Lost Your Federal Health Insurance? Here’s What You Can Do Next

For most federal employees, the Federal Employees Health Benefits (FEHB) program has been a reliable constant. But when you separate from service, especially if you’re not retiring right away you lose access to FEHB. And that can trigger one of the most immediate, stressful questions: How am I supposed to afford health insurance now?

Let’s break it down clearly because your options depend on how you’re leaving federal service. Are you retiring? Taking early retirement? Resigning or being laid off? Each scenario has different rules when it comes to FEHB. And while FEHB is governed by OPM and the rules are consistent across federal agencies, the process might feel different depending on how your agency communicates or implements these rules.

Understanding the Three Exit Paths

Before diving into health insurance options, it’s important to identify which category you fall into:

• Immediate Retirement: If you’re retiring under standard eligibility rules (such as MRA+10, MRA+30, Age 60 with 20 years, or Age 62 with 5 years), you can typically carry FEHB into retirement if you’ve been enrolled in FEHB for the 5 years of service immediately before retirement, or since your first opportunity to enroll.
• Early Retirement (VERA/VSIP/Discontinued Service): If you’re taking early retirement under a Voluntary Early Retirement Authority (VERA) or are being involuntarily separated (e.g. due to RIF), OPM may waive the 5-year FEHB requirement if you’ve been continuously enrolled since the agency’s early retirement authority was approved. These waivers are typically automatic and don’t require a separate request.
• Separation Without Retirement: If you’re leaving federal service without retiring, whether you resigned, were laid off, or didn’t meet retirement eligibility you’ll lose FEHB and will need to explore other options like TCC or ACA marketplace plans.

What Happens to FEHB If You’re Retiring Immediately

If you’re retiring under standard rules like MRA+10, MRA+30, Age 60 with 20 years, or Age 62 with 5 years you may be able to continue your FEHB into retirement without interruption.

But there’s a key rule: you must have been enrolled in FEHB for the 5 years of service immediately before retirement, or since your first opportunity to enroll. This is known as the “5-year rule.”

Example: If you’ve had FEHB continuously from 2020 to 2025 and retire in 2025, you meet the requirement. If you only enrolled in 2023, but that was your first chance to enroll after returning to federal service, you may still qualify.

Once approved, your FEHB premiums will be deducted from your annuity, and you’ll continue receiving the same coverage in retirement.

What Happens to FEHB If You’re Taking Early Retirement (VERA/VSIP/DSR)

If you’re separating under an agency-approved Voluntary Early Retirement Authority (VERA) or Voluntary Separation Incentive Payment (VSIP) or if you’re being involuntarily separated under a discontinued service retirement (DSR) you may also be able to keep your FEHB coverage in retirement, even if you don’t meet the full 5-year rule.

OPM allows automatic waivers of the 5-year requirement if you:

• Have been enrolled in FEHB since your agency’s VERA or VSIP authority began
• Separate during the approved early retirement window
• Are taking a VERA, VSIP, or are separated involuntarily due to RIF, reclassification, or directed reassignment

These waivers are typically automatic and don’t require you to submit a special request. If this applies to you, confirm with your HR office whether your retirement qualifies under these provisions.

What Happens to FEHB When You Separate (Without Retirement)

When you leave federal service (and you’re not retiring with immediate eligibility), your FEHB coverage ends at the end of the pay period in which you separate.

You’re entitled to a 31-day free extension of coverage. After that, you have a few options, one of which is Temporary Continuation of Coverage (TCC).

What is TCC and Why is it So Expensive?

TCC lets you keep your FEHB plan for up to 18 months but here’s the catch:

• You must pay 100% of the premium (your share plus the government’s share)
• Plus a 2% administrative fee

That means you’re paying 102% of the full premium cost. Here’s what that can look like in 2025:

FEHB Plan	Coverage Type	Full Monthly Premium	TCC Monthly Cost (102%)
BCBS Basic	Self + One	$750.04	~$765.04
GEHA High	Self + Family	$1,882.18	~$1,919.82
Kaiser Standard	Self Only	$577.99	~$589.55

These prices vary by plan, but the message is clear: TCC is unaffordable for most people who are newly unemployed.

Affordable Alternatives You Should Explore

ACA Marketplace Plans (HealthCare.gov) – The Affordable Care Act (ACA) created a health insurance marketplace where you may qualify for subsidies based on income. If you recently lost your job, your income might be low enough to make these plans very affordable or even free. Bronze plans can be as low as $0–$100/month depending on your state and income. Silver plans may qualify for cost-sharing reductions, which lower deductibles and out-of-pocket costs. Losing FEHB qualifies you for a Special Enrollment Period, so even if your 30-day window has passed, you may still qualify based on your circumstances – it’s worth checking. Visit HealthCare.gov to get started.

Spouse or Partner’s Employer Plan – If your spouse or domestic partner has a job with benefits, check if you can enroll in their plan. Most employer-sponsored health plans allow 30–60 days after a qualifying event (like job loss) to add dependents. This option often provides good coverage at a reasonable cost, especially for families.

Short-Term Insurance (Use With Caution) – Short-term plans are limited and don’t cover pre-existing conditions, but they can offer basic coverage in an emergency. They’re not a long-term solution but if you need to bridge a month or two until your next job, it’s worth exploring.

Quick Tips to Manage the Transition

• Don’t assume you’re stuck with TCC. It’s just one option and usually not the best.
• Estimate your income carefully when applying for ACA subsidies. If you’re unsure, use a conservative estimate and update it later if your situation changes.
• Apply quickly. Special enrollment windows are time-sensitive.

Losing your job is hard enough – don’t let fear over health insurance add to the stress. You have options, and many of them are more affordable than you think.

If you’re a federal employee navigating job loss or transition, this is one of the most important decisions to get right. Even if your 31-day window has already passed, don’t assume you’re out of options. Marketplace coverage or spouse plans might still be available, and it’s worth exploring what’s open to you now.