Federal Employees Health Benefits Program
The Federal Employees Health Benefits (FEHB) program is open to almost all federal and postal employees on a voluntary basis. By enrolling in an FEHB plan, employees have an opportunity to acquire protection against the cost of health care service for themselves and certain family members.
Key features of FEHB are:
• Within 60 days from the date you are hired (or become eligible, if previously ineligible), you may enroll in a health benefits plan with group-rated premiums and benefits.
• Coverage is provided without a medical examination or restrictions because of age, current health, or pre-existing conditions.
• There are no waiting periods for benefits to kick in after the effective date of enrollment.
• There is catastrophic protection against unusually large medical bills.
• You have an annual opportunity, during open seasons, to enroll in a health benefits plan if you are not already enrolled or, if you are enrolled, to change to another plan or option.
• You can remain in the program after retirement if you meet certain requirements (see Coverage After Retirement, below).
• The cost of FEHB premiums is shared by the enrollees and the government, with active employees paying their share through payroll deductions, typically on a pretax basis, and retirees through annuity deductions on a post-tax basis.
Open seasons typically are held from the Monday of the second full workweek in November through the Monday of the second full workweek in December. Employees also can enroll or make other changes due to certain life events; retirees also may make certain changes due to those events.
There are about 260 health plan offerings in the program, a large majority of them health maintenance organizations (HMOs). There are several variations in plan design. Some plans are sponsored by employee organizations, and generally, to enroll in them you must be a member of the organization. Some organization plans are open to all FEHB-eligible people as adjunct members; others are restricted to specific agencies or occupations. HMOs are open to those within the geographic area serviced by that plan. Consult the plan brochure for more information.
Note: Prior to 2015, FEHB fee-for-service insurers were required to provide benefits to plan participants in states with a critical shortage of primary care physicians who used any health care provider licensed to perform the specific medical service. However, that “medically underserved” designation was ended as unnecessary in light of a Labor Department interpretation of the Public Health Service Act that expanded the geographic area of coverage for all licensed providers offering covered services within the scope of their license to all areas of all states.
Federal and postal workers also are covered by Medicare hospital insurance (Part A) for which they pay 1.45 percent of salary each biweekly period. Medicare eligibility typically begins at age 65. See FEHB and Medicare, below, for information about how the two programs coordinate.
The FEHB program complies with a Patients’ Bill of Rights. Under its provisions, consumers have the right to:
• receive accurate, easily understood information to help them make informed decisions about their health plans, professionals and facilities, including: accreditation status; compliance with state or federal licensing, certification, or fiscal solvency requirements; disenrollment rates; years in existence; corporate form; and compliance with standards (state, federal, and private accreditation) that assure confidentiality of medical records and orderly transfer to caregivers.
• information about networks and providers, including: board certification status and geographic location of all contracting primary and specialty care providers; whether they are accepting new patients; language(s) spoken and availability of interpreters; and whether their facilities are accessible to the disabled.
• a choice of health care providers that is sufficient to ensure access to appropriate high-quality health care. This includes: direct access to women’s health care providers for routine and preventative health care services; direct access to a qualified specialist within the network of providers for complex or serious medical conditions that need frequent specialty care; and transitional care for those with chronic or disabling conditions or who are pregnant where the provider either drops out of the program or is terminated under the carrier’s contract.
• access to emergency health care services when and where the need arises. Health plans use a “prudent layperson” standard in determining eligibility for coverage of emergency services without prior authorization.
• full participation in all decisions related to their health care. Consumers who are unable to fully participate in treatment decisions have the right to be represented by parents, guardians, family members, or other conservators.
• considerate, respectful care from all members of the health care system at all times and under all circumstances. Consumers who are eligible for coverage under the terms and conditions of a health plan or program or as required by law must not be discriminated against in marketing and enrollment practices based on race, ethnicity, national origin, religion, sex, age, mental or physical disability, sexual orientation, genetic information, or source of payment.
• confidential communication with health care providers and assurances of confidentiality for their personal health care information. Consumers also have the right to review and copy their own medical records and request amendments to their records.
Questions, Complaints, and Appeals
Questions about your health insurance policy should be addressed to your local personnel office. If your local personnel office needs further assistance, it should contact the designated agency insurance benefits officer at agency headquarters. The Office of Personnel Management posts general information on the FEHB program as well as certain information on individual plans and links to Internet sites of the plans at www.opm.gov/healthcare-insurance/healthcare. In addition, insurance carriers maintain toll-free numbers where you can get answers to questions about coverage, plan brochures and other information.
If you don’t agree with your health plan’s decision regarding a claim, review and follow the directions in the disputed claims section of the brochure. This section will tell you how to ask the plan to reconsider your claim. You must explain why (in terms of the applicable brochure coverage provisions) you feel the services should be covered.
If the plan again denies the claim, the disputed claims section of the brochure will tell you how to write to OPM to ask it to review the claim. You may call the contracts division to check on the status of your disputed claim review by dialing the telephone number provided on the acknowledgment they send you. However, the contracts division cannot give you a decision over the phone until they have completed the review and issued a written final decision.
Decisions by the contracts division are the final level of OPM review. If you are dissatisfied with the decision, you may file a complaint in the appropriate federal district court by December 31 of the third year after the year in which you received the disputed services, drugs, or supplies.
FEHB Eligibility and Enrollment Rules
Generally, federal and postal employees are eligible to voluntarily participate in the FEHB program unless their position is specifically excluded by law or regulation. Eligible persons also include presidential appointees, employees of Judicial Branch and most employees of the Legislative Branch. See below for certain exceptions and limitations; also see 5 CFR 890 and www.opm.gov/healthcare-insurance/healthcare/reference-materials/reference/eligibility-for-health-benefits.
Individual agencies determine eligibility. If your agency denies you coverage and offers you no supporting documentation, look up the rule in those sources, or contact your agency’s headquarters insurance officer.
Neither employees nor their family members are required to pass a physical examination to enroll for health benefits. Similarly, neither employees nor their family members can be excluded from joining an FEHB plan because of age or employment in a hazardous job.
See FEHB Coverage After Retirement, below in this section, for policies regarding coverage after retirement. See FECA Compensation Payments in Chapter 5, Section 5 for policies regarding coverage for those on workers’ compensation.
Two types of enrollment are available (note: a self plus one option is to be available starting in 2016; the second person would have to be eligible under standard family coverage policies as described below):
Self-Only—A self-only enrollment provides benefits only for you as the enrollee. You may enroll for self-only even though you have family members who otherwise would be eligible, but they will not be eligible for FEHB coverage even upon your death or disability.
Self and Family—A self and family enrollment provides benefits for you and your eligible family members. All of your eligible family members are automatically covered, even if you didn’t list them on your Employee Health Benefits Registration Form (SF 2809) or an electronic equivalent. You cannot exclude any eligible family member and you cannot provide coverage for anyone who is not an eligible family member.
An “eligible family member” means an enrollee’s spouse—including a common law marriage recognized in the state of residence or a same-sex spouse married in a jurisdiction (including in a foreign country) that recognizes such marriages, regardless of current residence; however, it does not include domestic partnerships, civil unions or other arrangements not formally recognized as a marriage. Also eligible are former spouses under certain conditions (see Chapter 7, Section 3) and children under age 26 (or any age if they are incapable of self-support because of a mental or physical disability that began before age 26), including legally adopted children, recognized children born out of wedlock, stepchildren and, in certain circumstances, foster children.
For a foster child to be eligible as a family member on your enrollment: the child must live with you; the parent-child relationship must be with you, not solely the child’s biological parent; you must be the primary source of financial support for the child; you must expect to raise the child to adulthood; and you must sign a certification stating that your foster child meets those requirements.
If you are in a same-sex domestic partnership that meets certain qualifications (see Domestic Partners in Chapter 8, Section 4) and living in a jurisdiction that does not recognize same-sex marriage, your partner’s children are eligible as well; however, you partner is not eligible. If you are seeking to cover a child of a same-sex domestic partner, you must certify that you would marry the partner were that option available in your state of residence. Rules at 5 CFR 890 govern situations such as moves among jurisdictions with differing policies. In some circumstances, children eligible for coverage under these conditions may not be eligible to have their share of premiums paid on a pretax basis (see Premium Conversion, below) and that portion must be paid with after-tax money.
If you divorce or terminate a qualifying domestic partnership, or if your spouse or qualifying partner dies, stepchildren remain eligible if they continue to live with you in regular parent-child relationships.
A federal employee under age 26 whose parent has FEHB self and family enrollment is covered under the parent’s enrollment. Children in that situation cannot have their own FEHB enrollment unless they have their own family (spouse and/or children) whom they choose to cover under their own self and family enrollment, or the parent is enrolled in an HMO plan and the child lives outside its coverage area. Turning age 26 is a qualifying life event that allows a federally employed child to enroll in the FEHB.
Eligible children may be covered under an FEHB self and family policy even if they also are eligible for employer-sponsored health insurance other than FEHB insurance of their own. If they have such coverage, that policy generally becomes the primary payer. If the primary insurer does not fully cover the illness or injury, the FEHB plan may act as a secondary payer, depending on its benefits structure. The enrollee must inform both plans that the child has other insurance coverage. Guidance is in Benefits Administration Letters 10-201 and 11-202 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters.
Eligibility for family coverage for legally married same-sex spouses and related children became effective June 26, 2013, the date of the U.S. Supreme Court decision in United States v. Windsor (133 S. Ct. 2675) ending the former definition of marriage, for federal benefits purposes, as only between a man and a woman. Guidance is in Benefits Administration Letter 13-203 at the above site.
Children who lose FEHB coverage due to reaching age 26 become eligible for 36 months of additional coverage at their own expense; see Temporary Continuation of Coverage below in this chapter.
FEHB-eligible persons subject to court or administrative orders requiring them to provide health benefits for their children must enroll for self and family coverage in a health plan that provides full benefits in the area where the children live or provide documentation to their agency that they have obtained other health benefits for the children. See Chapter 7, Section 3.
An enrollee’s parents or other relatives cannot be covered under a family policy.
Detailed family eligibility rules are at www.opm.gov/healthcare-insurance/healthcare/reference-materials/reference/family-members/#geneligcov. (Note: A small number of FEHB plans offer “affinity products” that allow people associated with enrollees, such as dependents beyond age 26 and unmarried domestic partners, to purchase health insurance coverage. Such insurance is separate from the FEHB, operates on its own terms, and has no government contribution. Any such products are described on a plan brochure’s “Non-FEHB” page.)
When spouses are both government employees, each may enroll individually or one spouse may enroll for the family. However, the eligible children of such a couple would be covered only if one spouse enrolls under the self and family option; enrolling individually does not cover children.
If you are a new employee, you may enroll in any available plan, option, and type of enrollment within 60 days after your date of appointment, unless your position is excluded from coverage. If you were employed in a position that was excluded from coverage and then appointed to a position that conveys coverage, you may enroll within 60 days after the change. If you are a non-appropriated fund (NAF) employee who moves to appropriated fund employment, you are eligible for coverage just as any other new employee, even if you have continued coverage under the NAF retirement system. At the time an employee becomes eligible to enroll, the employing office usually provides a Guide to Federal Benefits, which explains the FEHB and other federal benefits, and a Standard Form 2809, Employee Health Benefits Registration Form (some agencies have electronic equivalents). Eligible employees may enroll during the annual open season or at other specified times (see the Table of Permissible Changes in Enrollment, below). The Guide also is available at www.opm.gov/healthcare-insurance/healthcare under Plan Information and the form from your personnel office or at www.opm.gov/forms.
Agencies must provide employees entering leave without pay status (including due to a furlough; see Furloughs in Chapter 9, Section 1), or whose pay is insufficient to cover their premium payments, written notice of their opportunity to continue their FEHB coverage. Employees in an authorized leave without pay or other type of non-pay status generally can continue health insurance coverage for up to one year of the non-pay period. The 365 days of non-pay status may be continuous or may be interrupted by periods in a pay status that last less than four consecutive months. Agencies must give employees the opportunity either to directly pay their share of the premiums for these periods or to incur a debt to the agency to be withheld from future salary.
Part-Time Employees—Part-time employees are eligible for coverage under the same terms as full-time employees, except that the government share of the total premium is prorated according to the number of hours the employee works. The employee must pay the difference. (Note: Employees working part-time as phased retirees receive the full government share; see Phased Retirement in Chapter 3, Section 1).
Temporary, Seasonal and Intermittent Employees—Prior to changes to 5 CFR 890 effective November 17, 2014: most temporary employees were eligible for FEHB only after a year of current continuous employment and if eligible had to pay the entire cost of the premium; seasonal employees were eligible only if they worked at least six months a year and if eligible typically received a prorated government share of premiums depending on the hours they worked; and seasonal employees working six months or fewer a year and all intermittent employees were prohibited regardless of their working schedules. There were exceptions that made eligible certain temporary employees engaged in wildland firefighting or fire protection or in certain emergency response work, regardless of their work schedules; they received the government contribution toward coverage when employed and could continue coverage when not employed but entirely at their own expense.
Under the revised rules, employees on temporary appointments or on seasonal or intermittent schedules are eligible to enroll in FEHB if they are expected to work at 130 hours per month for at least 90 days (total, not annually). Note: This does not apply to the U.S. Postal Service because it has a separate health program for its non-career employees.
If your employing office expects you to meet the standards, you are eligible to enroll upon notification by that office. Hours of employment for this purpose consist of regularly scheduled work and overtime plus Family and Emergency Medical Leave Act leave, injury compensation leave, leave to perform active military duty and leave for medical treatment for disabilities incurred in military duty. If the expectation of your hours changes from less than 130 hours per calendar month to 130 or more, you become eligible to enroll upon notification by your employing office, so long as you meet the 90-day standard. The determination is prospective only; agencies do not have to count the actual number of hours worked per month.
If you are expected to meet the 130 hour a month standard but to work fewer than 90 days, you are considered to be in a waiting period. If the expectation changes to at least 90 days of employment, you will be eligible to enroll upon notification by your employing office, but no later than the 91st day of employment.
If you enroll under these provisions, you receive the full government contribution to premiums. Standard rules about breaks in service, continuity of coverage and non-pay status generally apply.
Employing offices must promptly determine eligibility of new employees and of current employees who become newly eligible, and must promptly offer eligible employees an opportunity to enroll. Under limited circumstances, eligibility can be waived due to an agency’s mission needs.
Temporary employees who had completed one year of continuous employment and were eligible for coverage without a government contribution under the prior policy may enroll with a full government contribution so long as they meet the 90-day and 130 hour per month standards. Employees who fell under the exceptions for firefighting, fire protection or emergency response but who do not meet those standards remain covered by those prior policies.
Once you are enrolled under these policies, eligibility and the government contribution to premiums will not be revoked, regardless of your actual work schedule, your employer’s expectations of your subsequent work schedule, or entry into non-pay status unless you: separate from federal service; receive a new appointment (in which case eligibility will be determined by the rules applicable to the new appointment); or exceed 365 days in non-pay status (subject to extension, if applicable, for time off work on the types of leave described above).
If you separate from service with eligibility for an annuity under a federal employee retirement program, the coverage counts toward the five-year requirement as described in FEHB Coverage After Retirement, below in this section, and the standard government contribution continues during your retirement. If you separate without retirement eligibility, you are eligible for continued coverage as described in Temporary Continuation of Coverage, below in this section.
Also see Benefits Administration Letter 14-210 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters.
Affordable Care Act—The Patient Protection and Affordable Care Act, Public Law 111-148, requires each individual to maintain “minimum essential coverage” each month or else be subject to a tax penalty, unless eligible for certain exceptions. This includes a responsibility to maintain such coverage for children and others who are dependents for federal income tax purposes.
All FEHB plans qualify as providing such coverage for those who are personally enrolled or who are covered under a family enrollment, spouse equity, or temporary continuation of coverage. If you are eligible for FEHB but have health insurance on yourself (and on dependents, if applicable) from another source instead—such as through a spouse’s non-federal employment—check to see if it qualifies as providing minimum essential coverage. If that plan does not qualify (and you are not eligible for an exception from the tax penalty), it may be to your advantage to enroll in FEHB instead; that can be done during the annual open season or if you experience a qualifying life event as described in Changes Outside of Open Season, below.
The ACA’s tax penalty provision also is a consideration for employees or annuitants who are not enrolled in FEHB or other qualifying coverage. Those who are eligible for FEHB but choose not to take it (or who are ineligible for FEHB) are eligible to enroll in ACA insurance exchange plans. However, there is no government contribution to the premiums for those plans and premiums must be paid on an after-tax basis.
In addition, if an employee is enrolled in an exchange plan rather than FEHB and the employee dies, family coverage under FEHB for survivors would not be available even if they are eligible for a survivor annuity. The same is true if the employee retires: FEHB coverage would not be available since an employee must be in an FEHB plan on the date of retirement to continue coverage in retirement (see FEHB Coverage After Retirement, below).
Detailed guidance is in Benefits Administration Letters 13-205 and 13-206 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters; information on what is deemed minimum essential coverage, the exceptions, and the potential tax penalty for those not enrolled in the FEHB or other qualifying plan is at www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions-for-Individuals-and-Families.
Also under the ACA, effective in calendar year 2014, members of the House and Senate and their personal staffs are ineligible for FEHB. They must get their health care coverage through the Act’s insurance exchange system or through another source such as employer-sponsored health insurance of a spouse (Note: this requirement does not apply to other FEHB-eligible persons, including other Legislative Branch employees). Each member’s office is responsible for deciding which employees are affected by this policy by each October for the following year, and the designation cannot be changed during a plan year. While members of Congress and affected staff may enroll in any plan for which they are eligible, the employer contribution continues only if they choose the D.C. Health Link Small Business Market plan based in the District of Columbia. The employer contribution for that plan is paid under the same formula applying under FEHB. At retirement they are eligible to return to the FEHB so long as they meet the rules for carrying FEHB into retirement (see FEHB Coverage After Retirement, below); for them, enrollment in the ACA plan counts toward meeting the five-year coverage requirement. See BAL 13-207 at the above OPM online address.
USPS Health Benefits Plan—A related but separate program, the USPS Health Benefits Plan, is available to city carrier assistants, mail handler assistants, postal support employees and most rural carrier non-career employees and non-bargaining non-career employees. Also see Chapter 12, Section 4.
Pathways Program—Participants in the career developmental Pathways Program (see Special Hiring, Recruitment and Placement Programs in Chapter 8, Section 1) are eligible to enroll and cover family members who meet FEHB eligibility standards if the Pathways appointment is scheduled to last at least 12 months and they are scheduled to be in pay status at least one-third of that time. Coverage continues while in nonpay status as long as the individual is in the Pathways Program. See 5 CFR 890.303.
Participants in the career developmental Pathways Program (see Special Hiring, Recruitment and Placement Programs in Chapter 8, Section 1) are eligible to enroll and cover family members who meet FEHB eligibility standards if the Pathways appointment is scheduled to last at least 12 months and they are scheduled to be in pay status at least one-third of that time. Coverage continues while in nonpay status as long as the individual is in the Pathways Program. See 5 CFR 890.303.
FEHB Plan Options
The FEHB program allows federal employees and annuitants to choose among fee-for-service plans, which work on a reimbursement model, health maintenance organizations (HMO) plans, which provide care on a prepaid basis through contracts with physicians and hospitals in a particular geographic area, options that offer features of both, and plans with variant funding arrangements.
Fee-for-Service Plans—The government-wide “service health benefit plan” is a fee-for-service plan provided through Blue Cross and Blue Shield organizations that any employee may join. It is called a service benefit plan because it works on the principle of paying benefits either to the enrolled participant or directly to the doctor or hospital that provides the treatment or service. Blue Cross and Blue Shield also offers a network-only option.
Another type of FEHB fee-for-service plan is the employee organization plan. Some of these plans are exclusive to certain groups of employees, while others allow any FEHB-eligible person to join the plan as an adjunct member of the organization.
A preferred provider organization option in a fee-for-service plan gives enrollees the choice of using doctors and other providers within the plan’s network (the PPO benefit) at a lower cost, or using ones outside the plan’s network.
A fee-for-service plan may also make available a point of service option through a network of providers. There is an incentive for enrollees to use these providers because doing so usually results in a waiver of deductibles and a smaller than normal co-payment.
HMOs—Types of HMO options in the FEHB enrollees include (note: availability varies by area):
• Group Practice Prepayment Plans—These plans have their own medical center or centers and their own doctors who practice as a group. Employees who live in an area where there is a group practice prepayment plan that participates in the FEHB program may choose to join it instead of one of the other plans.
• Individual Practice Prepayment Plans—In these plans, doctors agree to accept payments from the plan instead of requiring the patient to pay their usual charge. Like the group practice plans, these plans operate only in certain areas. Employees residing in a locality that has such an approved plan may choose to join it.
• Mixed Model Prepayment Plans—These are a combination of group practice and individual practice plans.
Some HMOs offer a point of service option in which enrollees may use providers who are not part of the HMO network. However, there is a greater cost associated with choosing non-network providers. Enrollees usually pay deductibles and coinsurances that are substantially higher than the payments when they use a plan provider. They also need to file a claim for reimbursement.
‘Consumer-Driven’ Options—Such plans feature a pool of money available to be spent up-front, then a deductible, and then standard coverage—either HMO-based or fee-for-service. The catastrophic limit usually is higher than what is common in other plans. The plans are designed to encourage enrollees to be selective in their use of health care. Unused portions of the allowance can be rolled over to future years, subject to certain limits.
High-Deductible Health Plans—These are plans that feature a high deductible and a tax-favored account—either a health savings account or health reimbursement arrangement—whose money can be used to pay the deductible and certain other medical costs.
A health savings account is available to anyone who is not eligible for Medicare benefits (generally, meaning not 65 or older) and who does not have another potential source of paying the deductible, such as a spouse’s separate health insurance plan or a flexible spending account (thus, with the exception noted below, enrollees in HSA plans may not have health care FSAs, although they remain eligible for dependent care FSAs). Plans with a health savings account option must offer a health reimbursement arrangement, which is available for those who do not qualify for an HSA. Those with HRAs are not limited in their FSA options.
In HSA/HRA plans, the minimum deductible is set according to the tax code; plans may set higher deductibles, up to certain limits. The account is funded by a portion of the premiums. HSA account holders (but not HRA account holders) may invest additional funds with the combined total of automatic and voluntary contributions limited to annual maximum amounts established by the IRS. These investments are made by sending money directly to the plan, not by payroll deduction; investors then take a deduction from their taxes for that year. The tax code also sets limits on contributions and out-of-pocket expenses, both of which are indexed each year.
Money in the account is available to be withdrawn tax-free to pay the deductible plus certain other qualified medical expenses that do not count toward the deductible. HRA account holders must pay eligible expenses out of the account; an HSA account holder has the option of drawing down the account or paying the cost out of pocket. Money not spent in any one year can be rolled over for use in future years. HSA accounts earn interest tax-free; HRA accounts do not earn interest. There is no limit on how high the accounts can build. Money drawn out for expenses other than the allowable medical costs is taxable, plus a penalty may apply.
An HSA enrollee can keep the account even if retiring or leaving the government. Funds in an HRA are forfeited if the account holder leaves federal employment—if still employed—or switches health insurance plans.
After the deductible is paid, such plans feature coverage more or less comparable to that of the carrier’s plans that do not feature such accounts. Certain types of preventive care do not count against the deductible.
Participation in HSA/HRA plans does not affect the “premium conversion” arrangement through which active employees may pay FEHB premiums with pretax dollars (see Pretax Payment of FEHB Insurance Premiums, below).
Although the IRS generally doesn’t permit individuals to hold both an HSA and a health care flexible spending account, an exception applies for FSAs that cover only certain expenses. See the information about “limited” health care FSAs under Health Care Accounts in Chapter 1, Section 9.
Unlike flexible spending account allotments, employees who elect HSA allotments may modify their allotments at any time so long as the change is prospective and in accordance with the payroll provider’s procedures. The HSA allotment election will continue until the employee modifies or revokes that allotment election.
HSA enrollees may make pretax allotments to those accounts through payroll withholding using the same method that they would use to establish other allotments from pay. Employees are responsible for ensuring their enrollment and contributions are in accordance with IRS rules. Neither payroll providers nor self-service system providers verify employee eligibility or check to ensure employee contributions are within annual limits. There is a 20 percent penalty for medical expenses paid from an HSA that are later found to be non-eligible. (Note: Over-the-counter drugs or medicines are eligible for reimbursement only if prescribed by a doctor, with the exception of insulin, for which no prescription is needed.)
Detailed Plan Information—Employees seeking more detailed information about the benefits provided by different plans should consult the plan brochures that can be obtained at www.opm.gov/healthcare-insurance/healthcare/plan-information.
FEHB Premium Rates
The premium rates for FEHB plans typically change each year, following the annual contract negotiations between OPM and each insurance carrier. Any new plan rates resulting from these negotiations begin on the first day of the first pay period in January of the following year for active employees, and Jan. 1 for retirees.
FEHB premium costs are shared by the government and the participating employee or annuitant. The maximum government contribution is set at 72 percent of the weighted average cost of all plans, not to exceed 75 percent of the cost of any specific plan. The enrollee pays the balance, which averages about 30 percent of the total premium.
The government contribution is the same for most federal employees, with the following exceptions:
• Employees appointed under the Federal Part-Time Career Act of 1978 only receive a portion of the government contribution paid to full-time employees, with the government’s share pro-rated in proportion to the percentage of full-time service regularly performed. (Note: Employees working part-time as phased retirees receive the full government share; see Phased Retirement in Chapter 3, Section 1).
• Temporary, seasonal or intermittent employees, if eligible, receive the full government share but exceptions apply; See FEHB Eligibility and Enrollment Rules above.
• The U.S. Postal Service contributes an additional amount toward the cost of premiums for its employees but not its retirees.
Premium Assistance—Public Law 111-03, the Children’s Health Insurance Program (CHIP) Reauthorization Act of 2009, allows states to subsidize health insurance premium payments for certain children in low-income households who have access to qualified employer-sponsored health insurance coverage. Most FEHB plans, excluding high-deductible health plans, meet the act’s definition. Therefore, FEHB-eligible enrollees who meet the criteria for child health assistance in their state are eligible to receive state premium subsidy assistance payments to help them pay FEHB premiums.
Benefits Administration Letter 09-203 (at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters) directed that eligible FEHB enrollees are to receive state premium assistance subsidies directly—state policies may allow for subsidies to be paid to the employer instead—and the employing agency is to continue to withhold the full employee share of the premium.
The law also allows eligible employees to enroll in the FEHB or to change enrollment from self-only to self and family if an eligible family member gains health insurance coverage or Medicaid or CHIP assistance (in addition to when such coverage is lost), within 60 days after the date the employee or family member is determined to be eligible for assistance. Employees may make these enrollment changes regardless of whether they are covered under premium conversion.
In addition, premium assistance is available in certain circumstances as described in Temporary Continuation of Coverage, below.
Pretax Payment of FEHB Insurance Premiums
All employees in the Executive Branch who are participating in the FEHB and whose pay is issued by an Executive Branch agency are eligible to have their premiums paid with pretax dollars. This includes deductions for retroactive coverage, payback of premiums from a prior period of leave without pay and other adjustments.
This premium conversion arrangement results in reductions in federal income, Social Security and Medicare taxes. In many jurisdictions, state and local taxes will also be reduced. On the other hand, federal retirement, Thrift Savings Plan and life insurance benefits are not affected by participation in premium conversion. For example, it does not affect base salary for the purpose of determining “high 3” salary years for retirement benefits calculation.
Participation in premium conversion is automatic unless the employee waives it using the FEHB Premium Conversion Election/Waiver form, available from agency personnel offices and at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters/2000/00-215_attach3.pdf.
Enrollees may change participation status in premium conversion during the annual FEHB open season, or during the calendar year upon a qualifying life event (see Changes Outside of Open Season, below). Participation continues uninterrupted unless the employee opts out.
Enrollment or participation in premium conversion ends if you terminate or are terminated from federal government employment. If you are eligible and elect to participate in Temporary Continuation of Coverage (TCC), you pay those premiums directly on an after-tax basis; premiums that are paid under TCC are not eligible for premium conversion.
While annuitants generally are not eligible for premium conversion (see the exception below), re-employed annuitants employed in positions that convey FEHB eligibility may participate in premium conversion. For them to do so, their FEHB enrollment must be transferred from their retirement system to the employing agency. For considerations relating to re-employed annuitants, see Chapter 4, Section 4.
Premium conversion may result in somewhat lower Social Security benefits for federal employees who pay Social Security taxes on their salaries, primarily those under the Federal Employees Retirement System. Therefore, in rare situations mainly involving lower-paid employees, it may be advantageous to pay full Social Security taxes rather than the lower ones resulting from premium conversion. These cases do not involve employees covered by CSRS or CSRS Offset.
An employee participating in premium conversion generally has the same flexibility as a person who chooses not to participate. Because of the tax laws, there are two exceptions that might play into a decision to take or waive premium conversion. Those who waive premium conversion can at any time drop health insurance or change from a self and family enrollment to self-only. However, those participating in premium conversion may do so only during an open season or at the time of a “qualifying life event” (see Changes Outside of Open Season, below). More information is at www.opm.gov/healthcare-insurance/healthcare under Reference Materials.
Premium Conversion for Some Retirees—Section 845 of the Pension Protection Act of 2006 allows limited pretax payment of FEHB premiums (among certain other forms of insurance) for retired “public safety officers.” OPM in Benefits Administration Letter 07-201 (at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters) determined that the Civil Service Retirement System and the Federal Employees Retirement System are eligible retirement plans under the act and that retired public safety officers are deemed to have made an FEHB premium conversion election for this purpose. To qualify, the distribution must be paid directly from the retirement system to the insurance provider.
As a result, retired public safety officers whose CSRS or FERS annuity payments include a direct premium payment to an FEHB carrier may self-identify eligibility for, and self-report, a tax exclusion to the Internal Revenue Service. Premiums of up to $3,000 for coverage of the enrollee, spouse or dependents can be excluded, but only for amounts that otherwise would be included in taxable income, and the amount excluded cannot be used to claim a medical expense deduction.
IRS Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits, at www.irs.gov/pub/irs-pdf/p721.pdf defines public safety officers as including retired law enforcement officers and firefighters. That publication also contains additional information on this tax advantage. Consult a tax adviser for guidance.
Changes Outside of Open Season
Outside of open season, you can enroll in the FEHB program, change your enrollment, change to self-only or cancel coverage only in connection with certain events called qualifying life events (QLEs). In some cases, a change in premium conversion (see above) also is allowed. Detailed policies and instructions are on Standard Form 2809 at www.opm.gov/forms.
The major QLEs that permit enrollment or change in enrollment are:
• A change in family status: marriage (including a same-sex marriage meeting the standards described in FEHB Eligibility and Enrollment Rules, above); birth or adoption of a child; acquisition of a foster child; legal separation or divorce (including of same-sex marriages); and death of a spouse or dependent.
• A change in employment status: you are re-employed after a break in service of more than three days; you return to pay status after your coverage terminated during leave without pay status or because you were in leave without pay status for more than 365 days; your pay increases enough for premiums to be withheld; you are restored to a civilian position after serving in the uniformed services; you change from a temporary appointment to an appointment that entitles you to a government contribution; or you change to or from part-time career employment.
• You or a family member lose FEHB or other coverage: under another FEHB enrollment because the covering enrollment was terminated, canceled, or changed to self-only; under another federally sponsored health benefits program; under Medicaid or similar state-sponsored program for the needy; because your membership terminates in the employee organization sponsoring the FEHB plan; or under a nonfederal health plan.
• For employees not participating in premium conversion, a determination that an FEHB-eligible employee or a family member who is eligible for FEHB family coverage is eligible for premium assistance under a Medicaid or State Children's Health Insurance Program.
When one of these events occurs, you may: enroll; change your enrollment from self-only to self and family; change your enrollment to another FEHB plan or option; change your enrollment to self-only; or cancel your enrollment. A change to self-only may be made only if the QLE causes you to be the last eligible family member under the FEHB enrollment. A cancellation may be made only if you can show that as a result of the QLE, you and all eligible family members now have other health insurance coverage.
QLEs that permit changes in enrollment are shown in the table in this section.
Leave Without Pay—In certain circumstances, if you, your spouse, or a covered dependent enter or return from a period of leave without pay (LWOP), that may constitute a qualifying life event. If you enter a period of LWOP of more than 31 days, you have the option to terminate or continue FEHB coverage. If you elect to continue FEHB coverage, you must choose one of the options to pay your share of the premium. These options are pay-as-you-go (paying your share of the FEHB premium directly to your agency while on LWOP), and catch-up (where the agency remits your share of the FEHB premium to OPM during the period of LWOP and you repay it on return to pay status). In addition, under IRS rules an agency may, but is not required to, offer a prepay option.
Preadmission Certification Procedures
Under the FEHB, plans have cost containment measures in place. All plans require preadmission certification of all non-emergency hospital admissions. Check your plan brochure for additional information.
If you are enrolled in a managed fee-for-service plan, the preadmission certification provision makes you responsible for ensuring that the requirement is met. You or your doctor must check with your FEHB plan before you are admitted to the hospital. If that doesn’t happen, your benefits for the admission will be reduced by $500, not to exceed the cost of the admission. This means that if you do not satisfy the preadmission certification requirement before being admitted to the hospital, you will be penalized by forfeiting up to $500 in benefits your FEHB plan would otherwise pay to you.
For example, if you meet your annual deductible, then incur $1,000 in covered hospitalization charges, you will receive $800 in benefits from your FEHB plan if that plan pays 80 percent of hospitalization charges, as long as you are pre-certified to be admitted to the hospital. However, if, in that same situation, you fail to satisfy the preadmission requirement, $500 in benefits are lost as a penalty and you will receive only $300 in benefits from your FEHB plan.
Coordination of Benefits
FEHB carriers must follow standard coordination of benefit rules established by the National Association of Insurance Commissioners (NAIC) in order to make sure that payments to providers and enrollees do not duplicate payments of other health benefits coverages the enrollee may have.
The most common instances where OPM coordinates with other programs are:
• Tricare and CHAMPVA. FEHB carriers coordinate Tricare/CHAMPVA benefits according to their statutes. Tricare covers certain dependents of military persons and retirees of the military. CHAMPVA provides health coverage to disabled veterans and their eligible dependents. When Tricare or CHAMPVA and FEHB cover the enrollee, FEHB pays first. Also see FEHB, CHAMPVA and Tricare, below.
• FEDVIP. Some FEHB plans provide some dental and/or vision benefits. For enrollees of plans offering those benefits who also are enrolled in the Federal Employees Dental and Vision Insurance Program (see Section 4 of this chapter), the FEHB carrier pays first and the FEDVIP carrier pays part or all of the rest, depending on the plan’s terms.
• Medicaid. When the enrollee has Medicaid and FEHB, FEHB pays first.
• Medicare. Retirees are eligible for Medicare at age 65. FEHB carriers coordinate with Medicare and Medicare makes the final determination regarding who is primary. The most common situation is when you or your spouse are age 65 or over and have Medicare. Generally, in that case, if you are an active federal employee, FEHB pays first and if you are retired, Medicare pays first. Medicare’s rules for coordinating benefits are described in FEHB plan brochures. To facilitate benefits coordination with Medicare, OPM and carriers work with Medicare, including through an OPM-Medicare data matching agreement. Also see FEHB and Medicare, below.
• Spouse coverage. Benefits of enrollees (whether active employees or retirees) with coverage both through FEHB and through a spouse’s private sector employer are coordinated according to the NAIC guidelines. Generally, an enrollee’s own coverage is primary to coverage through a spouse.
• Other group coverage. Benefits of enrollees who have other insurance of their own, such as coverage as a retiree from private employment, are coordinated according to the NAIC guidelines. Generally, the plan that covers a person as a current employee pays before the plan that covers the person as a retiree.
• No-fault coverage. FEHB carriers coordinate the payment of medical and hospital costs under no-fault or other automobile insurance that pays benefits without regard to fault according to the NAIC guidelines.
• Children’s coverage. Where a child covered under an FEHB self and family policy has employer-sponsored health insurance of his or her own, that policy is the primary payer and FEHB is the secondary payer.
Temporary Continuation of Coverage
Temporary Continuation of Coverage (TCC) is a feature of the FEHB program that allows certain people—typically, employees who separate from employment and enrollee dependents who lose coverage—to temporarily continue their FEHB coverage after regular coverage ends. TCC enrollees must pay both the employee and government shares of the premium plus a 2 percent administrative charge.
Note: Under 5 U.S.C. 8905a(d)(4), Defense Department employees who are involuntarily separated by a reduction in force or who volunteer to be separated from a “surplus position” pay only the employee contribution if they elect TCC. See Defense Department RIF and Placement Benefits in Chapter 9, Section 2.
Under certain conditions, federal employees and members of their families who lose their FEHB coverage due to the occurrence of a qualifying life event are eligible for TCC.
For employees, the only qualifying event is separation from federal service. However, you are not entitled to TCC if you are involuntarily separated due to gross misconduct. If your human resources office decides that you were separated because of gross misconduct, it must notify you of that fact and explain what you can do to appeal the decision.
For children, the qualifying events are:
• losing eligibility as a family member of a current FEHB enrollee, most commonly on reaching age 26 (see FEHB Eligibility and Enrollment Rules, above);
• in the case of children whose coverage has continued beyond age 26 because of their inability to support themselves due to a disability occurring before they reached age 26, recovering from the disability or becoming self-supporting; and
• in the case of death of the sponsoring employee or annuitant, ineligibility for a survivor annuity or the end of a survivor annuity. See Survivor Benefits for Children in Chapter 3, Section 4 regarding death of an annuitant; see Benefits Upon Death in Service in Chapter 8, Section 4 regarding death of an active employee.
Your spouse is not eligible for TCC in his or her own right, even if you are separated from the government and you decide not to elect TCC or you die. However, if your marriage ends other than by death, your former spouse is eligible for TCC. The qualifying events are divorce and annulment of the marriage. (See Chapter 7, Section 3 for policies on continued FEHB enrollment for former spouses through a court order.)
For a former employee, a TCC family enrollment covers the same family members as were covered under the regular family enrollment. Family members must continue to meet the same eligibility requirements as under a regular family enrollment. A new family member, such as a new spouse or a newborn child, who is added during the TCC enrollment period is also covered as a family member.
For a child with a TCC family enrollment, his or her spouse and children are covered family members.
For former spouses, family members are limited to children of both the federal employee and the former spouse. The new husband or wife of a remarried former spouse is not covered as a family member.
Separating employees can continue TCC for up to 18 months after the date of separation. An employee’s children and former spouses can continue TCC for up to 36 months after: (1) the date of the qualifying event if it occurs while the child or former spouse is covered as a family member of an employee or annuitant under a regular FEHB enrollment, or (2) the date of the employee’s separation if the qualifying event occurs while the child or former spouse is covered under the TCC enrollment of a former employee.
If a child’s or former spouse’s qualifying event occurs while the employee is enrolled for family coverage under TCC, the child or former spouse may elect TCC in his or her own right; however, the TCC coverage may not continue beyond 36 months after the date of the worker’s separation.
Except in cases of gross misconduct, separating employees who would lose FEHB coverage because of their employment termination are eligible for TCC. It is the responsibility of the worker’s employing office to provide notice to the employee (within 61 days after regular FEHB enrollment terminates) of the right to enroll under TCC. Generally, separating employees must submit their TCC election notice to their employing agency within 60 days after the date of separation or within 65 days after the date of notice from the employing agency, whichever is later.
Employees should ask their agency to provide them with TCC information before or on the day they separate. TCC enrollments—and premiums—always begin on the 32nd day after an employee’s regular coverage ends (which happens on the last day of the pay period in which the employee separates). The earlier the TCC enrollment form is submitted, the earlier the agency can process it, and the less likely that the worker will receive a large bill for retroactive TCC coverage.
Employees who retire and are eligible to continue their regular FEHB coverage are not eligible for TCC, since their regular FEHB coverage does not stop.
To apply for TCC, separating employees (or their child or former spouse, as applicable) must complete Standard Form 2809, Employee Health Benefits Registration Form, available from your personnel office or at www.opm.gov/forms (or its electronic equivalent) and submit it to their employing office within the time limit noted above. Employing offices can accept late enrollments in very limited circumstances. Enrollees are not limited to the plan or option in which they were covered when the regular FEHB coverage ended. Employees or other eligible individuals may enroll in any plan for which otherwise qualified. (Some plans require that enrollees live or work in a certain geographic area or belong to the sponsoring employee organization.)
If an employee’s child wants TCC, it is the employee’s responsibility to notify the employing office within 60 days after the qualifying event and supply the child’s mailing address. (Since the enrollment will be in the child’s name, the child must complete the election form and the child will be billed for the coverage.)
If someone other than the employee notifies the employing office about the child’s eligibility, the employing office will notify the child of his or her TCC rights, but the child’s 60-day time limit to elect TCC begins with the qualifying event, not the date of the employing office’s notice of TCC rights.
Enrollees may elect either self-only or self and family enrollment; however, as noted above, the individuals who qualify as family members under a TCC family enrollment vary depending on whether the enrollee is a former employee, a child, or a former spouse. If individuals who are eligible for TCC cannot make an election on their own behalf due to a mental or physical disability, a court-appointed guardian may file an election for that person.
An enrollee who loses FEHB coverage other than by cancellation (including cancellation for nonpayment of premiums) has a 31-day temporary extension of coverage, at no cost, in the same enrollment category held at separation for the purpose of converting to a non-group contract with the current health benefits plan if the plan offers such conversions—many don’t. This is true even when the enrollee also has the right to elect temporary continuation of FEHB coverage. TCC takes effect on the day that the 31-day temporary extension of coverage ends. Coverage is retroactive to that date if the enrollment processing is completed later.
Depending on the circumstances, a timely election can be made up to 126 days after the qualifying event. A person who waits that long to enroll is billed for the entire 95-day period of retroactive coverage. In cases where the employing office accepts a late election, the period of retroactive coverage for which the enrollee is billed is even longer. If the enrollee does not pay the bill for the retroactive coverage, the TCC enrollment is canceled retroactively to the beginning date and the person is not eligible to re-enroll.
FEHB and Medicare
Upon reaching age 65, most federal employees and retirees become eligible for Medicare. Generally, plans under the FEHB program help pay for the same kind of expenses as Medicare. FEHB plans also provide coverage for prescription drugs, routine physicals, emergency care outside of the United States and some preventive services that Medicare doesn’t cover. Some FEHB plans also provide coverage for dental and vision care.
However, Medicare covers some orthopedic and prosthetic devices, durable medical equipment, home health care, limited chiropractic services, and medical supplies, which some FEHB plans may not cover or only partially cover. For a fuller description of Medicare, see Chapter 5, Section 8.
FEHB plans are limited to paying the Medicare fee schedule amount for physician services provided to retired FEHB enrollees age 65 and over who are not enrolled in Medicare Part B. Medicare participating providers can collect no more than the Medicare fee schedule amount from these enrollees. Medicare non-participating providers can collect no more than the limiting charge amount, which is 115 percent of the fee schedule amount. This reduces both what the plan and the enrollee can be charged by doctors.
Medicare Enrollment Issues—Most Medicare-eligible persons on reaching age 65 are eligible for Part A (hospital insurance) benefits premium-free. Part A will help cover some of the costs that an FEHB plan may not cover, such as deductibles, coinsurance, and charges that exceed the plan’s allowable charges. There are other advantages to enrolling in Part A, such as being eligible to enroll in a Medicare managed care plan.
Enrollees don’t have to take Part B (primarily physicians’ services) coverage if they don’t want it, and an FEHB plan can’t require them to take it. There are some advantages to enrolling in Part B:
• An enrollee must be enrolled in Parts A and B to join a Medicare Advantage plan.
• An enrollee has the advantage of coordination of benefits between Medicare and the FEHB plan, reducing out-of-pocket costs.
• An FEHB plan may waive its co-payments, coinsurance, and deductibles for Part B services.
• Some services covered under Part B might not be covered or only be partially covered by an FEHB plan.
Anyone enrolled in an FEHB HMO may go outside of the plan’s network for Part B services and receive reimbursement by Medicare when Medicare is the primary payer.
Those who don’t enroll in Medicare as soon as they are eligible must wait for the general enrollment period (January 1-March 31 of each year) to enroll, and Part B coverage will begin the following July 1. Their Part B premiums will go up 10 percent for each 12 months that they could have had Part B but didn’t take it. However, this penalty generally does not apply to those who didn’t take Part B at age 65 because they were covered under health insurance such as FEHB as an active employee or were covered under a working spouse’s group health insurance plan. They may sign up for Part B without penalty within eight months from the time the enrollee or spouse stops working or is no longer covered. An enrollee also can sign up at any time when covered by the group plan.
Medigap Enrollment Issues—FEHB is not one of the standardized Medicare supplemental insurance policies known as Medigap (or Medicare SELECT) policies. However, many FEHB plans and options will supplement Medicare by paying for costs not covered by Medicare, such as the required deductibles and coinsurance, and by providing additional benefits not provided under Medicare.
An FEHB enrollee generally doesn’t need to purchase a Medigap policy since FEHB and Medicare will coordinate benefits to provide comprehensive coverage for a wide range of medical expenses.
Part D Enrollment Issues—Persons eligible for both FEHB and Medicare may enroll in both FEHB and the Medicare Part D prescription drug program. However, both OPM and the Centers for Medicare and Medicaid Services provide information to potential enrollees stating that FEHB prescription drug coverage is generally better than that of plans available under Medicare Part D and that duplicative coverage is unnecessary. Nevertheless, some FEHB enrollees elect to purchase Part D. In some cases, they are eligible for Medicare’s subsidies for low-income individuals that reduce or eliminate premiums, deductibles and cost-sharing under Part D. Individuals eligible for this subsidy and wishing to take it may need to maintain their FEHB coverage because prescription drug benefits are integrated into FEHB plans; beneficiaries may not terminate FEHB drug benefits without losing their medical benefits as well. Benefits for those enrolled in both are coordinated through Medicare’s automated data sharing system for secondary providers or through other arrangements.
Which Pays First—Medicare law and regulations determine whether Medicare or FEHB is primary (pays benefits first). Medicare automatically transfers claims information to the FEHB plan once a claim is processed, so the enrollee generally doesn’t need to file with both.
An FEHB plan must pay benefits first when the enrollee is an active federal employee or re-employed annuitant (even if age 65 or older) and either the enrollee or covered spouse has Medicare, unless the re-employment position is excluded from FEHB coverage or the enrollee is enrolled in Medicare Part B only. An FEHB plan must also pay benefits first for the enrollee or a covered family member during the first 30 months of eligibility or entitlement to Part A benefits because of End Stage Renal Disease (ESRD), regardless of employment status.
Medicare must pay benefits first when the enrollee is an annuitant, and either the enrollee or covered spouse has Medicare. Medicare also must pay benefits first when the enrollee is receiving workers’ compensation and the Office of Workers’ Compensation Programs has determined that the enrollee is unable to return to duty.
FEHB Enrollment Issues—As an enrollee, you may change FEHB enrollment to any available plan or option at any time beginning on the 30th day before becoming eligible for Medicare. You may use this enrollment change opportunity only once. You may also change enrollment during the annual open season, or because of another event that permits enrollment changes (such as a change in family status).
Once Medicare becomes the primary payer, you may find that a lower-cost FEHB plan is adequate. Also, some plans waive deductibles, coinsurance, and co-payments when Medicare is primary. (Note: Several FEHB plans are conducting pilot programs in which those enrolled in both FEHB and Medicare may voluntarily participate. The FEHB plan pays part or all of the cost of the enrollee’s Medicare Part B premium and in return, the enrollee must pay the same cost sharing as enrollees in the plan who are not enrolled in Medicare.)
An FEHB fee-for-service plan won’t necessarily cover all out-of-pocket costs not covered by Medicare. A managed fee-for-service plan’s payment is typically based on reasonable and customary charges, not on billed charges. In some cases, Medicare’s payment and the plan’s payment combined will not cover the full cost.
Out-of-pocket costs for Part B services will depend on whether the doctor accepts Medicare “assignment.” When a doctor accepts assignment, you can be billed only for the difference between the Medicare-approved amount and the combined payments made by Medicare and your FEHB plan. When a doctor doesn’t accept assignment, you can be billed up to 115 percent of the Medicare-approved amount (the “limiting charge”) when the FEHB plan’s payment and Medicare’s payment don’t cover the full cost.
Although you will usually have to pay the FEHB HMO’s required co-pays and deductibles, some HMOs waive such payments when Medicare is primary. However, you must still use the HMO’s participating provider network to receive services and get required referrals for specialty care.
Medicare Managed Care Plan Issues—If you enroll in a Medicare managed care plan, you may not need FEHB coverage because the Medicare managed care plan pays many of the same benefits. Review their benefits carefully before making a decision.
If you provide documentation to your retirement system that you are suspending FEHB coverage to enroll in a Medicare managed care plan, you may re-enroll in FEHB if you later lose or cancel the Medicare managed care plan coverage. If you voluntarily cancel Medicare managed care plan coverage, you must wait until the next open season to re-enroll in FEHB. If you involuntarily lose coverage under the Medicare managed care plan, you may re-enroll in FEHB from 31 days before to 60 days after losing the Medicare managed care plan coverage, and your re-enrollment in FEHB will be made effective the day after the Medicare managed care plan coverage ends. An involuntary loss of coverage includes when the Medicare managed care plan is discontinued or when you move outside its service area.
Each FEHB plan brochure provides information on how that plan’s benefits are coordinated with Medicare. Some HMOs participating in FEHB will coordinate to the enrollee’s greater advantage for those who enroll in the company’s FEHB HMO and its Medicare managed care plan.
Further information on FEHB and Medicare is at www.opm.gov/healthcare-insurance/healthcare/medicare.
FEHB, Tricare, and CHAMPVA
“Tricare for Life” coverage for Medicare-eligible uniformed services retirees, their survivors and eligible dependents is advantageous for cost reasons for many Medicare-eligible military health care beneficiaries who also are eligible under the FEHB. Further, the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) provides beneficiaries of the Department of Veterans Affairs who are over age 65 with coverage secondary to Medicare similar to benefits provided to uniformed services beneficiaries under the Tricare or Tricare for Life programs.
Annuitants and Former Spouses—Current FEHB annuitants and former spouses who are eligible for these programs may suspend (rather than cancel) their FEHB coverage and premium payments. Regulations at 5 CFR 890 allow these individuals to re-enroll in the FEHB during an open season, or immediately if they are involuntarily disenrolled from the non-FEHB coverage. The intent is to allow eligible beneficiaries to avoid the expense of continuing to pay FEHB premiums while they are using other coverage, without endangering their ability to return to the FEHB in the future. The policy also applies to those eligible to enroll in Tricare’s Uniformed Services Family Health Plan.
Annuitants or former spouses can suspend FEHB coverage to use Tricare or CHAMPVA at any time. Annuitants can call OPM’s Retirement Information Office at (888) 767-6738 to obtain a suspension form. Former spouses can get the form from the employing office or retirement system maintaining their enrollment.
Eligible individuals must submit a completed suspension form and provide all necessary documentation to show eligibility for Tricare or CHAMPVA during the period beginning 31 days before and ending 31 days after the date they designate as using Tricare or CHAMPVA instead of FEHB coverage. If the documentation showing your eligibility for Tricare is received within that period, the suspension becomes effective at the end of the day before the day you designated. Otherwise, the suspension becomes effective at the end of the month in which OPM receives your documentation.
An annuitant, survivor, or former spouse may not suspend his or her own FEHB coverage while allowing family members to continue coverage under the FEHB. The coverage of all family members is suspended as well. Nor can an annuitant, survivor, or former spouse suspend his or her family members’ FEHB coverage while remaining covered under the FEHB. An annuitant, survivor, or former spouse can change to self-only coverage, but this cancels all family members’ coverage and takes away their future enrollment eligibility.
If you suspend FEHB coverage to use Tricare or CHAMPVA instead, you can re-enroll in the FEHB for any reason during a future open season. If you are involuntarily disenrolled from Tricare or CHAMPVA, you are eligible to immediately re-enroll in the FEHB. Your request to re-enroll must be received within the period beginning 31 days before and ending 60 days after your Tricare or CHAMPVA coverage ends. Otherwise, you must wait until an open season.
If an annuitant dies during his or her suspended FEHB enrollment, his or her survivor will be eligible to re-enroll in the FEHB as long as the annuitant was enrolled in self and family coverage when he/she suspended FEHB coverage and made arrangements to leave a survivor annuity.
Active Employees—Actively working civil service employees may not suspend their FEHB coverage to use CHAMPVA, Tricare or Tricare for Life. However, they can cancel their coverage for that purpose. Employees who do not participate in premium conversion may cancel their enrollment at any time. For employees who participate in premium conversion, eligibility for CHAMPVA or Tricare is not a qualifying life event that would allow them to cancel their FEHB enrollment. These employees may cancel only during an annual FEHB open season.
If an employee who canceled FEHB coverage to use CHAMPVA, Tricare or Tricare for Life decides to return to FEHB coverage, the employee can do so during a future open season. If the employee loses CHAMPVA, Tricare or Tricare for Life coverage involuntarily, the employee can immediately re-enroll in the FEHB.
Before an employee cancels FEHB coverage to use Tricare or Tricare for Life, the following should be considered:
• To be eligible to continue FEHB coverage after retirement, a retiring employee must be enrolled under the FEHB program (or covered as a family member) for the five years of service immediately before retirement, or, if less than five years, for all service since the first opportunity to enroll (waivers are allowed in certain situations; see FEHB Coverage After Retirement, below). Employees can count their coverage under Tricare toward meeting this requirement. However, the employee must be enrolled in an FEHB health plan on the date of retirement to continue coverage.
• If the employee dies when the cancellation is in effect, any surviving spouse will not be eligible to continue FEHB health benefits coverage.
Information about Tricare can be obtained by calling (877) 988-9378 (West), (877) 874-2273 (North) or (800) 444-5445 (South) or at www.tricare.mil. Information about CHAMPVA can be obtained by calling (800) 733-8387 or at www.va.gov/hac/forbeneficiaries/champva.
FEHB Coverage After Retirement
Eligibility—Federal employees are allowed to continue their health benefits coverage after they retire if they meet certain conditions. Generally, to continue FEHB coverage as a retiree, you must retire on an immediate annuity; and you must have been continuously enrolled under the FEHB program (or covered as a family member) for the five years of service immediately preceding your retirement or, if less than five years, for all service since your first opportunity to enroll (see 5 U.S.C. 8905(a)). While you can count coverage under Tricare toward meeting this requirement, to continue coverage in retirement, you must be enrolled in an FEHB health plan on the date you retire.
Note: The term continuous enrollment includes separate periods of federal employment interrupted by a break in service, as long as FEHB coverage was in effect at the time of the break and has been continuous since the break, and the combination totals five years.
Employees who separate and are eligible for a deferred annuity cannot begin health insurance coverage when their deferred annuity begins. Employees must retire on an immediate annuity to be eligible to continue their health insurance coverage. (For employees retiring under FERS, an immediate annuity includes one based on the minimum retirement age and ten years of service even though the employee may postpone receipt of that annuity to a later date.)
Under 5 CFR 630.212, employees who are retiring because of a downsizing have the right to use their accrued annual leave to qualify for continuing their health insurance into retirement under certain circumstances.
The Office of Personnel Management will grant pre-approved waivers of the five-year requirement to employees who have been:
• covered under the FEHB program continuously since the beginning date of the agency’s latest statutory buyout authority, or OPM-approved buyout or early retirement authority;
• retire during the statutory buyout or OPM-approved buyout/early retirement period; and
• receive a buyout, take early optional retirement, or take discontinued service retirement based on an involuntary separation due to reduction in force, directed reassignment, reclassification to a lower grade, or abolishment of position.
Employees who meet these requirements do not need to write a letter requesting a waiver. Instead, agencies must attach a memorandum to the employee’s retirement application stating that the employee meets the requirements for a pre-approved waiver by OPM. That certification must include the number of the public law granting the agency’s buyout authority and the beginning and ending dates of the agency’s buyout period.
OPM also may waive the eligibility requirements when it determines that an individual’s failure to satisfy the requirements was due to exceptional circumstances and that it would be against “equity and good conscience” not to allow the individual to be enrolled in FEHB as an annuitant (see 5 U.S.C. 8905(b) and 5 CFR 890.108). Individuals seeking waivers must provide OPM with evidence that they intended to have FEHB coverage as an annuitant, that the circumstances that prevented them from meeting the eligibility requirements were beyond their control, and that they acted reasonably to protect their right to continue coverage into retirement. They must include: all health benefit enrollment forms (SF 2809’s and SF 2810’s) or electronic enrollment verification; service history SF 2801-1 for CSRS or SF 3107-1 for FERS; proof of coverage under Tricare if applicable; a copy of the agency buyout or early retirement authority letter from OPM, if applicable; the exact date the employee plans to retire; and any medical documentation the employee wants OPM to consider if an employee or a family member has a medical condition that is a factor in the decision to retire. Waiver requests should be sent to: OPM, Retirement Benefits Branch, 1900 E St. N.W., Washington, DC 20415-3532.
Special Eligibility Rules for Defense Department Employees—5 U.S.C. 9902(i) authorizes a permanent buyout and early retirement program within DoD; the periods are renewed each fiscal year starting October 1. OPM will grant pre-approved waivers to DoD employees who:
• have been covered under the FEHB program continuously since the start of the current fiscal year;
• retire during the DoD buyout/early retirement period; and
• receive a buyout, take early optional retirement, or take discontinued service retirement based on an involuntary separation due to RIF, directed reassignment, reclassification to a lower grade, or abolishment of position.
DoD employees who meet the above requirement do not need to write a letter requesting a waiver. Instead, human resources offices must attach a memorandum that provides a statement that the employee meets the requirements for a pre-approved waiver by OPM, the beginning and ending date of the buyout/early retirement period during which the employee retired, and a statement that the employee was enrolled in the FEHB on the beginning date of the period during which he or she retired and that he or she was enrolled continuously to the date of retirement. Employees who do not qualify for a pre-approved waiver may request a waiver on a case-by-case basis as explained above.
Premiums—After retirement, the government continues to pay the same contribution that is paid for active employees. The applicable rate of the retiree’s share of the premium will be deducted from the monthly retirement annuity check. If the annuity is not enough to cover the health insurance premiums, the premiums can be paid directly to OPM, as explained in Direct Payment of Premiums, below.
Federal employees and retirees (excluding Postal Service employees) pay the same amount for their premiums. However, when postal employees retire, they no longer receive an additional amount toward their cost of health insurance, which requires them, as retirees, to pay the same as all other federal workers and retirees.
Retirees generally are ineligible to pay premiums with pretax money, as explained in Pretax Payment of FEHB Insurance Premiums, above.
Family Coverage—Retirees who are enrolled for self and family can have family members continue coverage until such time as they become ineligible—for example, when a covered child reaches age 26. However, the widow(er) of a federal retiree who did not elect a survivor benefit cannot continue FEHB insurance after the retiree’s death (unless otherwise eligible, such as by being a federal employee himself or herself). A deceased employee must have been enrolled for self and family at the time of death. All survivors who meet the definition of “family member” continue their health benefits coverage under the enrollment as long as any one of them is entitled to a survivor annuity.
Suspending Coverage—Medicare-eligible federal retirees and former spouses can suspend their FEHB enrollment and enroll in a Medicare-sponsored prepaid health plan. If that plan stops participating for any reason, they can re-enroll in FEHB and not lose a day of coverage. However, if they voluntarily disenroll from the Medicare plan, they may not reinstate their FEHB coverage until the annual open enrollment season. Medicare-eligible retirees interested in making this choice should contact their retirement system. Former spouses who are Medicare-eligible should get in touch with the agency that maintains their enrollment. See FEHB and Medicare, above.
Also, annuitants, survivors, and former spouses who are enrolled under the spouse equity provisions of FEHB may suspend their FEHB coverage to use the Peace Corps insurance program under 5 CFR 890. These individuals may re-enroll in the FEHB program immediately if they involuntarily lose their Peace Corps coverage, or during the annual FEHB open season.
Rehired Annuitants—For special considerations for re-employed annuitants, see Chapter 4, Section 4.
Direct Payment of Premiums
Certain employees (as well as annuitants and compensationers) who have insufficient pay on an ongoing basis to cover their health insurance premiums may pay those premiums directly. Typically, these are employees who are in a non-pay status. Employing offices are required to give written notice to employees as soon as possible after the office becomes aware that they are in non-pay status or their pay is insufficient to cover premiums. The notice offers employees the choice of terminating the enrollment or continuing the enrollment and agreeing to pay the premiums directly or incur a debt to the agency. If the employee elects to continue the enrollment, the agency must pay OPM the premiums due on a current basis. If the written notice is not acted on and returned within 31 days (45 days for employees residing overseas), the employing office must terminate the enrollment. Employees whose FEHB enrollment is terminated may re-enroll in any FEHB plan upon returning to pay and duty status without having to wait for an open season or other enrollment event.
For More Information
More detailed information about the federal government’s health insurance program and policies are in FEHB law (5 U.S.C. 89), regulations (5 CFR 890) and the FEHB Handbook at www.opm.gov/healthcare-insurance/healthcare under Reference Materials. General information and plan contacts are at www.opm.gov/healthcare-insurance/healthcare/plan-information/plans.
The "Managing My Own Health" site at www.opm.gov/healthcare-insurance/special-initiatives/managing-my-own-health provides information that enrollees can use in planning for screenings and other health care, plus online health care record keeping.