Many federal retirees say their FEHB coverage is worth as much as the pension itself. You can keep it for life, with the government still paying its share of the premium, but only if you meet the five-year rule when your annuity starts. Miss it and the coverage ends at retirement, usually for good.

The rule in one sentence

To carry FEHB into retirement you must retire on an immediate annuity and have been continuously enrolled in FEHB for the five years right before your annuity starts. If you've had fewer than five years of eligibility in your career, you need coverage for all of the time since your first opportunity to enroll.

FEGLI life insurance works the same way: five years of coverage right before retirement, or since your first opportunity, for each option you want to keep. You choose those options on SF 2818.

What counts toward the five years

  • Any FEHB plan. You can switch plans or options during Open Season without breaking continuity, as long as you're always enrolled.
  • Coverage as a family member. Time covered under your spouse's FEHB family enrollment counts. If your spouse is also federal and you're on their self-and-family plan, those years count for you.
  • TRICARE and CHAMPVA. Time under TRICARE (including military coverage) or CHAMPVA can count, but only if you're enrolled in FEHB at the time you retire. Plenty of veterans drop FEHB during their federal career because TRICARE covers them. Re-enroll in FEHB before you retire, even for a short time, or the TRICARE years won't help.

What doesn't count: Medicare, private insurance and marketplace plans. A real break in FEHB enrollment, rather than a plan switch, generally restarts the five-year clock.

Waivers are rare

OPM can waive the five-year requirement only in exceptional circumstances, when denying coverage would be against equity and good conscience. Some agencies have also been given authority to waive the rule for employees taking early retirement during a reorganization or reduction in force. Don't plan around a waiver. If you might be short, ask HR in writing well before your date.

Immediate, postponed and deferred annuities

This is where early-out choices matter most:

  • Immediate annuity (optional retirement, VERA, disability, or MRA+10 started right away): FEHB continues if you meet the five-year rule.
  • Postponed MRA+10: if you separate at or after your MRA with 10+ years and delay the annuity to shrink the age reduction, your FEHB is suspended during the wait. You can re-enroll when the annuity starts, provided you met the five-year rule when you separated.
  • Deferred annuity (you leave before you're eligible to retire, for example with a VSIP or a deferred resignation, and your pension starts later): FEHB does not continue and can't be restored when the deferred annuity begins.

Survivors and your election

If your spouse is covered under your self-and-family FEHB enrollment, they can keep FEHB after your death only if they're entitled to a survivor annuity. Electing no survivor annuity, or a very small one, can cost your spouse their health coverage. Even a partial survivor election keeps the door open. Weigh this when you compare survivor options on the Pension page.

A quick self-check

  1. Have I been in FEHB, under my own enrollment or a family member's, every day for the last five years?
  2. If I've relied on TRICARE, will I be enrolled in FEHB on my retirement date?
  3. Is my planned exit an immediate, postponed or deferred annuity?
  4. Will my survivor election protect my spouse's coverage?

Put these on your Retirement Checklist and confirm the answers with HR. It's one of the few retirement mistakes that can't be fixed afterward.