
For retirees, FEHB rates can be a complex topic, but understanding the basics can make a big difference in planning for healthcare costs in retirement.
The FEHB program offers a wide range of health insurance plans, with premiums varying depending on the plan and location.
Retirees can choose from several premium payment options, including paying the full premium, paying a portion of the premium, or having the premium deducted from their annuity payment.
Some retirees may be eligible for a 90% subsidy of their FEHB premium, which can help make healthcare costs more manageable.
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Understanding FEHB Premiums
FEHB premiums are deducted from your retirement paycheck.
The premium amount varies depending on the health insurance plan you choose.
For example, the cost of the Blue Cross Blue Shield Standard Option plan is $1,000 per year for a retiree with self-only coverage.
You can also choose to pay a higher premium to have a lower deductible.
For instance, the Blue Cross Blue Shield Basic Option plan has a $0 deductible, but the premium is $1,400 per year for a retiree with self-only coverage.
You should review your budget and financial situation before choosing a plan.
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FEHB Benefits in Retirement

You can keep your FEHB benefits in retirement, but you must be currently enrolled in the program and have been enrolled for the full five years preceding your retirement.
In retirement, you pay the same healthcare premiums through the FEHB program as you would when you were a full-time employee of the government.
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Striking a Balance
Striking a balance between Medicare and FEHB coverage is a common strategy for retirees.
By enrolling in Medicare Parts A and B as primary insurance, you can reduce your out-of-pocket premiums and maximize the benefits of both healthcare vehicles during retirement.
You don't have to fully cancel your FEHB coverage if you choose to enroll in Medicare.
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Can You Keep FEHB Benefits in Retirement
You can keep FEHB benefits in retirement, but you must be currently enrolled in the program and have been enrolled for the full five years preceding your retirement.
The good news is that you don't have to worry about losing your healthcare coverage once you retire. Federal employees are entitled to keep FEHB coverage even after retirement.

You'll pay the same healthcare premiums through the FEHB program in retirement as you did while working for the government. This means you won't see a significant increase in costs after you retire.
Your premiums will simply be paid monthly after you retire, instead of biweekly as they were when you were paying through your paycheck during employment.
FEHB Rating Plans
The FEHB program offers 12 different rating plans for enrollees. The Standard Option is the most popular plan, covering 80% of medical expenses and requiring the enrollee to pay 20%.
The Standard Option has a $6,000 annual out-of-pocket maximum. This means that once you've reached this amount, the plan pays 100% of your medical expenses for the rest of the year.
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Frequently Asked Questions
Will 2024 FEHB premiums increase for retirees?
Yes, 2024 FEHB premiums are expected to increase, with an average rate of 5.8% for the program. This increase is lower than some other large employers, but higher than the 10.77% average increase for California state employees.
Is FEHB in retirement worth it?
Having both Medicare and FEHB in retirement can provide significant wrap-around benefits, minimizing out-of-pocket expenses. Consider staying on your FEHB plan for a lifetime of coverage
Why is federal employee health insurance so expensive for retirees?
Federal employee health insurance is expensive for retirees because it covers people up to age 80, who pay the same premium as younger enrollees. This age-based pricing structure contributes to the higher costs for retirees.
Sources
- https://help.checkbook.org/article/22-why-fehb-premiums-vary
- https://www.planwellfp.com/fehb-federal-employee-health-benefits-and-medicare/
- https://www.secretservice.gov/employee-support/benefits/health-insurance
- https://www.minervaplanninggroup.com/2022/05/01/do-government-employees-receive-health-insurance-after-retirement/
- https://www.federalregister.gov/documents/2015/06/10/2015-14219/federal-employees-health-benefits-program-rate-setting-for-community-rated-plans
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