QDRO Corner: Federal Employee’s Health Benefits Program - Former Spouse

A former spouse of a federal employee can continue to receive health insurance coverage under the Federal Employee’s Health Benefits Program if they meet certain requirements and filing deadlines. One requirement is that the former spouse is covered on the employee’s or retiree’s plan for a period prior to the divorce. As such, the whole process necessitates careful consideration.

A former spouse’s coverage under the employee/retiree’s plan ends as of the date of divorce. It is the responsibility of the parties to notify the government of the divorce. If the spouse is an employee, then their agency’s Human Resources department must be notified. If the spouse is a retiree, then OPM must be notified.

If applying timely for continued coverage under FEHB, the former spouse’s coverage under the employee/retiree’s health care plan will continue, at no cost to either party, for 30 days following the divorce.

The former spouse has 60 days from the date of divorce to file Form SF2809 to request continued health insurance coverage. The coverage will be retroactive to the 31st day after the date of divorce, so there is no lapse of coverage. The former spouse has options of Spouse Equity or Temporary Continuation of Coverage for the basis of continuing their coverage under FEHB.

If the former spouse is seeking continued coverage under the Spouse Equity provisions, one of the requirements is that the former spouse be entitled to receive a portion of the spouse’s pension. This entitlement is evidenced by the letter from OPM accepting a Court Order Acceptable for Processing. The Court Order Acceptable for Processing is the “QDRO” equivalent for federal pensions. It should be prepared before or at the time of the divorce, and presented to OPM as soon as possible thereafter. OPM will take a few months to review the Court Order Acceptable for Processing and ultimately issue the acceptance letter needed for Spouse Equity FEHB coverage.

The time it takes OPM to review the Court Order Acceptable for Processing is longer than the 30-day automatic coverage extension. As a means to prevent a lapse in coverage, the former spouse can initially apply for Temporary Continuation of Coverage (TCC). TCC coverage lasts up to 36 months, and does not require any award of the employee/retiree’s pension.

Accordingly, the former spouse can begin TCC coverage on day 31 following the divorce and remain covered thereby until OPM accepts the Court Order Acceptable for Processing. Then the former spouse can apply to change coverage from TCC to Spouse Equity. It has no practical effect on the coverage, just whether or not the coverage will end automatically after 36 months of coverage or if coverage will continue for so long as the former spouse continues to meet the eligibility requirements.

Under both TCC and Spouse Equity continuation, the former spouse is required to pay the full premium for the health insurance coverage selected; the government will not pay a portion of the coverage like they do for the employee/retiree. Many times the full coverage is quite expensive, so it is a good idea to review those costs to ensure this path for health insurance coverage is the right one for the former spouse.