Advice for Persons Who Pay Full FEHB Premiums

The FEHB program also provides coverage for former spouses, former employees, children turning age 26, and others. In each of these cases, the covered enrollee must pay the full premium without government contribution. This rarely results in a better price than is available under marketplace insurance offered under the Affordable Care Act. In almost all cases, therefore, a marketplace exchange option is worth considering and for those eligible for premium tax subsidies will usually be a better buy than remaining in the FEHB and paying full premiums. For those over age 65, almost all Medicare Advantage plans will be far better than paying full FEHB premiums.

Persons eligible for continuing FEHB coverage for as long as needed include: 

  • Those former spouses who have a qualifying court order and meet other conditions. They may enroll in any plan on the same basis as employees and annuitants, except for premiums. 
  • Temporary employees who have worked for one full year also may enroll on the same basis as employees, except for premium cost. (Such employees should switch to permanent employment if possible, to reduce premium costs by three-fourths.) 

Time-limited coverage is also available for several other categories of persons. They pay a small surcharge—two percent of the premium—and are eligible only for a limited time: 

  • Employees separating from Federal service for any reason may continue their FEHB coverage for 18 months.  
  • Children reaching age 26 are, unless severely handicapped, no longer eligible for coverage under their parents' family plan. They may obtain coverage in their own name for 36 months.  
  • Former spouses without a qualifying court order also may enroll for 36 months. 

Almost all persons in these categories will find marketplace exchange (or Medicare Advantage) coverage considerably less expensive even in these situations. For all purposes except premium contribution, tax shelter, and time limit, those who do remain under FEHB are treated like regular enrollees. For example, there is no disqualification for preexisting conditions. There is a 60-day time limit for applying after the qualifying event, but once enrolled a person may switch plans in the next Open Season just like any employee or annuitant. At the end of the temporary period, these persons may switch to a "conversion" plan that is not part of the FEHB program and is sold at individual rather than group rates. However, the costs and coverages of these conversion plans are generally far worse than one can get by shopping on the private market. Some young adults will not have a parent with a family plan or will become ineligible for family coverage upon reaching age 26. You can usually (but not always) get better deals from Medicare Advantage plans (if aged 65 or over) or marketplace exchange plans (if under 65) than you would from paying the full premium for an FEHB plan. 

For persons who pay full premiums, we compare plans based on paying both the government and employee share. Although some of these persons must pay a two percent surcharge, we have omitted this factor. Under any of the less-costly plans, the surcharge would be under $100 per year for singles and $200 per year for families. These comparisons do not include premium tax savings because persons who are not current employees are not eligible for this benefit.

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