FEHB Guide 2026

The Federal Employees Health Benefits (FEHB) program is the health insurance system for federal employees, retirees, and their families. It's one of the largest employer-sponsored health insurance programs in the world, covering over 8 million people.

Key benefits of FEHB:

• Portability: Coverage continues into retirement if you meet the 5-year rule
• Choice: Hundreds of plans from national carriers and local HMOs
• No pre-existing condition exclusions: All plans accept all enrollees
• Family coverage: Self Only, Self Plus One, or Self and Family options

FEHB offers three enrollment options based on who you need to cover:

The government pays a substantial portion of your FEHB premium. Here's how it works:

For active employees: Premiums are deducted pre-tax from your paycheck, reducing your taxable income.

For retirees: Premiums are deducted from your pension. You pay the same percentage as active employees, but high-premium plans can cost more because of the contribution cap.

FEHB Open Season runs from mid-November through mid-December each year. During this time, you can enroll, change plans, or cancel coverage. Changes take effect January 1.

How to Choose the Right Plan

1. Estimate your healthcare needs: How often do you see doctors? Take medications? Expect any procedures?
2. Check network coverage: Make sure your preferred doctors and hospitals are in-network
3. Compare total costs: Premium + deductible + copays + coinsurance = total annual cost
4. Consider prescription coverage: If you take expensive medications, check the drug formulary
5. Plan for retirement: If retiring soon, compare retiree costs, not just active employee costs

The 5-Year Rule

To continue FEHB into retirement, you must be enrolled in FEHB for the 5 consecutive years immediately before retirement. This is non-negotiable. If you have a break in coverage or weren't enrolled, you lose FEHB eligibility at retirement.

Retiree Costs

Retirees pay the same percentage as active employees. However, the government contribution is capped at the maximum amounts (see table above). If you have a high-premium plan, your share will be higher as a retiree.

Pro tip: Before retirement, compare what you pay NOW vs what you'll pay as a retiree for your current plan. Consider switching to a lower-cost plan if the difference is significant.

At age 65, you become eligible for Medicare. You can keep FEHB, enroll in Medicare, or have both. Here's what to know:

Keeping FEHB Only

You're NOT required to enroll in Medicare. FEHB alone provides comprehensive coverage. However, you'll miss out on Medicare Part A (hospital), which is premium-free if you have enough Social Security credits.

FEHB + Medicare Together

Many retirees keep both. Medicare becomes primary (pays first), FEHB becomes secondary (pays remaining costs). This combination often results in very low out-of-pocket costs.

• Medicare Part A (Hospital): Usually free. Enroll at 65 even if keeping FEHB.
• Medicare Part B (Medical): Monthly premium (~$185/month in 2026). Optional if you have FEHB.
• Medicare Part D (Drugs): Usually NOT needed if you have FEHB with drug coverage.