Avoid the Repercussions of Rejecting FEHB Coverage

If you are a federal employee, you may be eligible to receive a whole slew of benefits from the first day of employment, including Federal Employee Health Benefits (FEHB) coverage. FEHB coverage is available to federal employees as an employer-sponsored plan unless otherwise excluded via regulation or law. Depending on the agency you are employed by, your overall eligibility depends on various rules. Additionally, the healthcare offered by FEHB plans does meet the minimum value standard of the Affordable Care Act (ACA). Unfortunately, the FEHB program experiences increases in premiums each year, which has many long-term employees considering dropping FEHB late in their careers.

While there are various reasons for opting for another health insurance option, including private sector employment coverage through a spouse, making such a significant change late in the game can carry consequences. The coverage set forth by an FEHB policy extends into retirement years to continue providing health benefits well after your career has come to a close. If you are entitled to retire within the civilian retirement system, a minimum of five years of continuous FEHB plan enrollment is required. In rare cases, a five-year requirement waiver may be deemed acceptable instead of continuous enrollment. Should you opt to bypass enrollment or cancel it, your signature certifies an understanding of the effect this choice will have on your coverage past retirement.

As an annuitant, should you choose to cancel your FEHB plan enrollment, your chances of re-enrollment are slim to none. The only exception would be if your cancellation or suspension were related to Medicare managed care plan (TRICARE, CHAMPVA, etc.) enrollment. Furthermore, your family will face the consequences of your choices, with complete coverage ineligibility should you convert to a private, non-group policy. Ultimately, should you be curious about whether dropping out of an FEHB program is right for you, you should avoid it altogether unless you’re confident in your ability to re-enroll in the program.

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I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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