You have been covered for years under your spouse's federal health plan. Now you are divorcing, you are not yet 65, and buying private insurance at your age could cost more than your mortgage. Keeping FEHB after divorce is possible, and for many former spouses it can last for life. But it depends almost entirely on the words in one court order, and the mistakes that cost people their coverage are hard or impossible to fix later.

Short answer: A former spouse can keep Federal Employees Health Benefits (FEHB) in their own name if the divorce order awards them a share of the federal retirement annuity, a former spouse survivor annuity, or both, and they apply within 60 days. To protect coverage until Medicare and beyond, the order should award both, in the exact terms the U.S. Office of Personnel Management (OPM) requires.

Who can keep FEHB as a former spouse

Federal law lets a "former spouse" enroll in FEHB on their own. Under 5 U.S.C. § 8901(10), you qualify if all of these are true:

• •You were divorced while your spouse was a federal employee or was receiving a federal retirement annuity.
• •You were enrolled in an FEHB plan as a family member at any time during the 18 months before the divorce.
• •You receive, or a court order entitles you to, a portion of your spouse's retirement annuity or a former spouse survivor annuity.
• •You have not remarried before age 55.

The third requirement is the one you control in the divorce. OPM summarizes the same rules on its spouse equity FAQ page. If you are already 55 or older, remarrying later will not cost you eligibility.

What to put in the order to keep FEHB after divorce

Many South Carolina divorces end with a written agreement that the family court approves and makes part of the final order. For a federal employee or retiree, that agreement should include these terms:

• •A share of the retirement annuity, with no end date. Coverage based on an annuity share lasts only while you are entitled to that share. An award that stops after a set number of years, or once a set amount is paid, can end your health insurance with it.
• •An express former spouse survivor annuity. If coverage rests only on an annuity share, it ends when your former spouse dies and no survivor annuity is payable. A survivor annuity keeps you eligible after that.
• •The right words. Name the retirement system — CSRS, FERS, "OPM" or "Federal Government" all work — and call the benefit a "former spouse survivor annuity."
• •Who pays for the survivor annuity. The order can take the cost from your share or from your former spouse's share. More on that below.
• •A statement that you will remain eligible for FEHB as a former spouse. It does not create eligibility on its own, but it puts both sides on notice of what the order is meant to protect.

Trap 1: "A COAP to follow"

OPM honors state court orders it calls COAPs, short for court orders acceptable for processing. It is common to sign an agreement that says a separate retirement order will be prepared later. For a survivor annuity, that can be fatal.

In Rafferty v. Office of Personnel Management, 407 F.3d 1317 (Fed. Cir. 2005), the divorce order reserved jurisdiction to enter a COAP later but did not itself award a survivor annuity. The court held that a reservation like that does not satisfy the federal requirement that the award be express. Put the survivor annuity language in the agreement and the final order themselves.

Trap 2: A share of the pension is not a survivor annuity

Many orders say the former spouse gets "50% of the retirement" and stop there. That divides the monthly annuity while your former spouse is alive. It does not provide anything after death. In Hokanson v. Office of Personnel Management, 122 F.3d 1043 (Fed. Cir. 1997), the court refused to read a share of retirement benefits as a survivor annuity. "An award of a former spouse survivor annuity must be express," the court wrote. "This requirement is not a mere technicality."

Wording matters in the other direction too. OPM's rules, at 5 C.F.R. § 838.912, accept terms such as "former spouse survivor annuity" or "survivor annuity." Never use the phrase "insurable interest annuity." That is a different benefit, OPM cannot enforce an order for it, and the wording does not qualify.

Trap 3: Thinking you can fix it later

If your spouse is already retired, there is usually no second chance. Federal law says a change to a divorce order made after retirement or death has no effect on a survivor annuity. 5 U.S.C. § 8341(h)(4) (CSRS); § 8445(d) (FERS). OPM's rule, at 5 C.F.R. § 838.806, requires that after retirement the survivor annuity be in the first order that divides the marital property. A later "clarifying" order does not work — that was the second holding in Hokanson. Neither does an order entered "nunc pro tunc," back-dated to the divorce. OPM counts the date it was actually filed.

There is one narrow opening. If the divorce decree left property division for later, the first order that does divide the property can still award the survivor annuity. Newman v. Love, 962 F.2d 1008 (Fed. Cir. 1992). Do not plan around that. Get it right the first time.

Trap 4: Asking for a five-year survivor annuity

If your goal is coverage only until Medicare, a survivor annuity that ends after five years can sound like a fair compromise. OPM will not carry out that limit. Under 5 C.F.R. § 838.931, a temporary award becomes permanent on the date OPM can no longer honor changes to the order. If your spouse is already retired, that is the date of the first court order dividing your property. If your spouse is still working, it is the date your spouse retires or dies. Until then, a court can still change the survivor annuity, but whatever the order says on that date is what OPM will pay, for life. The survivor annuity also ends if you remarry before 55 or die. Both sides should understand they are agreeing to a lifetime benefit, whether or not your spouse has retired.

Trap 5: Missing the 60-day deadline

Under 5 U.S.C. § 8905(c), you must enroll within 60 days after the divorce. If the marriage ends after your spouse's retirement, the window can run instead from a later survivor annuity election by the retiree, if that date is later. OPM's guidance also allows 60 days after it notifies you that you are eligible. Calendar the date the day the order is signed, and send OPM a certified copy of the order promptly.

Expect to pay the full premium yourself, plus the amounts OPM sets for administration and reserves. The government no longer pays a share. That premium is a real monthly cost to account for when you negotiate support, including any of the five types of alimony in South Carolina.

Trap 6: Cancelling coverage, or missing a payment

This one can undo everything. Under 5 C.F.R. § 890.807, a former spouse whose coverage ends may not re-enroll, and neither may one who cancels for any reason. If you miss a premium payment, coverage ends back to the last period you paid for. Pay on time, every time, and never cancel to save money for a few months.

When you reach 65, you do not lose FEHB. Many people keep it alongside Medicare. If you decide to move to a Medicare-sponsored plan, such as a Medicare Advantage plan, the rule lets you suspend FEHB instead of cancelling it. Ask before you make that change.

Why temporary continuation of coverage is not enough

You may hear about Temporary Continuation of Coverage, or TCC. It is a short-term bridge, not a solution. After a divorce, it lasts no more than 36 months, and you pay the full premium plus up to 2 percent. 5 U.S.C. § 8905a. If you are 60 and need coverage until 65, TCC runs out two years early.

Who pays for the survivor annuity?

A survivor annuity is paid for by reducing the retiree's monthly annuity. OPM will collect the cost only that way; it will not honor an order that has either side pay it some other way. 5 C.F.R. § 838.807. The order can take the cost from your share of the annuity or from your former spouse's share. If the order says nothing, OPM takes it from the retiree's share.

That gives you room to negotiate. A modest survivor annuity costs less and, under the rules above, still supports your FEHB eligibility. Offering to bear the cost from your own share can make the retiree more willing to agree. For more on how retirement accounts are treated in a South Carolina divorce, see our article on protecting nonmarital retirement accounts in South Carolina divorces.

Frequently asked questions

My spouse is still working for the federal government. Do the same rules apply?

Mostly, yes. You still need a court order awarding a share of the annuity or a survivor annuity, and you still have 60 days to enroll. While your spouse is still working, you enroll and pay premiums through your spouse's employing agency rather than OPM. The "no fixes after retirement" rule is less of a risk before retirement, but there is no reason to wait.

Can my children stay on my FEHB plan?

A former spouse can enroll for self plus one or self and family. Under § 8905(c)(2), covered children are the unmarried children of the marriage under 22, or older if they cannot support themselves because of a disability that began before 22. Confirm the current rules with OPM before relying on coverage for an older child.

What if my divorce was already finalized without a survivor annuity?

If your former spouse is retired, a later order usually cannot add one. If your coverage rests on an annuity share, it continues while that share is payable. Talk with a lawyer about where that leaves you before your former spouse's health or circumstances change.

Does this apply to military retirement and TRICARE?

No. Military retired pay and TRICARE run under different rules. An order affecting military retired pay does not award a survivor annuity under the civilian systems this article covers.

Talk to a Charleston family law attorney before you sign

A divorce involving a federal employee or retiree turns on details that are easy to miss and hard to fix. Klok Law represents spouses in the Charleston, Berkeley and Dorchester County family courts, and we review federal retirement and health insurance terms before an agreement is signed. Call Klok Law at (843) 701-1695 to discuss your options, or visit our family law practice page.

This article is for general information only and is not legal advice. For advice about your specific situation, contact Klok Law at (843) 701-1695.