

Some retirees consider suspending FEHB coverage to enroll in other eligible programs like TRICARE, CHAMPVA, or Medicare Advantage. Suspension differs from cancellation:

• Suspending means you can later return to FEHB during Open Season or if you lose other coverage.

• Cancelling FEHB removes your eligibility forever.

In 2025, this strategy is still allowed, but you must notify OPM in writing and meet specific conditions. If you’re considering suspending coverage, do so carefully, and always keep records.

Enrolling Dependents in Retirement

Once you retire with FEHB, you can continue to cover eligible family members, including your spouse and children under age 26. However:

• You cannot add new dependents after retirement unless there’s a Qualifying Life Event (QLE), such as marriage or birth/adoption.

• Stepchildren must live with you in a parent-child relationship to qualify.

Also, former spouses lose eligibility for FEHB once a divorce is finalized, even if you continue to pay premiums unless a court orders otherwise.

Premium Payments in Retirement

After you retire, your FEHB premiums are typically deducted from your annuity on a monthly basis. If your annuity is too small to cover the full premium, you will be billed directly.

Keep in mind:

• Premiums do not go down in retirement. You pay the same share as active employees.

• Premiums can increase annually, as seen with the 2025 hike.

• If you miss payments, your coverage can be terminated.

It’s wise to monitor your annuity statements and stay on top of any changes.

Medicare and FEHB: Should You Enroll in Both?

At age 65, you’re eligible for Medicare. FEHB and Medicare can work together, but you need to make a decision about Medicare Part B. Here’s what you should know:

• Enrolling in Part B gives you fuller coverage and may reduce out-of-pocket costs

• FEHB plans often waive deductibles and copayments if you have Part B

• You must pay the monthly Part B premium, which is $185 in 2025

While enrollment is optional, delaying Part B may incur penalties unless you have credible coverage. Coordinating Medicare and FEHB properly can significantly improve your coverage in retirement.

Divorce and Death: How They Impact FEHB

Several life events can disrupt your FEHB coverage if you aren’t proactive:

• Divorce: Your ex-spouse loses FEHB eligibility unless a court order and survivor annuity are in place.

• Death: Your family loses coverage unless you elected a survivor annuity.

• Remarriage: Your new spouse may be added, but only with a QLE and possibly a new survivor benefit election.

You must report these changes promptly to OPM and adjust your enrollment or annuity elections accordingly.

What You Can Do if You’re Not Eligible

If you find out you won’t meet the FEHB continuation requirements, you still have options:

• Delay retirement to meet the 5-year rule

• Switch to Self Only enrollment now and get your own FEHB plan started

• Consider temporary continuation of coverage (TCC), which offers FEHB for up to 18 months after separation (but you pay the full premium)

• Explore private options, but remember, they often cost more and may cover less

Acting early gives you the most flexibility.

Planning Ahead Means Avoiding Costly Mistakes

The decision to carry FEHB into retirement is not automatic. You need to actively ensure you:

• Meet the 5-year continuous enrollment rule

• Retire with eligibility for an immediate annuity

• Elect a survivor annuity if your spouse needs continued coverage

• Understand premium deductions and payment obligations

• Coordinate your plan with Medicare starting at age 65

These are not decisions you want to make after retirement. If you miss any of these requirements, you may permanently lose one of your most valuable retirement benefits.

Secure Your Coverage with the Right Moves Now

FEHB remains one of the strongest benefits available to public sector retirees, but it’s not something you can take for granted. One missed detail or incorrect assumption could lead to a loss of lifelong coverage, with costly consequences. The good news? You still have time to act.

If you’re within five years of retirement, talk to a licensed professional listed on this website today. They can help you review your FEHB status, survivor benefit options, and Medicare coordination strategy to protect your future health coverage.