The Five Year Requirement Under FEHB
by John Grobe |
With Federal Employees Health Benefit (FEHB) open season approaching in November, it might be helpful to take a look at the “five-year requirement”. While we’re at it, we’ll look at how the five-year requirement applies to your Federal Employees Group Life Insurance (FEGLI).
Most federal employees are aware that, in order to carry your FEHB into retirement, you have to have been enrolled for the five-year period immediately preceding retirement (with few exceptions). There is generally a great advantage in being able to carry your FEHB into retirement. Uncle continues paying his share for as long as you remain enrolled.
A few things of which you should be aware are:
- The five years refers to enrollment in the program. You do not have to remain in the same plan for five years.
- The five years refers to your enrollment. Your spouse does not have to be enrolled for the five years immediately preceding your retirement in order to be covered. You can bring your spouse on your insurance at any time before retirement, or even after retirement. Do be aware that if you die after retirement but before bringing your spouse on your FEHB, your spouse will not be able to continue FEHB, even if you have elected a survivor annuity.
- If you are enrolled as a family member on the FEHB policy of your spouse, that counts towards the five-year period the same as if you were enrolled on your own.
- Tricare is viewed as equivalent to FEHB, and time spent on Tricare counts towards the five years as long as you are covered by FEHB when you retire.
- A major exception to the five-year rule is in the case of a reduction-in-force. OPM routinely waives the five-year requirement in the result of RIFs.
- Another exception is for a former federal employee who returns to federal employment. As long as they sign up for FEHB immediately upon their return, they do not have to have it for five years. For example, if an employee returned to federal employment in January 2010 and retired in December 2012, they could carry their FEHB into retirement if they enrolled in FEHB when they were re-employed.
FEGLI has the same five-year requirement, but there are a few differences between FEGLI and FEHB. First, FEGLI open seasons are not regularly scheduled. In fact, the last FEGLI open season was in 2004 and the changes that were made in that open season were not effective until September 4, 2005. OPM has not announced the next FEGLI open season, and passed on a chance to run an open season in late 2011. Open seasons usually occur when there are changes in insurance or premiums. Premiums changed on January 1, 2012, but OPM elected not to run an open season at that time.
You do not need an open season to cancel or drop your FEGLI; you may do that at any time. You may also enroll or increase your coverage due to a qualifying life event (e.g., marriage, divorce, death of a spouse, birth of a child, etc.), or by providing medical evidence of insurability as long as at least one year has passed since you waived your FEGLI coverage.
FEGLI options B and C also have options regarding the level of coverage. In option B you may have multiples of 1 to 5 times your salary, and in option C you may have options of 1 to 5 times the amounts of $5,000 for a spouse and $2,500 for a child. If you have options B and C when retiring, you can only carry over the lowest level of multiples you had during the last five years.
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