The Federal "Five-Year Requirement" and Your Federal Health and Life Insurance
By John Grobe
Thursday, October 23, 2008
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.
- 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. 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.
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. That means that if you enrolled in or changed your insurance four years ago, you have to wait another two years to meet the five-year requirement. When does 6 = 5? When FEGLI is involved.
OPM has not announced the next FEGLI open season, but I would expect that there would be one in 2009, with changes effective in 2010. You may cancel or drop your FEGLI at any time. Open seasons are only necessary for enrolling or increasing your level of 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. For example, if you had option B coverage of 2X your salary and changed to 3X your salary in the most recent open season, you would have to wait until after September 4, 2010 to retire in order to carry the 3X coverage into retirement.
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