If your spouse will depend on your FEHB coverage in retirement it’s important to understand what will happen to their benefits if you pre-decease them.
First, You Must Meet The FEHB 5-Year Rule
For you and your spouse to continue your FEHB benefits into retirement, you must meet two requirements:
(1) You have retired on an immediate annuity which is an annuity that begins to accrue no later than one month after the date of your final separation; and
(2) You have been continuously enrolled (or covered as a family member) in any FEHB plan (not necessarily the same plan) for the five (5) years of service immediately preceding retirement (or, if less than five years, for all service since your first opportunity to enroll).
Without A Survivor Annuity, Your Spouse’s FEHB Coverage Is Terminated
If your spouse is covered under your FEHB in retirement when you pass away, they must be the recipient of a FERS or CSRS survivor annuity to continue their FEHB coverage. If you elect “No Survivor Annuity” on your retirement application, your spouse’s FEHB coverage is terminated.
However, there is one exception: if your surviving spouse doesn’t receive a survivor annuity because a divorce court order awarded 100% of the survivor annuity to your former spouse, your surviving spouse is still eligible to continue FEHB coverage. Otherwise, if you don’t choose a Survivor Annuity, FEHB coverage for your spouse will end.
If your spouse is covered under your FEHB in retirement when you pass away, they must be the recipient of a FERS or CSRS survivor annuity to continue their FEHB coverage. If you elect “No Survivor Annuity” on your retirement application, your spouse’s FEHB coverage is terminated.
However, there is one exception: if your surviving spouse doesn’t receive a survivor annuity because a divorce court order awarded 100% of the survivor annuity to your former spouse, your surviving spouse is still eligible to continue FEHB coverage. Otherwise, if you don’t choose a Survivor Annuity, FEHB coverage for your spouse will end.
When Your Surviving Spouse Remarries
If a surviving spouse remarries before age 55, their FEHB benefits end on the last day of the month before they remarry. However, when a surviving spouse has been married for 30 years or more to the deceased annuitant, their FEHB benefits will continue even if they remarry.
How Does The Survivor Annuity Work?
For FERS participants, you can elect to have your survivor receive 50% of your base annuity when you pass away, or 25% of your base annuity. The reduction in your FERS annuity amounts to 10% for the 50% survivor benefit and a 5% reduction for the 25% survivor benefit.
CSRS participants can elect any amount for a survivor annuity ranging from $1 per year up to 55% percent of your base annuity. For a full CSRS survivor annuity, the reduction of your base annuity is around 10% while a reduced survivor benefit costs proportionately less.
Consider working with an FRC® trained advisor who fully understands your benefits and can help you crunch the numbers to make the best decision for your family.
