The FEHB five-year rule says a federal employee can keep Federal Employees Health Benefits coverage in retirement only if they retire on an immediate annuity and were continuously enrolled in FEHB, or covered as a family member, for the five years of service immediately before retirement. If they have had less than five years of eligibility, they must have been enrolled since their first opportunity. Miss it, and the client generally loses FEHB for life.
Open season runs November 9 through December 14, 2026. For clients who may retire around 2032 and are not enrolled today, this open season may be the last practical chance to start the clock.
The Two Requirements of the FEHB Five-Year Rule
OPM's FAQ on continuing health benefits into retirement lists both conditions. The client must:
- Retire on an immediate annuity. OPM defines this as an annuity that begins to accrue no later than one month after the date of final separation.
- Meet the continuous coverage test. The client must have been continuously enrolled, or covered as a family member, in any FEHB plan for the five years of service immediately preceding retirement, or for all service since the first opportunity to enroll if that is less than five years.
Both conditions must be met. One without the other does not work.
The FEHB five-year rule in numbers
5 years
Continuous coverage before retirement
1 month
Annuity must begin within
Any plan
Plan changes do not reset the clock
What Counts Toward the Five Years
Any FEHB plan
The rule does not require the same plan for five years. A client can switch plans every open season and still meet the requirement, as long as the coverage is continuous.
Coverage as a family member
Time covered as a family member counts. A client who was covered under a spouse's FEHB Self and Family enrollment meets the test for that period. This is common in dual-federal households, where one spouse carries the enrollment and the other does not enroll on their own.
That arrangement needs a plan for the future. If the spouse with the enrollment retires, dies or divorces the client, the client's coverage may change. Advisors should review how the family will keep coverage, especially if the non-enrolled spouse plans to retire later.
First opportunity to enroll
Clients with less than five years of FEHB eligibility, such as those with short federal careers, meet the test if they have been covered since their first opportunity to enroll. Someone who declined coverage at hire and enrolled later does not get that alternative.
Where Clients Go Wrong
Dropping FEHB for other coverage
The most common problem is a client who canceled FEHB because a spouse's private employer plan was cheaper. When that client approaches retirement, they discover they cannot meet the five-year test. Advisors should ask every client, not just those near retirement, whether they are enrolled in FEHB in their own name or as a family member.
Retirement types without an immediate annuity
A deferred retirement does not qualify, because the annuity does not begin within a month of separation. Clients who leave federal service before they are eligible for an immediate annuity generally cannot carry FEHB into retirement, even if they have decades of coverage. Under FERS, the MRA+10 retirement provides an immediate annuity, and clients who postpone the annuity start date need to understand how that affects health coverage.
Waiting too long to enroll
Enrollment changes made during open season do not take effect right away. OPM's plan year 2027 highlights show that open season changes for non-postal employees take effect January 10, 2027. A client who enrolls during this open season begins the five-year clock on that date, not on the day they submit the election.
| Enrollment group | 2027 open season effective date |
|---|---|
| FEHB, non-postal employees | January 10, 2027 |
| FEHB, compensationers (OWCP) | January 24, 2027 |
| FEHB, annuitants | January 1, 2027 |
| PSHB, all enrollees | January 1, 2027 |
Qualifying life events can also allow enrollment outside open season, but they should not be the plan.
Planning Scenarios
The client covered by a spouse's private plan
A client who is not enrolled in FEHB because a spouse's employer plan covers the family should know the trade-off. If retirement is more than five years away, enrolling during this open season keeps the option open. If retirement is closer, the client may not be able to meet the test and should plan for coverage outside FEHB.
The client planning an early exit
A client who wants to leave federal service before reaching an immediate retirement should understand that FEHB generally will not follow. Advisors should compare the value of staying until immediate annuity eligibility with the cost of private coverage until Medicare.
The dual-federal couple
When both spouses work for the government, each may meet the test through the other's Self and Family enrollment. Even so, it is worth confirming which spouse will retire first and how the enrollment will be carried after that.
The Waiver Is Narrow
OPM can waive the requirement, but only in limited cases. Under 5 CFR 890.108, OPM may grant a waiver in its sole discretion when exceptional circumstances make it against equity and good conscience to deny enrollment. The person must provide evidence that:
- They intended to have FEHB coverage as an annuitant.
- The circumstances that prevented them from meeting the requirement were beyond their control.
- They acted reasonably to protect their right to continue coverage into retirement.
A client who simply chose other coverage is unlikely to meet that standard. Advisors should treat the waiver as a last resort, not a strategy.
A Simple Review Checklist
Use these questions in every federal client review:
- Is the client enrolled in FEHB today, either in their own name or as a covered family member?
- When did the current continuous coverage begin?
- What is the client's target retirement date, and will they have five years of coverage by then?
- Will the client retire on an immediate annuity?
- If coverage is through a spouse, what happens if that spouse retires first, dies or the marriage ends?
- Does the client plan to postpone the annuity start date, and has the health coverage effect been explained?
For postal clients, PSHB has its own eligibility and Medicare rules. Confirm how they apply before assuming FEHB answers carry over.
Why This Matters to the Plan
FEHB in retirement is one of the most valuable federal benefits. The government continues to pay its share of the premium for eligible annuitants, and coverage can coordinate with Medicare. A client who loses it must find coverage elsewhere, which can change the entire retirement budget.
This year adds another reason to review coverage. OPM reports that the average FEHB enrollee premium share is rising 10.9% for 2027. Clients may be tempted to drop FEHB for a cheaper outside plan. Before they do, they should understand what it could cost them at retirement. Our post on 2027 FEHB premiums covers the premium changes, and OPM's open season page links to plan comparisons and rate charts.
Building This Into Your Practice
The five-year rule is a good example of a federal benefit that a generic financial plan can miss. FedEd Academy™ teaches FEHB eligibility and retirement timing in its live program, and advisors who want a recognized credential can explore the RFBS℠ designation. Common advisor questions are answered on our FAQ page.
Five years of continuous coverage and an immediate annuity. Those two tests decide whether a client keeps FEHB for life. Check them early, and use this open season to fix any gaps while there is still time.
Frequently asked questions
What is the FEHB five-year rule?
To continue FEHB coverage into retirement, an employee must retire on an immediate annuity and must have been continuously enrolled, or covered as a family member, in any FEHB plan for the five years of service immediately before retirement, or for all service since the first opportunity to enroll if that is less than five years.
Does the client have to stay in the same FEHB plan for five years?
No. OPM states that the five years can be in any FEHB Program plan, not necessarily the same plan.
Does coverage as a spouse count toward the five years?
Yes. OPM's rule counts time the employee was covered as a family member under another person's FEHB enrollment.
What is an immediate annuity?
OPM defines it as an annuity that begins to accrue no later than one month after the date of final separation.
Can OPM waive the five-year requirement?
Under 5 CFR 890.108, OPM may waive the requirement in its sole discretion for exceptional circumstances. The person must show they intended to have FEHB in retirement, that the circumstances were beyond their control, and that they acted reasonably to protect their right to coverage.
