The true value of FEHB?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Ricky6
Posts: 3
Joined: Sat Apr 03, 2021 8:13 am

The true value of FEHB?

Post by Ricky6 »

I am in my 40s after 20 years fed service. I plan to retire at 50 regardless with FERS special provision or separating early and going private. I am weighing my options for a 2nd chapter and trying to compare paths. If I sepate early I lose the lifetime FEHB. One of the catches when I’m weighing options is FEHB. All other things being equal, If I separate, how do I weigh the dollar value of FEHB from 50 until death?

FEHB has the gov paying 70 percent of premiums for life, but is similar to a Medicare supplement once you are eligible at 65. It makes for a complicated formula to determine the value, but wondering if someone had some ideas. My initial thought was from 50 to 65 it is worth 70% of my current premiums. At 65 it becomes similar in value to Medicare supplemental until death, but not sure how much that really costs.

I had a friend who valued it at $80,000 in this scenario, but I was putting it closer to $220,000+Medicare supplemental cost.

Federal friends please help!
Tdubs
Posts: 1215
Joined: Tue Apr 24, 2018 7:50 pm

Re: The true value of FEHB?

Post by Tdubs »

Ricky6 wrote: Fri May 14, 2021 4:42 pm I am in my 40s after 20 years fed service. I plan to retire at 50 regardless with FERS special provision or separating early and going private. I am weighing my options for a 2nd chapter and trying to compare paths. If I sepate early I lose the lifetime FEHB. One of the catches when I’m weighing options is FEHB. All other things being equal, If I separate, how do I weigh the dollar value of FEHB from 50 until death?

FEHB has the gov paying 70 percent of premiums for life, but is similar to a Medicare supplement once you are eligible at 65. It makes for a complicated formula to determine the value, but wondering if someone had some ideas. My initial thought was from 50 to 65 it is worth 70% of my current premiums. At 65 it becomes similar in value to Medicare supplemental until death, but not sure how much that really costs.

I had a friend who valued it at $80,000 in this scenario, but I was putting it closer to $220,000+Medicare supplemental cost.

Federal friends please help!
I'd say it is worth more at 65 than a Medicare supplement plan. There is one new plan, at least, that covers all copays and deductibles ($7 copay on generic meds) and reimburses the full amount of Medicare Part B for less than a $300/mo premium for two.
bsteiner
Posts: 5862
Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: The true value of FEHB?

Post by bsteiner »

Tdubs wrote: Fri May 14, 2021 5:41 pm ... There is one new plan, at least, that covers all copays and deductibles ($7 copay on generic meds) and reimburses the full amount of Medicare Part B for less than a $300/mo premium for two.
Which one(s)?
Tdubs
Posts: 1215
Joined: Tue Apr 24, 2018 7:50 pm

Re: The true value of FEHB?

Post by Tdubs »

bsteiner wrote: Fri May 14, 2021 6:12 pm
Tdubs wrote: Fri May 14, 2021 5:41 pm ... There is one new plan, at least, that covers all copays and deductibles ($7 copay on generic meds) and reimburses the full amount of Medicare Part B for less than a $300/mo premium for two.
Which one(s)?
https://www.uhcfeds.com. See the one called Retiree Advantage Plan for FEHBP annuitants. In my area, the monthly premium is $270/mo when the Retiree Advantage plan is paired with their Choice Plus Advanced plan. I'm not Medicare age yet, but I'm looking at this plan as a possibility.
Last edited by Tdubs on Fri May 14, 2021 7:00 pm, edited 2 times in total.
UpperNwGuy
Posts: 5437
Joined: Sun Oct 08, 2017 7:16 pm

Re: The true value of FEHB?

Post by UpperNwGuy »

Tdubs wrote: Fri May 14, 2021 5:41 pm There is one new plan, at least, that covers all copays and deductibles ($7 copay on generic meds) and reimburses the full amount of Medicare Part B for less than a $300/mo premium for two.
Details please.
rich126
Posts: 2765
Joined: Thu Mar 01, 2018 4:56 pm

Re: The true value of FEHB?

Post by rich126 »

This would be rolling the dice but you can always leave and try to return later.

After 15 years I couldn't see myself surviving another 20 years in the government and left. Mostly I was glad I left since much of the time I had a good time. I went back at age 50 and stayed until I reached my MRA (based on my DOB that was 56) and qualified for a postponed retirement. In that scenario I can delay my health insurance and pension until age 60 (due to having 20 years of service) and then receive both w/o penalty.

My other option would have been to take the insurance and pension at 56 but that would have meant a 30% permanent cut in my pension.

Of course you have to be "lucky" enough to get another offer to come back. If you are technical, it is likely to happen but takes patience and persistence.

I'm glad I did leave because my friends ended up being mostly miserable and just stuck around for the pension/insurance. As good as FEHB may be, it isn't worth being miserable for 5, 10+ years IMO.
Soon2BXProgrammer
Posts: 2256
Joined: Mon Nov 24, 2014 11:30 pm

Re: The true value of FEHB?

Post by Soon2BXProgrammer »

rich126 wrote: Fri May 14, 2021 7:07 pm This would be rolling the dice but you can always leave and try to return later.

After 15 years I couldn't see myself surviving another 20 years in the government and left. Mostly I was glad I left since much of the time I had a good time. I went back at age 50 and stayed until I reached my MRA (based on my DOB that was 56) and qualified for a postponed retirement. In that scenario I can delay my health insurance and pension until age 60 (due to having 20 years of service) and then receive both w/o penalty.

My other option would have been to take the insurance and pension at 56 but that would have meant a 30% permanent cut in my pension.

Of course you have to be "lucky" enough to get another offer to come back. If you are technical, it is likely to happen but takes patience and persistence.

I'm glad I did leave because my friends ended up being mostly miserable and just stuck around for the pension/insurance. As good as FEHB may be, it isn't worth being miserable for 5, 10+ years IMO.
How long do you have to work when you come back? is there a minimum amount of time?
Chartered Financial Consultant (ChFC®) -- However I am not your advisor.
delamer
Posts: 11560
Joined: Tue Feb 08, 2011 6:13 pm

Re: The true value of FEHB?

Post by delamer »

The dollar value of FEHB may be less important than the access to FEHB, pre-Medicare.

I don’t know how to quantify that, since what it gives you is flexibility. You can stop working, take a job with expensive health insurance options, or become self-employed — and not have to worry about your coverage.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
chalet
Posts: 86
Joined: Wed Aug 28, 2019 9:59 pm

Re: The true value of FEHB?

Post by chalet »

to compare things after 65-medicare, consider that FEHB has a drug plan included.

also, every year you can switch companies, for whatever reason you want. it's hard to put a price on that.
Tdubs
Posts: 1215
Joined: Tue Apr 24, 2018 7:50 pm

Re: The true value of FEHB?

Post by Tdubs »

chalet wrote: Fri May 14, 2021 10:53 pm to compare things after 65-medicare, consider that FEHB has a drug plan included.

also, every year you can switch companies, for whatever reason you want. it's hard to put a price on that.
+1
mbres60
Posts: 1092
Joined: Tue Jul 03, 2007 1:47 pm

Re: The true value of FEHB?

Post by mbres60 »

Most people at 65 pick a Medicare supplement to cover the 20% that Medicare does not cover. They also have to pick a drug plan. With FEHB you pick ANY plan as if you were still working. Some work better with Medicare than others but they all include drug benefits. The point is you have choices and can easily switch plans every open season without underwriting. I don’t know how you can put a $$ value to this.
UpperNwGuy
Posts: 5437
Joined: Sun Oct 08, 2017 7:16 pm

Re: The true value of FEHB?

Post by UpperNwGuy »

Medicare + FEHB is a great combination.
Topic Author
Ricky6
Posts: 3
Joined: Sat Apr 03, 2021 8:13 am

Re: The true value of FEHB?

Post by Ricky6 »

So now we know what FEHB gives you.... could someone hazard a guess on how much that is worth?

How much would a supplemental and drug plan cost from 65 to 90? That might give me a good starting point.

Would that be something like 450 a month? So roughly 135k?

With that said, and what would it cost for a similar health plan from 50 to 65? I’m guessing about 800 a month minus the 30 percent you pay into FEHB. so somewhere around 250k

Grand total maybe 385k?
delamer
Posts: 11560
Joined: Tue Feb 08, 2011 6:13 pm

Re: The true value of FEHB?

Post by delamer »

Ricky6 wrote: Sat May 15, 2021 9:00 am So now we know what FEHB gives you.... could someone hazard a guess on how much that is worth?

How much would a supplemental and drug plan cost from 65 to 90? That might give me a good starting point.

Would that be something like 450 a month? So roughly 135k?

With that said, and what would it cost for a similar health plan from 50 to 65? I’m guessing about 800 a month minus the 30 percent you pay into FEHB. so somewhere around 250k

Grand total maybe 385k?

You can find Medigap costs here: https://www.medicare.gov/medigap-supple ... &year=2021

Obviously, a married person is going to have different savings than a single person.

And, also obviously, a dollar today is worth more than a dollar in 10 years. Although health insurance costs have been rising faster than overall inflation.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
Tdubs
Posts: 1215
Joined: Tue Apr 24, 2018 7:50 pm

Re: The true value of FEHB?

Post by Tdubs »

Ricky6 wrote: Sat May 15, 2021 9:00 am So now we know what FEHB gives you.... could someone hazard a guess on how much that is worth?

How much would a supplemental and drug plan cost from 65 to 90? That might give me a good starting point.

Would that be something like 450 a month? So roughly 135k?

With that said, and what would it cost for a similar health plan from 50 to 65? I’m guessing about 800 a month minus the 30 percent you pay into FEHB. so somewhere around 250k

Grand total maybe 385k?
When you consider that the coverage you can get through FEHB might be only $300/mo and has no copays or deductibles, wouldn't the monthly savings be even more than $450/mo?
dukeblue219
Posts: 1620
Joined: Fri Jan 29, 2016 12:40 pm

Re: The true value of FEHB?

Post by dukeblue219 »

Soon2BXProgrammer wrote: Fri May 14, 2021 9:19 pm
rich126 wrote: Fri May 14, 2021 7:07 pm This would be rolling the dice but you can always leave and try to return later.

After 15 years I couldn't see myself surviving another 20 years in the government and left. Mostly I was glad I left since much of the time I had a good time. I went back at age 50 and stayed until I reached my MRA (based on my DOB that was 56) and qualified for a postponed retirement. In that scenario I can delay my health insurance and pension until age 60 (due to having 20 years of service) and then receive both w/o penalty.

My other option would have been to take the insurance and pension at 56 but that would have meant a 30% permanent cut in my pension.

Of course you have to be "lucky" enough to get another offer to come back. If you are technical, it is likely to happen but takes patience and persistence.

I'm glad I did leave because my friends ended up being mostly miserable and just stuck around for the pension/insurance. As good as FEHB may be, it isn't worth being miserable for 5, 10+ years IMO.
How long do you have to work when you come back? is there a minimum amount of time?
Last five years prior to retirement if I recall correctly.
Soon2BXProgrammer
Posts: 2256
Joined: Mon Nov 24, 2014 11:30 pm

Re: The true value of FEHB?

Post by Soon2BXProgrammer »

dukeblue219 wrote: Sat May 15, 2021 10:40 am
Soon2BXProgrammer wrote: Fri May 14, 2021 9:19 pm
rich126 wrote: Fri May 14, 2021 7:07 pm This would be rolling the dice but you can always leave and try to return later.

After 15 years I couldn't see myself surviving another 20 years in the government and left. Mostly I was glad I left since much of the time I had a good time. I went back at age 50 and stayed until I reached my MRA (based on my DOB that was 56) and qualified for a postponed retirement. In that scenario I can delay my health insurance and pension until age 60 (due to having 20 years of service) and then receive both w/o penalty.

My other option would have been to take the insurance and pension at 56 but that would have meant a 30% permanent cut in my pension.

Of course you have to be "lucky" enough to get another offer to come back. If you are technical, it is likely to happen but takes patience and persistence.

I'm glad I did leave because my friends ended up being mostly miserable and just stuck around for the pension/insurance. As good as FEHB may be, it isn't worth being miserable for 5, 10+ years IMO.
How long do you have to work when you come back? is there a minimum amount of time?
Last five years prior to retirement if I recall correctly.
i thought the rule was you had to have the last 5 years of employment opted into FEHB.. it wasn't clear if it had to be continuous.
Chartered Financial Consultant (ChFC®) -- However I am not your advisor.
dukeblue219
Posts: 1620
Joined: Fri Jan 29, 2016 12:40 pm

Re: The true value of FEHB?

Post by dukeblue219 »

Soon2BXProgrammer wrote: Sat May 15, 2021 10:42 am
dukeblue219 wrote: Sat May 15, 2021 10:40 am Last five years prior to retirement if I recall correctly.
i thought the rule was you had to have the last 5 years of employment opted into FEHB.. it wasn't clear if it had to be continuous.
Per OPM.gov:
In order to carry your FEHB coverage into retirement, you must be entitled to retire on an immediate annuity under a retirement system for civilian employees (including the Federal Employees Retirement System (FERS) Minimum Retirement Age (MRA) + 10 retirement) and must have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years).
Soon2BXProgrammer
Posts: 2256
Joined: Mon Nov 24, 2014 11:30 pm

Re: The true value of FEHB?

Post by Soon2BXProgrammer »

dukeblue219 wrote: Sat May 15, 2021 11:15 am
Soon2BXProgrammer wrote: Sat May 15, 2021 10:42 am
dukeblue219 wrote: Sat May 15, 2021 10:40 am Last five years prior to retirement if I recall correctly.
i thought the rule was you had to have the last 5 years of employment opted into FEHB.. it wasn't clear if it had to be continuous.
Per OPM.gov:
In order to carry your FEHB coverage into retirement, you must be entitled to retire on an immediate annuity under a retirement system for civilian employees (including the Federal Employees Retirement System (FERS) Minimum Retirement Age (MRA) + 10 retirement) and must have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years).
I'm not disagreeing on that.. i thought i saw somewhere that the 5 years doesn't have to be continuous, as long as the last 5 years of service you had been continuously enrolled in FEHB?
Chartered Financial Consultant (ChFC®) -- However I am not your advisor.
delamer
Posts: 11560
Joined: Tue Feb 08, 2011 6:13 pm

Re: The true value of FEHB?

Post by delamer »

Soon2BXProgrammer wrote: Sat May 15, 2021 2:10 pm
dukeblue219 wrote: Sat May 15, 2021 11:15 am
Soon2BXProgrammer wrote: Sat May 15, 2021 10:42 am
dukeblue219 wrote: Sat May 15, 2021 10:40 am Last five years prior to retirement if I recall correctly.
i thought the rule was you had to have the last 5 years of employment opted into FEHB.. it wasn't clear if it had to be continuous.
Per OPM.gov:
In order to carry your FEHB coverage into retirement, you must be entitled to retire on an immediate annuity under a retirement system for civilian employees (including the Federal Employees Retirement System (FERS) Minimum Retirement Age (MRA) + 10 retirement) and must have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years).
I'm not disagreeing on that.. i thought i saw somewhere that the 5 years doesn't have to be continuous, as long as the last 5 years of service you had been continuously enrolled in FEHB?
It says the 5 years of service immediately before the date your annuity starts. So, for example, you can’t work for 2 years with FEHB, leave (or drop coverage) for 2 years, come back for 3 years with FEHB, and then get coverage in retirement.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
tj
Posts: 4425
Joined: Thu Dec 24, 2009 12:10 am

Re: The true value of FEHB?

Post by tj »

dukeblue219 wrote: Sat May 15, 2021 10:40 am
Soon2BXProgrammer wrote: Fri May 14, 2021 9:19 pm
rich126 wrote: Fri May 14, 2021 7:07 pm This would be rolling the dice but you can always leave and try to return later.

After 15 years I couldn't see myself surviving another 20 years in the government and left. Mostly I was glad I left since much of the time I had a good time. I went back at age 50 and stayed until I reached my MRA (based on my DOB that was 56) and qualified for a postponed retirement. In that scenario I can delay my health insurance and pension until age 60 (due to having 20 years of service) and then receive both w/o penalty.

My other option would have been to take the insurance and pension at 56 but that would have meant a 30% permanent cut in my pension.

Of course you have to be "lucky" enough to get another offer to come back. If you are technical, it is likely to happen but takes patience and persistence.

I'm glad I did leave because my friends ended up being mostly miserable and just stuck around for the pension/insurance. As good as FEHB may be, it isn't worth being miserable for 5, 10+ years IMO.
How long do you have to work when you come back? is there a minimum amount of time?
Last five years prior to retirement if I recall correctly.
Technically, 1 pay period, or however long it takes for your FEHB to start as a returned employee. You just need five most recent years of coverage. You don't need to stay another 5 years.
tj
Posts: 4425
Joined: Thu Dec 24, 2009 12:10 am

Re: The true value of FEHB?

Post by tj »

delamer wrote: Sat May 15, 2021 3:24 pm
Soon2BXProgrammer wrote: Sat May 15, 2021 2:10 pm
dukeblue219 wrote: Sat May 15, 2021 11:15 am
Soon2BXProgrammer wrote: Sat May 15, 2021 10:42 am
dukeblue219 wrote: Sat May 15, 2021 10:40 am Last five years prior to retirement if I recall correctly.
i thought the rule was you had to have the last 5 years of employment opted into FEHB.. it wasn't clear if it had to be continuous.
Per OPM.gov:
In order to carry your FEHB coverage into retirement, you must be entitled to retire on an immediate annuity under a retirement system for civilian employees (including the Federal Employees Retirement System (FERS) Minimum Retirement Age (MRA) + 10 retirement) and must have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years).
I'm not disagreeing on that.. i thought i saw somewhere that the 5 years doesn't have to be continuous, as long as the last 5 years of service you had been continuously enrolled in FEHB?
It says the 5 years of service immediately before the date your annuity starts. So, for example, you can’t work for 2 years with FEHB, leave (or drop coverage) for 2 years, come back for 3 years with FEHB, and then get coverage in retirement.
You absolutely can work for 2 years ,leave and come back for 3 years, what you can't do is stay employed and drop the coverage.

"the 5 years of service immediately before the date your annuity starts" is your five most recent years of federal employment, not the five calendar years before you start your immediate annuity.
Last edited by tj on Sat May 15, 2021 5:58 pm, edited 1 time in total.
tj
Posts: 4425
Joined: Thu Dec 24, 2009 12:10 am

Re: The true value of FEHB?

Post by tj »

Ricky6 wrote: Sat May 15, 2021 9:00 am So now we know what FEHB gives you.... could someone hazard a guess on how much that is worth?

How much would a supplemental and drug plan cost from 65 to 90? That might give me a good starting point.

Would that be something like 450 a month? So roughly 135k?

With that said, and what would it cost for a similar health plan from 50 to 65? I’m guessing about 800 a month minus the 30 percent you pay into FEHB. so somewhere around 250k

Grand total maybe 385k?
The cheapest Medicare Part D Plan is something like $7/mo, the cheapest MediGap plan is G High Deductible which is as low as $30/mo in some states. Medigap's tend to get more expensive as you age, some states you can change insurers annually, some you can't.

If I reach sufficient net worth before I hit MRA, I'm not sure I would stick around just for FEHB. Medigap and Part D is good enough. If The 2021/2022 ACA cliff removal is made permanent, ACA could be good enough too.
delamer
Posts: 11560
Joined: Tue Feb 08, 2011 6:13 pm

Re: The true value of FEHB?

Post by delamer »

tj wrote: Sat May 15, 2021 5:54 pm
delamer wrote: Sat May 15, 2021 3:24 pm
Soon2BXProgrammer wrote: Sat May 15, 2021 2:10 pm
dukeblue219 wrote: Sat May 15, 2021 11:15 am
Soon2BXProgrammer wrote: Sat May 15, 2021 10:42 am

i thought the rule was you had to have the last 5 years of employment opted into FEHB.. it wasn't clear if it had to be continuous.
Per OPM.gov:
In order to carry your FEHB coverage into retirement, you must be entitled to retire on an immediate annuity under a retirement system for civilian employees (including the Federal Employees Retirement System (FERS) Minimum Retirement Age (MRA) + 10 retirement) and must have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years).
I'm not disagreeing on that.. i thought i saw somewhere that the 5 years doesn't have to be continuous, as long as the last 5 years of service you had been continuously enrolled in FEHB?
It says the 5 years of service immediately before the date your annuity starts. So, for example, you can’t work for 2 years with FEHB, leave (or drop coverage) for 2 years, come back for 3 years with FEHB, and then get coverage in retirement.
You absolutely can work for 2 years ,leave and come back for 3 years, what you can't do is stay employed and drop the coverage.

"the 5 years of service immediately before the date your annuity starts" is your five most recent years of federal employment, not the five calendar years before you start your immediate annuity.
Very interesting.

It appears I stand corrected.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
delamer
Posts: 11560
Joined: Tue Feb 08, 2011 6:13 pm

Re: The true value of FEHB?

Post by delamer »

tj wrote: Sat May 15, 2021 5:57 pm
Ricky6 wrote: Sat May 15, 2021 9:00 am So now we know what FEHB gives you.... could someone hazard a guess on how much that is worth?

How much would a supplemental and drug plan cost from 65 to 90? That might give me a good starting point.

Would that be something like 450 a month? So roughly 135k?

With that said, and what would it cost for a similar health plan from 50 to 65? I’m guessing about 800 a month minus the 30 percent you pay into FEHB. so somewhere around 250k

Grand total maybe 385k?
The cheapest Medicare Part D Plan is something like $7/mo, the cheapest MediGap plan is G High Deductible which is as low as $30/mo in some states. Medigap's tend to get more expensive as you age, some states you can change insurers annually, some you can't.

If I reach sufficient net worth before I hit MRA, I'm not sure I would stick around just for FEHB. Medigap and Part D is good enough. If The 2021/2022 ACA cliff removal is made permanent, ACA could be good enough too.
I’d agree regarding Medigap and Part D. Although with GEHA Standard and no Part B, our premium is less than $300/month for 2 people.

But it’s that period post-employment and pre-Medicare that would make me very nervous, especially having to cover 10 or more years. Whether any ACA provision can be considered permanent is debatable.
One thing that humbles me deeply is to see that human genius has its limits while human stupidity does not. | | Alexandre Dumas, fils
Soon2BXProgrammer
Posts: 2256
Joined: Mon Nov 24, 2014 11:30 pm

Re: The true value of FEHB?

Post by Soon2BXProgrammer »

tj wrote: Sat May 15, 2021 5:54 pm
delamer wrote: Sat May 15, 2021 3:24 pm
Soon2BXProgrammer wrote: Sat May 15, 2021 2:10 pm
dukeblue219 wrote: Sat May 15, 2021 11:15 am
Soon2BXProgrammer wrote: Sat May 15, 2021 10:42 am

i thought the rule was you had to have the last 5 years of employment opted into FEHB.. it wasn't clear if it had to be continuous.
Per OPM.gov:
In order to carry your FEHB coverage into retirement, you must be entitled to retire on an immediate annuity under a retirement system for civilian employees (including the Federal Employees Retirement System (FERS) Minimum Retirement Age (MRA) + 10 retirement) and must have been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service since your first opportunity to enroll (if less than 5 years).
I'm not disagreeing on that.. i thought i saw somewhere that the 5 years doesn't have to be continuous, as long as the last 5 years of service you had been continuously enrolled in FEHB?
It says the 5 years of service immediately before the date your annuity starts. So, for example, you can’t work for 2 years with FEHB, leave (or drop coverage) for 2 years, come back for 3 years with FEHB, and then get coverage in retirement.
You absolutely can work for 2 years ,leave and come back for 3 years, what you can't do is stay employed and drop the coverage.

"the 5 years of service immediately before the date your annuity starts" is your five most recent years of federal employment, not the five calendar years before you start your immediate annuity.
So lets assume, i have 5 years of federal civilian service. I bought back 4 years of military time... So if i work for 1 year at my MRA, i'll qualify? (of course if i work 3 years at my MRA my high 3 calculation would be much better)
Chartered Financial Consultant (ChFC®) -- However I am not your advisor.
tj
Posts: 4425
Joined: Thu Dec 24, 2009 12:10 am

Re: The true value of FEHB?

Post by tj »

Soon2BXProgrammer wrote: Sat May 15, 2021 9:10 pm
tj wrote: Sat May 15, 2021 5:54 pm
delamer wrote: Sat May 15, 2021 3:24 pm
Soon2BXProgrammer wrote: Sat May 15, 2021 2:10 pm
dukeblue219 wrote: Sat May 15, 2021 11:15 am

Per OPM.gov:
I'm not disagreeing on that.. i thought i saw somewhere that the 5 years doesn't have to be continuous, as long as the last 5 years of service you had been continuously enrolled in FEHB?
It says the 5 years of service immediately before the date your annuity starts. So, for example, you can’t work for 2 years with FEHB, leave (or drop coverage) for 2 years, come back for 3 years with FEHB, and then get coverage in retirement.
You absolutely can work for 2 years ,leave and come back for 3 years, what you can't do is stay employed and drop the coverage.

"the 5 years of service immediately before the date your annuity starts" is your five most recent years of federal employment, not the five calendar years before you start your immediate annuity.
So lets assume, i have 5 years of federal civilian service. I bought back 4 years of military time... So if i work for 1 year at my MRA, i'll qualify? (of course if i work 3 years at my MRA my high 3 calculation would be much better)
As long as your 4 military years of bought back time counts as part of the ten years for MRA+10. No idea since it doesn't apply to me and I don't work in a position that would be exposed to that. I don't know if you need 10 years before you add the military time. But if it didn't count, you could go back at 62 to restart it and retire on annuity and keep the FEHB.
Soon2BXProgrammer
Posts: 2256
Joined: Mon Nov 24, 2014 11:30 pm

Re: The true value of FEHB?

Post by Soon2BXProgrammer »

tj wrote: Sat May 15, 2021 10:46 pm
Soon2BXProgrammer wrote: Sat May 15, 2021 9:10 pm
tj wrote: Sat May 15, 2021 5:54 pm
delamer wrote: Sat May 15, 2021 3:24 pm
Soon2BXProgrammer wrote: Sat May 15, 2021 2:10 pm

I'm not disagreeing on that.. i thought i saw somewhere that the 5 years doesn't have to be continuous, as long as the last 5 years of service you had been continuously enrolled in FEHB?
It says the 5 years of service immediately before the date your annuity starts. So, for example, you can’t work for 2 years with FEHB, leave (or drop coverage) for 2 years, come back for 3 years with FEHB, and then get coverage in retirement.
You absolutely can work for 2 years ,leave and come back for 3 years, what you can't do is stay employed and drop the coverage.

"the 5 years of service immediately before the date your annuity starts" is your five most recent years of federal employment, not the five calendar years before you start your immediate annuity.
So lets assume, i have 5 years of federal civilian service. I bought back 4 years of military time... So if i work for 1 year at my MRA, i'll qualify? (of course if i work 3 years at my MRA my high 3 calculation would be much better)
As long as your 4 military years of bought back time counts as part of the ten years for MRA+10. No idea since it doesn't apply to me and I don't work in a position that would be exposed to that. I don't know if you need 10 years before you add the military time. But if it didn't count, you could go back at 62 to restart it and retire on annuity and keep the FEHB.
Makes sense. im pretty sure MRA+10 only required 5 years of civilian time... "An employee must have at least 5 years of creditable civilian service to be eligible for an MRA + 10 retirement annuity." from: https://www.opm.gov/retirement-services ... k/c042.pdf (i know this is an old document, but i have seen it elsewhere, but i can't put my fingers on a more recent document)
Chartered Financial Consultant (ChFC®) -- However I am not your advisor.
tj
Posts: 4425
Joined: Thu Dec 24, 2009 12:10 am

Re: The true value of FEHB?

Post by tj »

delamer wrote: Sat May 15, 2021 9:02 pm
tj wrote: Sat May 15, 2021 5:57 pm
Ricky6 wrote: Sat May 15, 2021 9:00 am So now we know what FEHB gives you.... could someone hazard a guess on how much that is worth?

How much would a supplemental and drug plan cost from 65 to 90? That might give me a good starting point.

Would that be something like 450 a month? So roughly 135k?

With that said, and what would it cost for a similar health plan from 50 to 65? I’m guessing about 800 a month minus the 30 percent you pay into FEHB. so somewhere around 250k

Grand total maybe 385k?
The cheapest Medicare Part D Plan is something like $7/mo, the cheapest MediGap plan is G High Deductible which is as low as $30/mo in some states. Medigap's tend to get more expensive as you age, some states you can change insurers annually, some you can't.

If I reach sufficient net worth before I hit MRA, I'm not sure I would stick around just for FEHB. Medigap and Part D is good enough. If The 2021/2022 ACA cliff removal is made permanent, ACA could be good enough too.
I’d agree regarding Medigap and Part D. Although with GEHA Standard and no Part B, our premium is less than $300/month for 2 people.

But it’s that period post-employment and pre-Medicare that would make me very nervous, especially having to cover 10 or more years. Whether any ACA provision can be considered permanent is debatable.
I agree. There's also the possibility that medicare age gets reduced, so depending on how long before Medicare starts tat you retire, how long you can utilize that FEHB while being retired, which determines the value. Also if someone is going to be in massive IRMAA territory, FEHB could be hugely valuable after medicare age because you can bypass Medicare and associated IRMAA and just stay on FEHB.
chalet
Posts: 86
Joined: Wed Aug 28, 2019 9:59 pm

Re: The true value of FEHB?

Post by chalet »

Ricky6 wrote: Sat May 15, 2021 9:00 am

Grand total maybe 385k?

I would be looking at the *difference*.

(no fehb costs) minus (yes fehb costs)

don't forget the copays and deductibles.
Post Reply