From your three-tiered retirement system to your Federal Employee Health Benefits (FEHB), you’re lucky to enjoy one of the most comprehensive benefits systems in the country. And, unlike many private sector workers, you can actually take your FEHB with you when you retire.
So, why do many federal employees decide to keep their health benefits when retiring?
- The government will pay for 72 percent of your premiums (a significant value, if you compare benefits with private sector retirees)
- FEHB is generally considered one of the best group health insurance plans on the market, with low premiums and significant coverage
- You can enjoy more flexibility in retirement planning – no waiting until you turn 65 to be eligible for Medicare, or purchasing your own healthcare plan with uncertain premiums and benefits from year to year.
But of course, as with any large, complex government system, your benefits can sometimes be confusing as well. When it comes to keeping your FEHB in retirement, there are two basic rules:
- You must be entitled to an immediate retirement when you leave your position
- You have had your health benefits for five years immediately preceding retirement (or you have FEHB less than five years, but did enroll immediately when you became eligible)
That sounds pretty straightforward, but the first rule confuses some people. What does “entitled to an immediate retirement” actually mean? Essentially, it means that if you opt for deferred retirement, you can’t keep your FEHB. However, if you separate from service and elect a postponed retirement, you can keep your health benefits. Those are two different situations, despite sounding quite similar, so make sure you schedule an appointment with us to discuss these options as you plan for your retirement.
