As a federal employee, you know that you have robust benefits, and you’re likely aware that your Federal Employees Health Benefit (FEHB) coverage is one of your most valuable benefits. But what happens to your FEHB coverage if you die? In the past, I have discussed the requirements for a spouse to maintain your FEHB coverage, but I have not covered whether dependent children can keep their coverage. This topic is especially concerning if you are not married. So, this week we’ll review the answer to this critical question.
Can Your Children Keep FEHB?
To answer this question, we will review two scenarios. In scenario one, a surviving spouse is eligible to continue their FEHB coverage, and in scenario two, the deceased federal employee was not married.
Scenario 1: Surviving Spouse
When a surviving spouse is eligible to maintain their FEHB coverage, the situation is pretty straightforward. The spouse will retain FEHB, and any surviving children can remain on the plan until they marry or reach age 26.
Note: You can learn more about the requirements for a surviving spouse to maintain FEHB coverage here.
Scenario 2: No Surviving Spouse
Like spouses, surviving children of federal employees or retirees can maintain their FEHB coverage if the following requirements are met:
• The child must have been enrolled in FEHB before the employee or annuitants’ death, and
• The child must be eligible for a survivor annuity.
Although these requirements are identical to those for a surviving spouse, there is one crucial difference, no survivor election is required for a child. Huh? Yes, it can be a bit confusing but bear with me.
Unlike spouses, a dependent child is automatically eligible for a survivor benefit. In my last article, I covered the Child Survivor Benefit, an automatic fixed monthly benefit paid to eligible surviving children of federal employees or retirees.
The Child Survivor Benefit Requirements
Since one of the requirements to maintain FEHB is entitlement to a survivor benefit, if a surviving child relies on the Child Survivor Benefit to meet the FEHB requirements, they will be further restricted by the rules governing the Child Survivor Benefit.
The Child Survivor benefit has different eligibility requirements than the FERS Survivor benefit elected at retirement. For instance, the benefit is limited to children who are unmarried and under age 18 (age 22 if a full-time student) or if over 18 must be incapable of self-support due to a physical or mental disability that began before age 18.
Hence, once the surviving child turns 18 (22 if a full-time student) or marries, they will lose their FEHB coverage. These requirements are less favorable than those for surviving children enrolled under a parent.
Note: Although the child’s Social Security benefits will likely offset the Child Survivor Benefit, they need not receive the payment but only need to be eligible for the annuity to meet the FEHB requirements.
When creating a plan for the care of your children in the case of your death, ensuring they have continued access to healthcare is a critical element. And although we all hope that these scenarios never happen, you need a plan in place if the worst does occur. So, the sooner you start to consider the unique factors in your life and the ones laid out in this article, the better off you and your family will be. Remember that if your child meets the requirements discussed, they will maintain their FEHB coverage. As always, if you need help putting your financial plan together, consult with a qualified financial planner.
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2023 Legislative Change Notice
The SECURE ACT 2.0 passed and impacted many of the articles on this website. While the articles were correct when written, it’s impossible to re-write every article. Please consult a qualified professional (i.e., CFP®, CPA, or attorney) before implementing any strategy.