Keeping FEHB in retirement (the 5-year rule)
FEHB is one of the most valuable federal benefits — a guaranteed source of health coverage that does not require employer sponsorship in retirement. To carry it, you must have been continuously enrolled for the five years immediately before your retirement date, or since you first became eligible if that was less than five years ago. Retirement must be on an immediate annuity; deferred retirees who separate and defer their annuity to a later date are not eligible.
What retirees pay
Federal retirees pay the same enrollee share as active employees. The government continues paying its share — roughly 70–72% of the premium for most plans. Retirees are charged the same premium rates as active employees in the same plan, regardless of age or health status. This is a significant advantage over marketplace insurance, where age-rated premiums for a 60-year-old can be three to five times higher than for a 30-year-old.
Projecting premiums over a long retirement
The compounding effect of premium inflation is the number most federal retirees do not plan for. FEHB annuitant premiums have seen significant increases in recent years — some plans 12–13% annually. Even at a conservative 7% annual increase, a $3,600/year premium today becomes approximately $6,600 by year 10 and over $13,700 by year 25. The cumulative cost over a 25-year retirement can easily exceed $200,000 for a self-only plan.
FEHB and Medicare at 65
At 65, federal retirees become eligible for Medicare. Medicare Part A (hospital coverage) is generally free if you paid into Social Security or FICA during your career. Medicare Part B (medical coverage) carries a premium (standard $185.50/month in 2026, higher for high earners via IRMAA). Many FEHB plans coordinate with Medicare Part B to significantly reduce out-of-pocket costs and may even waive deductibles and copays for Part B enrollees. This projection covers only the FEHB premium — model Part B separately as a cost that begins at 65.
Read the full guide
FEHB in Retirement: What Changes, What Doesn't, and What Most People Get Wrong →
The five-year rule, how Medicare coordinates at 65, and the most expensive mistakes federal retirees make.