Understanding Federal Employee Health Benefits: Eligibility, Coverage, and Waiver of 5-Year Rule for Retirement

The Federal Employee Health Benefits (FEHB) Program is a cornerstone of health insurance for federal employees, offering a wide array of health plans and benefits. This article explores eligibility criteria, available health plans, and the specifics of FEHB coverage, including the waiver of the 5-year rule.

Federal Agency News: FEHB Waiver for 5 Year Rule

The 5-year rule for the Federal Employees Health Benefits (FEHB) program requires that federal employees be continuously enrolled in FEHB for the last five years of service before retirement to continue coverage. However, there are waivers available in certain situations.

The Office of Personnel Management (OPM) can grant waivers in limited cases, such as:

• If an employee accepts an early retirement offer (VERA) from their agency.
• If an employee is covered under FEHB continuously since their agency’s latest buyout authority or an OPM-approved early retirement or buyout authority, and they retire under one of these programs.
• If an employee faces involuntary separation due to a reduction in force (RIF), directed reassignment, reclassification to a lower grade, or abolishment of position.

If an employee qualifies for a waiver, their agency will attach a memorandum to their retirement application stating that they meet the requirements.

Learn about Federal Employees Retirement, including FEHB plans, TSP, and FERS at a free online seminar for federal retirement planning.

Basics of the Federal Employee Health Benefits Program

Overview of the FEHB Program 

The FEHB Program is a comprehensive health benefits program designed to provide federal employees, retirees, and their eligible family members with access to health insurance. Established in 1960, the program is one of the largest employer-sponsored health benefits programs in the world. It offers a variety of health plans, including fee-for-service plans, health maintenance organizations (HMOs), and consumer-driven health plans. The program is administered by the Office of Personnel Management (OPM), which ensures that federal employees have access to quality health care services. The FEHB Program operates by allowing federal employees to choose from a range of health insurance plans during the annual open season or upon experiencing a qualifying life event.  The FEHB Program provides a flexible framework that accommodates the diverse needs of federal employees, ensuring that they have access to necessary medical services and health benefits.

Benefits of Enrolling in the FEHB Program

Enrolling in the FEHB Program offers numerous benefits, including comprehensive health coverage, access to a wide network of healthcare providers, and the ability to tailor health plans to individual needs. Federal employees benefit from competitive premiums and the assurance of continued coverage into retirement, provided they meet certain criteria. Additionally, the program offers protections such as no pre-existing condition exclusions and coverage for preventive services, making it an attractive option for federal employees seeking robust health insurance coverage.

Eligible for Coverage Under Federal Employee Health Benefits

Eligible for FEHB Coverage

Eligibility for the FEHB Program is primarily determined by employment status. Most federal employees, including those in permanent positions and certain temporary and part-time roles, are eligible to enroll in the program. Eligibility to enroll is contingent upon the employee’s appointment type and work schedule. It is important for employees to consult the FEHB Handbook or their human resources office to verify their eligibility for coverage under the insurance program. Once an employee enrolled in FEHB, they are eligible to elect their FEHB health coverage for themselves and also an eligible family member. 

Family Member Eligibility for FEHB and Entitlement to Benefits

Family member eligibility under the FEHB Program extends to spouses and children under the age 26. Eligible family members can be covered under the employee’s health plan, providing comprehensive health benefits to the entire family. In certain circumstances, other dependents may also qualify for coverage. Employees should also verify their spouse’s eligibility and ensure that all eligible family members are included in their health benefits enrollment. You can also verify your spouse’s eligibility online. 

Available Plans Under the FEHB Program and FEHB Enrollment

Types of FEHB Plans Offered

The FEHB Program offers a diverse range of health plans to accommodate the varying needs of federal employees. These include fee-for-service plans, HMOs, and high-deductible health plans with health savings accounts. Each type of plan offers different levels of coverage, provider networks, and cost-sharing arrangements. Employees should evaluate the options available to them and consider factors such as premium costs, coverage benefits, and provider access when selecting a health plan.

Comparing Different FEHB Health Plans

Comparing FEHB health plans is an essential step in choosing the right coverage. Employees should assess the benefits, costs, and provider networks of each plan to determine which best meets their needs. Tools and resources provided by the OPM can assist in this comparison, allowing employees to make informed decisions. Understanding the nuances of each plan, such as out-of-pocket costs and coverage limits, is crucial for selecting a plan that offers the best value and meets individual health care needs.

Steps to Enroll in FEHB and FEHB Open Season

Enrolling in the FEHB Program involves several key steps. Employees must first review the available health plans and select one that meets their needs. Enrollment typically occurs during the annual open season, but employees can also enroll or make changes following a qualifying life event. The enrollment process requires completing the necessary forms and submitting them to the appropriate federal agency. Employees should ensure that all information is accurate to avoid any issues with their health benefits enrollment. Once the employee meets the eligibility requirements, the employee can enroll in a health benefits plan. They can adjust their FEHB coverage during open season or a qualifying life event such as the birth of a child.