FEHB Cost in Retirement Calculator

FEHB in retirement: the 5-year rule

Three things have to be true when you retire or you lose FEHB coverage. First, you need to be entitled to an immediate annuity, which includes an MRA+10 retirement. If you separate before you're eligible to retire and take a deferred annuity at 62, FEHB ends when you leave and doesn't come back when the pension begins.

Second, you must have been continuously covered by FEHB for the 5 years immediately before your annuity starts. Time covered as a family member under a spouse's or parent's FEHB enrollment counts, and so does TRICARE coverage if you hold an FEHB enrollment when you retire. If you first became eligible less than 5 years before retirement, you need coverage since your first opportunity.

Third, you need to be actively enrolled on your last day of federal service.

If you miss the 5-year window, there's generally no way back in. VERA (Voluntary Early Retirement Authority) retirements count as immediate annuities, so VERA retirees who meet the 5-year rule keep their FEHB coverage. MRA+10 retirees who postpone their annuity to shrink the age reduction can re-enroll in FEHB when the postponed annuity starts, as long as they met the 5-year rule when they separated. Coverage stops during the gap, so plan for it.

Postal Service retirees are a separate case. Since January 1, 2025, Postal Service employees and annuitants get health coverage through the Postal Service Health Benefits (PSHB) Program, not FEHB, so the premiums on this page don't apply to them.

What FEHB costs in 2026

The government pays roughly 72% of the weighted average FEHB premium for both active employees and retirees. You pay the difference. The split is set by 5 U.S.C. 8906(b) (the lesser of 72% of the weighted average or 75% of your plan's premium), but the dollar amounts change every year with premiums. BCBS Basic self-only went from $245.18 to $289.83 a month for 2026.

In 2026, three of the most widely used plans break down like this for self-only coverage:

The premiums above are what you pay. The government's share is about 2.4 times larger. That's not obvious when you see a $289.83/month deduction from your pension, but the full cost of BCBS Basic self-only coverage in 2026 is $993.48/month. The government pays $703.65 of it.

Regional HMOs can be cheaper where they operate. Plan options vary by zip code, so check OPM's plan comparison tool each open season.

Medicare and FEHB coordination

At 65, two things change. Medicare Part A (hospital coverage) kicks in with no premium for most retirees who worked enough quarters, and you become eligible for Medicare Part B (physician and outpatient coverage) at $202.90/month in 2026.

Almost every federal retiree enrolls in Part A. It costs nothing and it's automatic if you're already drawing Social Security. There's no reason not to have it.

Part B is a different decision. Most federal retirees skip it, at least initially. FEHB alone provides good coverage, and adding Part B costs $2,434.80 per year at the standard premium, more if your income is high enough to trigger IRMAA surcharges. With FEHB as your only coverage at 65, there's no Medicare coordination, but FEHB plans are designed to handle this. You're not uninsured.

When Part B makes sense: if you have significant ongoing medical costs, Part B becomes primary payer, FEHB fills in the gaps, and your out-of-pocket costs can drop substantially. Your FEHB premium doesn't drop when Medicare starts. Some retirees switch to a lower-cost FEHB plan at open season, since FEHB only needs to cover what Medicare doesn't. Running the combined math matters because the Part B premium plus a cheaper FEHB plan can come out better than FEHB alone if you actually use the coverage.

FEHB vs. ACA marketplace coverage

KFF puts the 2026 national average benchmark silver premium at $625 a month for a 40-year-old. Marketplace prices climb with age. Under CMS's default age curve a 60-year-old pays 2.714 / 1.278 times what a 40-year-old pays, so the same average works out to about $1,327 a month before any premium tax credit. A retiree in BCBS Basic self-only pays $289.83 for 2026, roughly $1,037 a month less.

Where you live moves that number a lot. KFF's 2026 state averages for a 40-year-old run from $401 in New Hampshire to $1,299 in Vermont, and some states set their own age curves. A premium tax credit lowers the marketplace price if your income qualifies. The calculator shows this comparison for self-only coverage only, since marketplace premiums are priced per person.

People who leave federal service before 5 years and lose FEHB eligibility often don't realize what they're giving up until they price out coverage on healthcare.gov.

FEHB and IRMAA

If your income in retirement is high enough, Medicare's Income-Related Monthly Adjustment Amount adds surcharges to your Part B (and Part D) premiums. In 2026, IRMAA starts when your modified adjusted gross income exceeds $109,000 for single filers, or $218,000 for married filing jointly.

At the first IRMAA tier, Part B costs more than the $202.90 standard premium. At the highest tier, $500,000 or more for single filers ($750,000 joint), it reaches $689.90/month. These numbers matter for the Medicare enrollment decision. A retiree with a substantial FERS pension plus TSP withdrawals plus Social Security can easily cross IRMAA thresholds, which changes the Part B math significantly.

IRMAA is based on income from 2 years prior. If your income drops substantially in retirement, you can appeal IRMAA surcharges using a life-changing event form (SSA-44). Federal retirees transitioning from full salaries to pension-only income often qualify.

The interaction between IRMAA and the FEHB decision is one of the more complex pieces of federal retirement planning. It's genuinely worth a conversation with an advisor who knows the federal benefits system before you turn 65.