United States

Office of

Personnel Management

The Federal Government’s Human Resources Agency

Retirement and Insurance Service

Benefits Administration Letter 

Number: 01-105 Date: April 26,2001 

Subject: Federal Employee Health Benefits (FEHB) enrollment transfers

between the U.S. Office of Personnel Management (OPM) and

agencies for the purposes of Health Benefits Premium Conversion

(HB-PC).

Purpose: Provide procedures to:

Transfer FEHB coverage from OPM to the employing agency when:

• An annuitant with FEHB coverage through OPM is reemployed in an

appointment that conveys FEHB coverage, and the employing office

participates in HB-PC, and the reemployed annuitant does not waive

premium conversion, or;

• A survivor annuitant with FEHB coverage as an annuitant is employed

in an appointment that conveys FEHB coverage, and the employing

office participates in HB-PC, and the survivor annuitant requests the

coverage be transferred to the employing agency in order to participate

in premium conversion;

Transfer FEHB coverage from the employing agency to OPM when:

• The employment of a reemployed annuitant or an employed survivor

annuitant with FEHB coverage through the employing agency ends;

Civil Service Federal Employees Federal Employees Federal Employees

Retirement Group Life Health Benefits Retirement

System Insurance Program System
Cancel FEHB coverage with OPM when:

• An annuitant with coverage as an annuitant requests that OPM cancel

the annuitant’s enrollment because his or her Federally employed

spouse wishes to pick up family coverage through the employing

agency in order to participate in premium conversion. When the

spouse’s employment ends, the annuitant’s cancelled coverage can be

reinstated.

Background: OPM implemented HB-PC, i.e., premium conversion, for Federal

employees. Premium conversion is a type of “cafeteria” plan allowed by

the Internal Revenue Code under which employees pay their share of

health benefits premiums with pre-tax dollars. This means health benefit

premiums are paid before deductions are computed for Federal income,

Medicare or Social Security taxes and most state and local income taxes. 

Payment of health benefits premiums in pre-tax dollars lowers the amount

of taxable income, so less tax is withheld and paychecks are larger.

Because Internal Revenue rules require premiums to be deducted from the

pay of an employee to qualify for premium conversion, this benefit is not

available to Federal retirees as annuitants. Annuitants can only participate

in HB-PC if they or their spouses are employed by the Federal government

and their health benefits premiums are deducted from their Federal

salaries.

Effective with the first pay period that began on or after October 1, 2000,

Executive Branch agencies implemented HB-PC for Federal employees. 

Before October 1, 2000, OPM maintained health benefits enrollments and

deducted premiums for reemployed annuitants and survivors. In order for

these individuals to participate in premium conversion, their FEHB

enrollment must be transferred from OPM to their employing agencies.

Procedures:

Reemployed Agency Procedures for Reemployed Annuitants

Annuitants

When an annuitant enrolled in FEHB is reemployed in a position that

conveys FEHB eligibility in an agency that participates in HB-PC, unless

the annuitant waives participation in premium conversion as of the

effective date of reemployment, the agency will:

• Notify OPM of the reemployment via e-mail at

HBPremiums@opm.gov, including the individual’s name, date of

birth, social security number, retirement claim number (if known) and

effective date of reemployment. OPM will respond with the current

FEHB enrollment code and confirmation that FEHB premiums from

annuity will end the day before the effective date of reemployment;
• Upon receipt of OPM confirmation and the current FEHB enrollment

code, transfer in the health benefits as of the date of reemployment;

• Start deducting health benefits premiums on a pre-tax basis on the

effective date of reemployment;

• The reemployed annuitant may still waive participation in premium

conversion by submitting a waiver to the agency within 60 calendar

days after the effective date of reemployment. A waiver submitted

after the effective date of reemployment will be effective on the first

day of the first pay period after the date the employing office receives

it.

• If health benefits have already been transferred to the agency when a

waiver is received (within the 60 days), the agency will stop

withholding health benefit premiums from salary as of the effective

date of the waiver, notify OPM via e-mail at HBPremiums@opm.gov,

and forward the hard copy of the waiver to OPM, Retirement

Operations Center, P.O. Box 45, Boyers, PA 16017. (Note: The

waiver must contain the effective date).

OPM Procedures

When an agency notifies OPM that an annuitant who is participating in

FEHB and has not submitted a waiver is reemployed, OPM will:

• Stop deducting health benefits premiums on the effective date of

reemployment; and,

• Notify the annuitant that OPM no longer maintains the FEHB

enrollment.

If OPM subsequently receives a waiver, we will resume deducting health

benefits premiums from the individual’s annuity as of the effective date of

the waiver. (Note: The waiver must contain the effective date).

Separating Agency Procedures for Separating Reemployed Annuitants

Reemployed 

Annuitants When a reemployed annuitant whose health benefit premiums are

deducted from salary separates from active service, the agency must:

• Notify OPM via e-mail at HBPremiums@opm.gov, and include the

individual’s name, date of birth, social security number, retirement

claim number (if known), current health benefits enrollment code, and

effective date of separation; and,

• Forward all original file copies of health benefits documents to OPM,
Retirement Operations Center, P.O. Box 45, Boyers, PA 16017.

OPM Procedures

When an agency notifies OPM of the separation from active service of a

reemployed annuitant whose health benefit premiums are deducted from

salary, OPM will:

• Transfer in the individual’s health benefits coverage and start

deducting premiums on the day following the effective date of

separation.

• Notify the annuitant and the health plan that OPM now maintains the

individual’s FEHB enrollment.

Employed Agency Procedures for Employed Survivor Annuitants

Survivor

Annuitants When a Federally-employed survivor annuitant requests a transfer of

FEHB enrollment to the employing agency in order to participate in HBPC, the agency will:

• Transfer in the individual’s enrollment and start deducting FEHB

premiums on a pre-tax basis as of the first pay period beginning after

the employing office receives the enrollment request that follows a pay

period during which the survivor was in pay status; 

• Notify OPM via e-mail at HBPremiums@opm.gov to stop deducting

FEHB premiums. The notification must include the individual’s name,

date of birth, social security number, enrollment code, retirement claim

number (if known), and effective date of health benefits coverage with

the agency.

Note: While the survivor annuitant maintains FEHB enrollment as an

employee, his/her current spouse can be covered. However, when the

survivor annuitant leaves Federal service and the enrollment is

transferred back to the retirement system under the survivor annuity, the

current spouse will no longer be eligible for coverage. If the survivor

annuitant is eligible for retirement in his/her own right, then he/she can

continue the family enrollment under the retirement account rather

than the survivor account. This preserves coverage for the current

spouse. 

OPM Procedures

When an agency notifies OPM that a Federally-employed survivor

annuitant has requested a transfer of FEHB enrollment to the employing

agency in order to participate in HB-PC, OPM will:
• Stop deducting FEHB premiums on the day the agency begins

deducting premiums;

• Notify the survivor annuitant that OPM no longer maintains the FEHB

enrollment.

Canceling Annuitants with FEHB family coverage may cancel their own enrollments

FEHB with OPM in order to be covered under an employed spouse’s family

Enrollment enrollment at a Federal agency.

Annuitants Agency Procedures for Annuitants With Family Enrollment

With

Family When an annuitant enrolled in FEHB self and family coverage cancels

Enrollment enrollment at OPM in order to be covered by a spouse’s self and family

coverage at a participating agency, the agency will:

• Determine the effective date of health benefits coverage with the

agency. (Note: The effective date is the beginning of the first pay

period after the employing office receives the enrollment request that

follows a pay period in which the employed spouse was in pay status);

• Withhold premiums from the employed spouse’s salary;

• Notify OPM via e-mail at HBPremiums@opm.gov so we can cancel

the enrollment and stop deducting premiums from the affected annuity.

The agency notification must include the annuitant’s name, date of

birth, social security number, retirement claim number (if known) and

effective date of self and family coverage with the agency.

OPM Procedures

When an agency notifies OPM that the spouse of an annuitant has enrolled

in FEHB self and family coverage, OPM will:

• Cancel FEHB enrollment and stop deducting health benefits premiums

on the day the agency begins deductions. (Note: This type of

cancellation action will allow reinstatement of the annuitant’s

FEHB enrollment in the future).
End of Family Agency Procedures After Family Enrollment Ends

Enrollment

When an annuitant’s spouse ends the self and family enrollment at the

agency (i.e., separates from Federal service, cancels the enrollment, etc.),

the agency must:

• Notify OPM via e-mail at HBPremiums@opm.gov,

• Provide OPM the annuitant’s name, date of birth, social security

number, retirement claim number (if known) and the effective date that

family enrollment ended.

OPM Procedures

When the agency notifies OPM that the family enrollment of an

annuitant’s employed spouse has ended, and the annuitant wants to

reinstate his or her FEHB enrollment, OPM will:

• Reinstate the annuitant’s health benefits and start deducting premiums

on the day after the family enrollment ended.

• Notify the annuitant and the carrier that the family enrollment is once

again maintained by the original annuitant.

Note: If the employed spouse retires from Federal service and is eligible

(and elects) to continue the FEHB enrollment on his or her own annuity,

OPM will transfer-in that family enrollment and deduct the health benefit

premiums from that annuity.