What happens to your Federal Employees Health Benefits program coverage if you accept an early retirement offer? It all depends.
The law originally stated that an employee had to be enrolled in the FEHB program for the five years of service immediately before retirement or from that employee’s first opportunity to enroll. Later Congress granted the Office of Personnel Management limited authority to waive the five-year requirement, and only where it would be against equity and good conscience not to do so.
The requirement then was broadened so that OPM can pre-approve waivers for employees retiring under the Voluntary Separation Incentive Payments and/or the Voluntary Early Retirement Authority. Furthermore, it can pre-approve waivers of the five-year participation requirement.
To be granted such a waiver, you must meet certain criteria. If you are non-Department of Defense employee, you must have been:
- covered under the FEHB program continuously since the beginning date of your agency’s latest statutory VSIP authority or OPM-approved VSIP or VERA authority; and
- retire during the statutory VSIP or OPM-approved VSIP or VERA period; and
- receive a VSIP; or
- take early optional retirement; or
- take a discontinued service retirement based on an involuntary separation due to reduction in force, directed reassignment, reclassification to a lower grade or abolishment of position.
Under OPM’s pre-approval process, you won’t need to request a waiver if you meet the above requirements. Instead your agency will attach a memorandum to your retirement application proving that you meet the requirements. If you are a DoD employee, the rules are slightly different. OPM will grant pre-approved waiver if you:
- have been covered under the FEHB program continuously since October 1 of a given fiscal year; and
- retire during a DoD VSIP/VERA period; and
- receive a VSIP; or
- take early optional retirement; or
- take a discontinued service retirement based on an involuntary separation due to reduction in force, directed reassignment, reclassification to a lower grade, or abolishment of position.
As is true for non-DoD employees, your agency will attach a memorandum demonstrating that the criteria for your waiver have been met.
Even with these new flexibilities in place, some employees may not be eligible for a pre-approved waiver. For example, if you simply plan to retire after meeting the age and service requirements to do that. Even if you don’t qualify for an automatic waiver, you may still request an individual waiver from OPM. Such requests will be judged on a case-by-case basis and decided on their merits.
If you are ask OPM for a waiver, you’ll need to supply the following information:
- an explanation of why you believe OPM should consider granting a waiver;
- your health benefits enrollment forms (SF 2809s and SF 2810s) or electronic enrollment verification;
- a record of your service history (SF 2901-1 for CSRS or SF 3107-1 for FERS);
- proof of your coverage under CHAMPUS/TRICARE (if applicable);
- the exact date you plan to retire;
- any medical condition you or a family member may have is a factor in your decision to retire.
Your request and associated documentation should be sent to: U.S. Office of Personnel Management, Retirement Benefits Branch, 1900 E Street, NW, Washington, DC 20415-3532.
Although your request for an OPM waiver should be sent well in advance, OPM won’t make a decision any earlier than three months before your planned retirement date.
