How would you like to wind up working three, four or five years longer than you had planned? Either that or leaving the comfort of the subsidized, cradle-to-grave federal employee health program, FEHBP, for coverage under the Affordable Care Act?
One of the major perks of being a federal or postal worker, or a retiree, is the government’s group health insurance program. The FEHBP. It is available to workers and retirees and their survivors regardless of age, health or preexisting conditions.
During the debate over the ACA, a.k.a. Obamacare, the FEHBP was the gold standard-type of health insurance that all Americans deserved.
The FEHBP is for life and then some, IF, you are a federal worker, retiree or survivor of a fed. But there is a catch. The five-year rule. It says the employee must be enrolled in one of the FEHBP plans (any one will do) for the five years prior to retirement in order to carry it into retirement. Many feds who piggyback on their private sector spouse’s health plan enroll in a low-premium FEHBP plan to comply with the so-called five-year rule. That way, when they (or the spouse) retire, they will be eligible for the lifetime coverage and options offered by FEHBP plans.
Workers and retirees have more than a dozen choices of plans, and they can switch during the annual open season (this year Nov. 10 to Dec. 8). Or anytime their marital or family status changes. Such as having a baby. Or losing a spouse to death or divorce. Or if they are in an HMO and move to another location.
The government pays the lions share of the FEHBP premium (generally around 72 percent) regardless of how much premiums go up each year. Workers and retirees have a variety of health plan choices, and options within many plans.
Earlier this month a reader, Ben S., said we had reported on survivor annuities and the five-year rule, but he couldn’t get any information from the government. I passed the buck to David Snell, director of federal benefits for the National Active and Retired Federal Employees. His response:
“There must be a survivor annuity from which the survivor can have the FEHBP premiums withheld. Mr. S. should know if he elected to provide a survivor annuity for his spouse.” He also said that while the five-year rule applies to the federal worker policy-holder, “there is no five-year coverage requirement for survivors to meet in order to be eligible to continue the health benefits, just that on the date the enrollee dies he must have had self and family coverage.”
Remember, the FEHBP may be the best company-style health plan around. Especially when you retire. But you need to understand, and comply, with the five-year rule, or you may wind up working long after your current target date.
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