Insurance in Retirement

FEHB, FEGLI, Medicare, Tricare & LTC

How to keep your coverage and avoid costly mistakes

Keeping your health and life insurance into retirement is one of the most valuable — and most misunderstood — benefits of your federal career. But it's not automatic. You have to earn this benefit by following strict rules. Mess it up, and the consequences can be permanent.

This tutorial breaks it all down: the 5-year enrollment rule, protecting your spouse, Medicare decisions, FEGLI?Federal Employees' Group Life Insurance costs, Tricare coordination, and even Long-Term Care Insurance.

📅 The 5-Year Rule: The Golden Key to Retiree Insurance

If you want to carry your FEHB?Federal Employees Health Benefits (health insurance) and/or FEGLI (life insurance) into retirement, you must follow the "5-Year Rule." Here's the deal:

You must be enrolled in FEHB and/or FEGLI for the 5 full years of service immediately preceding your retirement.
This rule is iron-clad. Four years and 11 months doesn't cut it.
Any gap in coverage — like cancelling FEHB for a year, or switching to a non-federal spouse's plan — resets the clock.
It's not just "5 total years ever." It has to be the final 5 years leading up to your retirement date.

Source: U.S. Office of Personnel Management (OPM.gov), "Continuation of Health Benefits Into Retirement."

🔹 Bottom line (Opinion):

Don't drop your FEHB or FEGLI in the years leading up to retirement without understanding the consequences. It's a one-way door.

💖 Spousal Coverage: The Survivor Benefit Trap

One of the most critical — and overlooked — rules in federal retirement is what happens to your spouse's FEHB after your death. If you die and you did not elect a survivor annuity, your spouse loses FEHB coverage forever.

Even if your spouse was covered under your FEHB for 30 years, they're still working or retired themselves, or you thought they could "just continue it" — none of that matters.

🛑 If you don't give them a survivor benefit at retirement, they are permanently removed from FEHB after your death. No appeal. No fix.

Source: OPM.gov, "Information for Retirees and Survivor Annuitants."

🧑‍👧 Planning Tip (Opinion):

Even if your spouse has their own federal benefits, it's often smart to elect at least a partial survivor annuity — just to keep their FEHB option open.

🩼 Medicare & FEHB: How They Work Together

When you turn 65, the rules shift. Medicare becomes the main player, and your FEHB plays a secondary role.

Medicare Part A (Free): Covers hospital stays. Everyone gets it at 65. You should enroll in this — it's free and works with FEHB.
Medicare Part B (Monthly Premium): Covers doctor visits, specialists, preventive care. FEHB becomes secondary once you enroll in Part B. Most FEHB plans are designed to "wrap around" Medicare — covering what Medicare doesn't.

🟡 You don't have to take Part B, but if you don't, you may be stuck with copays and deductibles FEHB assumes Medicare would've paid. If you enroll late, you'll pay a permanent penalty: 10% per year you delayed. Once you enroll in Part B, most FEHB plans waive copays and deductibles.

Source: Medicare.gov, "How Medicare works with other insurance."

IRMAA: The Income Surprise

High retirement income (TSP?Thrift Savings Plan withdrawals, real estate sales, pensions) can trigger an Income-Related Monthly Adjustment Amount (IRMAA?Income-Related Monthly Adjustment Amount), which increases your Part B and Part D premiums.

Source: Social Security Administration (SSA.gov), "Medicare Premiums: Rules For Higher-Income Beneficiaries."

💡 Plan ahead (Opinion): Roth conversions, large TSP moves, or selling property can all trigger IRMAA in the following year.

🧬 Should I Drop FEHB and Just Use Medicare?

In most cases, no. This is an opinion based on common financial planning advice.

FEHB is some of the best insurance in the country
Together, Medicare + FEHB give you nearly complete coverage
FEHB often covers what Medicare doesn't (like foreign travel)
There's no need for prior authorizations, and most providers take Medicare

Some retirees do drop FEHB to save premiums, but this is usually only beneficial in specific cases (e.g., Tricare users or those on limited income with Medigap).

🧼 What About Tricare?

If you're a retired military member and eligible for Tricare, your decision path changes:

Tricare for Life (TFL?Tricare for Life) requires enrollment in Medicare Parts A & B.
TFL acts as your secondary payer to Medicare, similar to FEHB.
You can drop FEHB and just use Medicare + TFL, but you lose the right to re-enroll in FEHB later.
FEHB offers broader family coverage (if needed).

Source: TRICARE.mil, "TRICARE For Life."

📅 Many military retirees (Opinion): keep both FEHB and Tricare until they're confident in their coverage needs.

🛂 Self Plus One vs Self and Family (FEHB Confusion)

It's not just about who's on your plan — it's about the cost and eligibility.

Self Plus One is often cheaper than Family, but not always
Only one family member is eligible under Plus One
If you have more (e.g., adult children or stepchildren), choose Family
If a covered dependent turns 26, they age out. Plan accordingly.

🤔 Don't just go with what you've always had (Opinion).

Run the numbers during Open Season.

📊 FEHB Open Season After Retirement

You can still switch FEHB plans every year during Open Season. You're not locked in for life.

You can go from PPO to HMO, raise or lower your premiums
This is a great option if your health status or location changes

Source: OPM.gov, "FEHB Open Season."

📈 What If You Delay Part B Because You're Still Working?

If you're working at 65 with FEHB, you can delay Part B without penalty. Once you retire, you have an 8-month Special Enrollment Period to enroll without late penalties.

Source: Medicare.gov, "I have employer coverage."

📅 Planning Tip (Opinion): Mark your calendar. If you miss the 8-month window, the late penalty is permanent.

🧲 FEGLI in Retirement: Worth It or Wasteful?

Basic FEGLI

With the 75% reduction option, it becomes free in retirement, but your coverage slowly drops to 25% of its pre-retirement value. For 50% or No Reduction, you continue to pay premiums.

Option A, B, and C (Extra Coverage)

Premiums jump dramatically as you age. Many retirees (opinion) drop Option B and C by age 70 to avoid sky-high costs.

Source: OPM.gov, "FEGLI Handbook."

🤔 Tip (Opinion): Consider converting part of your FEGLI to private term or whole life before retirement if you're healthy.

🪒 Long-Term Care Insurance (FLTCIP)

This is not part of FEHB or FEGLI, but many feds overlook it entirely. The Federal Long Term Care Insurance Program (FLTCIP?Federal Long Term Care Insurance Program) offers optional coverage that helps pay for home health aides, nursing homes, and assisted living.

You must apply and be approved
Premiums are based on age and coverage level

Source: LTCFEDS.com (the official FLTCIP website).

Why consider it? (Opinion)

FEHB and Medicare do not cover long-term custodial care. A single stroke, dementia diagnosis, or fall can wipe out retirement savings.

Downside (Fact/Opinion)

FLTCIP premiums have risen steeply in the past (Fact). Private LTC?Long-Term Care insurance may offer better rates for some (Opinion).

🔍 Final Tips and Common Pitfalls (Summary & Opinion)

❌ Don't waive FEHB during your last 5 years of service.
🔢 Keep documentation showing continuous enrollment.
❤️ Elect a survivor annuity if your spouse needs FEHB.
🧵 Review your FEGLI. Most feds keep more than they need.
💼 Coordinate Medicare enrollment carefully. Don't get penalized.
🫶 Consider LTC insurance as a safety net against the biggest retirement risk: needing care.

Next Steps in Your Journey

Now that you understand insurance in retirement, here are your next learning modules: