Click here to skip navigation
An official website of the United States Government.
Skip Navigation

In This Section

Insurance FAQs Health

Premium Conversion

  • Enrollment or participation in premium conversion ends if you terminate or are terminated from Federal government employment. If you are eligible and elect to participate in Temporary Continuation of Coverage (TCC), you pay those premiums directly on an after-tax basis.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • Yes, but only slightly. FEHB enrollment changes may only be made outside of the Open Season under certain circumstances. Under premium conversion, the opportunity to reduce or cancel your enrollment may be limited by the Internal Revenue Code. You will be allowed to drop coverage or change to Self Only outside of Open Season only if your decision to do so comes at the time of a qualifying life event (QLE). These changes from current FEHB are minor, and the tax savings of premium conversion are significant.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • Transfer-in FEHB Enrollment Under CSRS/FERS, your employing office must transfer-in your FEHB enrollment as of your effective date of participation in premium conversion. Procedures and guidelines pertaining to the transfer of the FEHB enrollment of reemployed annuitants who participate in premium conversion are outlined in Payroll Office Letter P-00-13 [129 KB], FEHB Premium Conversion. Employing Agency Must Contribute Employer Share of Premium Prior to premium conversion, the employer share of the FEHB premium for reemployed annuitants under CSRS/FERS was paid from an OPM appropriation. Effective with premium conversion, your employing office must contribute the employer share of the FEHB premium for all reemployed annuitants that are enrolled in the FEHB as employees. The employer contribution for reemployed annuitants will be remitted to OPM in the same manner as that for other employees. Separation from Active Service Your participation in premium conversion ends on the last day of the last pay period as an employee. When you separate from active service, your FEHB enrollment must be transferred back from your employing agency to OPM or the appropriate retirement system.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • If you are not participating in premium conversion, you may elect to reduce your FEHB coverage at any time. As a participant in premium conversion you will be able to reduce FEHB coverage only during an FEHB Open Season or in conjunction with a qualifying life event (QLE). IRS rules govern these non-Open Season opportunities for those who participate in premium conversion.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • Premium conversion does not affect your EITC. The EITC is based on Total Earned Income (TEI), which includes both taxable and nontaxable earned income. Taxable earned income includes money earned as wages, salaries and tips while nontaxable earned income includes salary deferrals and reductions. Premium conversion falls under the category of nontaxable earned income because salary is reduced by an amount equal to a health insurance premium payment and a health insurance premium is then paid with these pre-tax dollars. The EITC amount is unaffected by premium conversion because premium conversion shifts health insurance premium payments from taxable to nontaxable earned income, both of which are included in the TEI when calculating the EITC.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • FEHB premiums deducted from the pay of a participating employee are deducted BEFORE FICA and Federal income taxes. When an employee waives participation in premium conversion, FEHB premiums will continue to be deducted from the pay after FICA and Federal income taxes. In all cases, deductions for CSRS or FERS will continue to be made first.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • We ensure that the plans provide the benefits described in the FEHB Program brochures. The health plans often make Preferred Provider Agreements and other arrangements with providers which are contractual arrangements between the carriers and the providers. Because of the discounts that a plan realizes through its contracts with PPO providers, the plan is able to reimburse a higher percentage of the negotiated PPO allowance when PPO providers are utilized. It would not be cost effective for the plan to reimburse at the higher level when the provider is not giving a discount. Furthermore, much of the benefit you receive from using PPO providers comes from the PPO provider's agreement not to bill you for more than the negotiated PPO allowance. Non-PPO providers are under no such obligation. In some areas of the country, it is much more difficult for a plan to arrange PPO contracts for all types of services. In areas where there are no PPO providers, you can still receive your plan's regular benefits, as opposed to the incentivized PPO benefit.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • Mary J. is a single parent with one child who will turn age 26 at the end of March. She wants to maintain her Self and Family coverage until that time. The loss of an eligible child is a QLE, and changing her coverage from Self and Family to Self Only is on account of and consistent with that QLE. At the end of March, Mary changes her coverage to Self Only. Michael M., a federal employee, has Self Only coverage and so does his wife, who is employed in the private sector. In June, she gives birth to their first child. Michael wants to cancel his FEHB coverage, saying that his wife has picked up family coverage that includes him and their new child. Michael's request is on account of and consistent with his QLE. Monique K. begins an approved period of leave without pay (LWOP) to attend school. She elects to keep her FEHB coverage, and incur an obligation to her employing agency. She may not change her FEHB coverage, but may change her premium conversion election. Agencies must determine acceptable documentation for a qualifying life event (QLE). Acceptable documentation includes birth and death certificates, marriage licenses, divorce papers, etc. When your QLE is one where documentation is not readily available the IRS has indicated that your certification of coverage under another health plan is sufficient.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • No. Federal retirement, thrift savings and life insurance benefits are not affected by participation in premium conversion.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • If you are employed in the Executive Branch of the Federal Government, are participating in the FEHB Program, and your pay is issued by an Executive Branch agency, you are eligible to have your FEHB premiums paid under the premium conversion plan.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.
  • The Judiciary Branch, U.S. Postal Service, and some smaller Executive Branch agencies with independent compensation-setting authority, have already implemented their own FEHB premium conversion plans; the employees of these entities will not participate in our premium conversion plan. At the present time, annuitants and compensationers whose FEHB premiums are deducted from annuities and benefits are not eligible to participate in premium conversion. There are special rules for reemployed annuitants.
    How well did this answer your question? Submit
    Submitting rating...
    Thank you for your feedback!
    An error occurred while trying to submit your feedback.
    Please try again later.


Total Count: 56, Number of Pages: 4, Page: 4
Control Panel