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Insurance Services Programs

FEHB Handbook

Annuitants and Compensationers
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ELIGIBILITY FOR HEALTH BENEFITS AFTER RETIREMENT Continued

At retirement, your employing office will tentatively determine if you are eligible to continue your enrollment. OPM's Office of Retirement Programs (or your retirement system) will review your retirement and health benefits documents and make a final determination of your eligibility to continue your FEHB enrollment into retirement.

Waiver of 5-Year Enrollment Requirement

Public Law 99-251 gave OPM the authority to waive the 5 years of service requirement when, in its sole discretion, it determines that it would be against equity and good conscience not to allow a person to be enrolled in the FEHB Program as an annuitant.

Your failure to satisfy the 5-year requirement must be due to exceptional circumstances. If you request a waiver, you must provide OPM with evidence that:

you had intended to have FEHB coverage as a retiree;
the circumstances that prevented you from meeting the 5-year requirement were essentially outside your control; and
you acted reasonably to protect your right to continue FEHB coverage into retirement. (This includes reading and acting on information provided and requesting information if none is given automatically.)

How OPM Applies Its Waiver Authority

OPM's approval of your waiver request depends on the extent to which you could have controlled the events leading to the loss of coverage at retirement. When OPM reviews a waiver request, it considers:

whether you had a compelling reason to believe you were covered as a family member of another person enrolled in FEHB during the time in question;
evidence that your employing office would not allow you to enroll;
the extent to which you could have controlled the events that led up to the loss of the right to continued FEHB coverage;
whether you had acted to gain FEHB coverage at the earliest opportunity after learning of the loss of benefits or possible loss of future rights;
whether you had substantial FEHB coverage during your career even though there was a break in continuity during the last 5 years of service.

OPM would approve these types of waiver requests:

Examples

Sean drops coverage in the FEHB Program for a period of time, but reenrolls later. He is later forced to retire because of a disability before meeting the 5-year participation requirement. (Employees who retire voluntarily although they have a medical condition that would make them eligible for disability retirement are considered as disability retirees for the purpose of granting waivers.)

Lilly does not meet the participation requirement, but had been covered under FEHB for a substantial number of years during her career, including 3 years immediately before retirement. She is forced to retire because of an involuntary separation.

Jill had a break in coverage during the 5 years of service immediately before retirement because her Federally employed spouse changed from a Self and Family enrollment to a Self Only enrollment without telling her. She enrolled at the first opportunity after learning of the loss of coverage.

When OPM Does Not Grant a Waiver

OPM generally doesn't grant a waiver if it is within your control to complete the eligibility requirements for continued coverage. In the case of a voluntary early retirement, you can choose instead to remain in Federal service to complete the eligibility requirements. In this case, you generally can't qualify for a waiver unless some circumstance other than an early retirement makes it impossible to complete the participation requirement (but see "Current Waiver Policy" for exceptions).

OPM generally wouldn't approve these types of waiver requests:

Examples

Keesha loses non-Federal coverage, enrolls for FEHB at the earliest opportunity thereafter, and then retires voluntarily before meeting the participation requirement.

Jim does not meet the 5-year participation requirement. Although his employing office didn't specifically inform him that FEHB coverage wouldn't continue after retirement, it did prepare a Notice of Change in Health Benefit Enrollment (SF 2810) terminating his enrollment at retirement.

Sara doesn't meet the 5-year participation requirement and retires under an early optional retirement authority.

Robert claims to be unaware of the 5-year participation requirement.

Where to Send a Waiver Request

If you are a retiring employee and want to ask OPM to waive the participation requirement in your case, you should send your waiver request to: Office of Personnel Management, Retirement Benefits Branch, 1900 E Street, NW, Washington, D.C. 20415-3532.

Previous Waiver Policies

Waiver Policy for Retirements on and after March 30, 1994

Public Law 103-226, the Federal Workforce Restructuring Act of 1994 (FWRA), authorized certain Federal agencies to offer voluntary separation incentive payments (VSIPs) or buyouts to their employees who retired during the period from March 30, 1994, to March 31, 1995. Congress instructed OPM to consider the widespread use of early voluntary retirement authorizations and VSIPs as exceptional circumstances that warrant the use of its waiver authority.

OPM granted a waiver to any Executive agency employee who received a VSIP during this time period (or if the employing office retained the employee due to its need, not later than March 31, 1997). During the same period, OPM also granted waivers to any employee authorized a buyout by similar legislation (such as the Department of Defense program) for the period beginning March 30, 1994 and ending at the termination of the buyout period applicable to the agency. To be eligible for a pre-approved waiver, you must have been enrolled in FEHB as of March 30, 1994.

During the same period, OPM also granted a waiver if you:

Took early optional retirement as a result of early-out authority in your agency, or
Took 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.

Waiver Policy for Retirements On and After October 1, 1996

OPM revised the waiver policy on October 1, 1996 to cover VSIPs authorized by Public Law 104-208. Under the revised policy, OPM granted a pre-approved waiver to any Executive agency employee who separated for retirement on or after October 1, 1996, who was covered under the FEHB Program on and after October 1, 1996, and who:

received a voluntary incentive payment under P.L. 104-208; or
during the statutory buyout period (October 1, 1996, through December 30, 1997), took early optional retirement as a result of early out authority in the agency; or
during the statutory buyout period (October 1, 1996, through December 30, 1997), took 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.

To the extent that these statutes allowed a postponement of your departure, if you separated after the statutory buyout period and received a buyout, you were eligible for a waiver under this policy. If you separated after the statutory buyout period and didn't receive a buyout, you weren't eligible for a waiver under this policy.

Current Waiver Policy

While Public Laws 103-226 and 104-208 authorized Government-wide voluntary separation incentive payments (VSIPs), more recently, Congress has been authorizing buyouts for individual agencies. Each agency's VSIP legislation specifies different beginning and ending dates.

OPM's current waiver policy provides pre-approved waivers for any employee who has been covered under the FEHB Program continuously since October 1, 1996, or the beginning date of an agency's latest statutory buyout authority, whichever is later.

To be eligible for a pre-approved waiver, you must:

retire during your agency's statutory buyout period; and
receive a buyout under the agency's statutory buyout authority; or
take early optional retirement as a result of early-out authority in your agency; 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.

If you meet these requirements, you do not need to write a letter requesting a waiver. Instead, your agency must attach a memorandum to your retirement application stating that you meet the requirements for a pre-approved waiver by OPM as set forth in Benefits Administration Letter (BAL) 00-220. The memorandum should provide the number of the Public Law granting your agency VSIP authority and the beginning and the ending dates of your agency's statutory buyout period.

If You Do Not Qualify for a Pre-approved Waiver

Some employees who retire during a buyout period will not be eligible for a pre-approved waiver. This includes employees who retire on a regular optional retirement but do not qualify for a VSIP.

If you do not qualify for a pre-approved waiver, you may ask OPM to waive the participation requirements in your case. OPM will consider each case on its own merits, based on the criteria that are applied to all other retiring employees. You should explain why you believe OPM should consider you for a waiver (e.g. why you are unable to meet the 5-year requirement or why meeting it would be harmful to you) and send your waiver request to the following address:

Office of Personnel Management
Office of Retirement Programs
Retirement Services Branch – Waiver Request
Washington, DC 20415-3532

When an Agency has Separate Buyout Authority

Some agencies, such as the Departments of Defense and Agriculture, have separate buyout authority. If you retired before October 1, 1996 from an agency that has separate buyout authority, your employing office should follow the waiver policy for retirements on or after March 30, 1994. If you separated for retirement on or after October 1, 1996, your employing office should follow the waiver policy for retirements on and after October 1, 1996.

QUALIFYING RETIREMENT SYSTEMS

Type of System

For FEHB purposes, you must retire under a civilian retirement system for Federal or District of Columbia Government employees.

Qualifying Systems

Civilian systems include, but are not limited to, the following:

Civil Service Retirement System (CSRS)
Federal Employees Retirement System (FERS)
Board of Governors of the Federal Reserve System
CIA Retirement System
District of Columbia Courts Judges Retirement System
Federal Judiciary Retirement System [28 U.S.C. 371(a)]
Financial Institutions Retirement Fund System
Foreign Service Pension System
Foreign Service Retirement System
Judiciary of the Territories Retirement System (28 U.S.C. 373)
Lighthouse Retirement System
Military Court of Appeals Judges Retirement System
National Oceanic and Atmospheric Administration System
Nonappropriated Fund Retirement System
Officers of the Public Health Service System
Policemen and Firemen of the District of Columbia Retirement System
Public School Teachers of the District of Columbia System
Teachers Insurance Annuity Association and Collegiate Retirement Equities Fund Retirement System
U.S. Court of Veterans Appeals Judges Retirement System
U.S. Tax Courts Judges Retirement System

For health benefits purposes, the Social Security system is not a retirement system for Federal civilian personnel.

BENEFITS AND COST

As an annuitant, you are entitled to the same benefits and Government contribution as non-Postal active employees enrolled in the same plan. Your share of the enrollment cost also continues to be the same as for a non-Postal employee and is deducted from your annuity payments.

If your annuity is not large enough to cover your share of the premiums for your plan, you may either change to a lower-cost plan or option (one in which your share of the premium is low enough to be withheld from your annuity) or choose to pay your premiums directly to your retirement system. Even if your employing office thinks that your annuity will not cover your share of the premiums, it will transfer your existing enrollment to your retirement system. Your retirement system will notify you of your options and take whatever actions you request.

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