Federal Employee Health Insurance
The Federal Employees Health Benefits (FEHB) program is designed to help protect federal employees and eligible family members from the expenses of illness and accident. Through FEHB, federal employees can get comprehensive health insurance coverage.
Unlike many private sector health benefit plans, FEHB provides coverage without physical examination, places no restrictions on age or physical condition, offers a wide range of health insurance plans to choose from and cannot be canceled by the plan in which you enroll.
It is a voluntary program open to nearly all employees of the federal government. The exceptions mainly involve temporary, seasonal and intermittent employees. They are eligible only under certain circumstances, primarily an expectation of employment averaging 130 hours per month for at least 90 days.
Self Only, Self Plus One, Self and Family
The three levels of FEHB are self only, which provides benefits only to the enrollee; self plus one, which provides benefits to the enrollee and one eligible family member; and self and family, providing benefits to the enrollee and all eligible family members. These enrollment levels may be changed during an open season, or outside of an open season due to certain life events as described below, so long as the change is consistent with the event.
An enrollee with more than one eligible family member may enroll in self plus one and would have to designate the second person to have coverage, but that would mean that any other family member would have to get health coverage elsewhere.
Also, the second person can be changed during an open season or due to certain life events, although also only if consistent with the event. For example, an enrollee with a spouse and one eligible child and who is insuring only the child could switch coverage to the spouse if the child hits the age 26 cutoff for coverage. (Note: The carrier may request documentation to prove the eligibility of the newly designated family member.) However, if a childless couple has or adopts a child, the enrollee could not switch coverage from the spouse to the child—although in that case the enrollee could switch to family coverage.
Choosing the self only option isn’t just for someone who is either unmarried and/or has no eligible children. It’s also an option for married couples. In some cases both work for the federal government and have an entitlement to enroll in the FEHB program on their own. One attraction of having separate coverage is that it allows each of them to tailor their plan selection to their specific needs.
Another is that there are times when the premium cost of two self only enrollments will be less than that for one self plus one or one self and family enrollment. However, keep in mind that each enrollee will have to meet the co-insurance and deductible requirement plus the catastrophic limit on his or her own. Also, one of the enrollees would have to elect a self plus one or self and family plan to obtain coverage for any eligible child or children.
There are also situations where one of the spouses has a job outside the federal government and where coverage is provided at little or no cost, at least for self-only enrollment. In such cases it might make sense to have two self-only plans—or, if there is one eligible child, one self-only and one self plus one enrollment.
However, it’s not uncommon for employees retiring from non-federal jobs to lose their health benefits coverage or have it substantially reduced. It also happens when they get laid off. Also, while it’s easy to switch to self plus one or to self and family coverage during an open season, it would be impossible if you were to die before doing so. If that happened, your widow(er) (and children, if any) wouldn’t be eligible for FEHB coverage.
Another possibility is for the federal spouse to be covered under the non-federal spouse’s plan and not enroll in the FEHB at all. If that non-federal coverage were to suddenly end, both could be left without health insurance, although possibly with rights for temporary continuation with no employer share of the premium. If you were a federal employee, you could enroll during the next open season; but even if you did so, in most cases you’d have to be enrolled in the FEHB program for the five consecutive years before you retired to be eligible to carry that coverage into retirement. If you were a retiree when that non-federal coverage ended, you wouldn’t be eligible to enroll in the FEHB program.
Note: A court order such as a divorce decree could impact an enrollee’s freedom of choice among the options by mandating coverage for a child/children, and potentially also the choice of plans if the enrollee lives in a different area than the child/children.
Carrying FEHB coverage into retirement
Employees who have been covered by the FEHB for at least the five years before retirement (or from their first opportunity to enroll, if after) can carry coverage into retirement and continue it as long as they don’t cancel it. Waivers of this five-year coverage requirement are allowed in limited circumstances.
Premiums, deductibles, copayments, and coinsurance amounts vary across plans. Many plans offer two or more options with different premiums and levels of coverage. Even within individual plans, enrollees may be offered a lower deductible and coinsurance amount if they choose to use services, such as a physician or hospital provider, in the plan’s network.
All plans cover hospital, surgical, physician, and emergency care within guidelines set by OPM. OPM also requires plans to cover certain special benefits including prescription drugs (which may have separate deductibles and coinsurance); mental health care with parity of coverage for mental health and general medical care coverage; child immunizations; and limits on an enrollee’s total out-of-pocket costs for a year, called the catastrophic limit. Plans have leeway to determine exact terms within the general guidance.
FEHB follows the guidelines on preventive care for children recommended by the American Academy of Pediatrics. FEHB guidelines on preventive care for adults are based on accepted medical practice, and all FEHB plans cover certain preventive care services without imposing cost sharing requirements. Additionally, all plans offer tobacco cessation benefits under Public Health Service guidelines.
Generally, once an enrollee’s covered out-of-pocket expenditures reach a “catastrophic limit,” the plan pays 100 percent of covered medical expenses for the remainder of the year. Plans must also include certain cost-containment provisions, such as offering preferred provider organization networks in fee-for-service plans and requiring hospital pre-admission certification.
Other FEHB-eligible persons can voluntarily switch to the exchanges but there are several strong reasons not to: they would lose the employer contribution toward premiums; they would have to pay premiums with after-tax money; they would not be eligible for FEHB in retirement unless they were covered by it for the five years leading up to retirement; and if they died while an active employee, their survivors would not be eligible for FEHB coverage even if they would be eligible for survivor annuities.
All FEHB plans qualify as providing the level of coverage needed to avoid the tax penalties under the law for those who do not have health insurance meeting certain standards. This applies to personal enrollment and to coverage as a family member, under temporary continuation of coverage, and under former spouse eligibility. However, persons who decline FEHB and have no other qualifying health insurance are subject to the penalty.
Choosing Among Types of FEHB Plans
You can choose from among managed fee for service (FFS) plans, regardless of where you live, or plans offering a point of service (POS) product and health maintenance organizations (HMO) if you live (or sometimes if you work) within the area serviced by the plan. You will find managed care features in all the plans. Common features of managed care are pre-approval of hospital stays, the use of primary care providers as “gatekeepers” to coordinate your medical care, and networks of physicians and other providers.
In prepaid plans, your covered health services are pre-funded by your premium and the government’s contribution toward the cost of your health insurance. Generally you must use specified plan physicians, hospitals and other providers at designated locations, although care elsewhere may be available after a referral.
FFS plans reimburse you or your physician or hospital for covered services rather than provide or arrange for services as prepaid plans do. FFS plans allow you to choose your own physicians, hospitals and other health care providers without a referral. Some are open to all enrollees, but others require that you join the organization that sponsors the plan. Some plans limit enrollment to certain employee groups.
A plan offering a point of service product has rules about doctor choice and access to specialists, but you can choose any doctor you like and see specialists without referrals if you agree to pay more. Membership requirements and/or limitations also apply to any POS product the FFS plan may be offering.
There are two other major variants. In “consumer-driven” options, enrollees get a sum of money to pay toward health costs, then pay a deductible, and then have standard fee-for-service or HMO coverage. In “high-deductible health plans,” enrollees have a tax-favored account—typically, a health savings account for those not eligible to draw Medicare benefits, and a health reimbursement arrangement for those who are—that can be used to pay the deductible and certain other qualifying health expenses.
In addition, Medicare-sponsored coordinated care plans are an option for anyone who is age 65 or older. These plans generally are prepaid plans. If you join such a plan, you may suspend your FEHB enrollment and later reenroll in the FEHB program. Ask your local Social Security office for the names of the MCCPs in your area.
Coverage of family members
Eligible family members are your spouse and your children under age 26 (health benefits can continue after the age cutoff if the person is incapable of self-support because of a disability incurred before the cutoff), including your legally adopted children, recognized children born out of wedlock, and, under certain circumstances, foster children.
Children may remain covered up to age 26 even if they are eligible for employer-sponsored health insurance on their own; if they have such insurance, FEHB becomes the secondary payer. Coverage for married children does not extend to their spouses or to their own children.
Note: Children under age 26 who are federal employees themselves are covered under a parent’s FEHB family policy unless the parent is in a health maintenance organization plan and the child lives outside its coverage area, or unless the child has a spouse and/or child or children of his or her own for whom the child wishes to get coverage. Unless one of those exceptions applies, a child is covered by a parent’s family coverage and cannot enroll in FEHB on his or her own account until turning age 26, at which point enrollment will be allowed, even outside an open season, as a qualifying life event.
A covered stepchild remains eligible after a divorce, end of a domestic partnership, or the death of the spouse or partner if the child continues to live with the enrollee in a parent-child relationship.
To be eligible, a foster child must live with you as the sponsor in a parent-child relationship, you must be the primary source of support for the child and you must expect to raise the child to adulthood. You must sign a certification that the foster child meets those requirements.
Other relatives, such as parents or a grandchild (unless the grandchild qualifies as a foster child), are not eligible for coverage as family members even if they live with and are dependent on you.
Your spouse will lose eligibility for coverage upon divorce or annulment of the marriage, unless made eligible under a court order. A child loses eligibility on hitting age 26, unless disabled as described above.
Note: Under certain circumstances voluntary removal from coverage of an eligible family member is allowed, primarily so that the family member may enroll in health insurance sponsored by his or her own employer. With the consent of both spouses, an enrollee may drop a covered spouse. Similarly, an enrollee may drop an eligible child who is past the age of majority in the jurisdiction of the child’s residence by providing proof that the child is no longer a dependent; the child also can request to be dropped on providing such proof. (Minor children may be dropped only under a court order.) In such situations the enrollee may downgrade to a less expensive type of enrollment, for example from family coverage to self plus one or from self plus one to self-only.