CHAMPVA and FEHB: keep both or drop one?

Who pays first

CHAMPVA is a payer of last resort. Where you hold both, your FEHB plan pays first and CHAMPVA pays second, picking up cost-sharing the FEHB plan leaves behind.

In practice that often means very small out-of-pocket costs on covered care, because CHAMPVA is absorbing the deductible and coinsurance your health plan would otherwise leave with you.

Is holding both worth it?

The honest answer is that it depends on the premium and on who is covered.

• Keeping both buys the widest provider access and the lowest cost-sharing. You pay the FEHB premium for that.
• CHAMPVA alone has no premium, but it is secondary by design and has narrower rules than a full FEHB plan.
• Who else is on the enrollment matters most. If your FEHB covers a spouse or children who are not CHAMPVA eligible, dropping FEHB drops their coverage too. That one decision has ended far more coverage than people intend.
• Medicare changes the arithmetic again once you are 65, since CHAMPVA requires Medicare Part B for most beneficiaries at that point.

The suspension rule

This is the part that matters, and it is the difference between a reversible decision and a permanent one.

• Annuitants, survivor annuitants and former spouses who are CHAMPVA eligible may suspend FEHB rather than cancel it.
• The premium stops while the enrollment is suspended.
• You can reenroll during any future Open Season, for any reason.
• If you lose CHAMPVA involuntarily, you can reenroll immediately. The request has to reach your retirement system in the window from 31 days before to 60 days after the CHAMPVA coverage ends.
• The paperwork is form RI 79-9, with a copy of your CHAMPVA authorisation card.

Cancelling, by contrast, is final. An annuitant who cancels FEHB cannot reenroll, ever.

If you are still working

Employees cannot suspend. The option simply does not exist while you are employed.

You can cancel, and the consequence is different from an annuitant's: an employee who cancels can return during a future Open Season, or immediately on an involuntary loss of CHAMPVA. If you are in premium conversion, which most employees are, becoming CHAMPVA eligible is not a qualifying life event, so cancelling has to wait for Open Season.

Given that cancelling as an employee saves a premium but puts the five-year clock at risk, think carefully before doing it near retirement.

Protecting the five-year rule

To carry FEHB into retirement you need coverage for the five years immediately before you retire. CHAMPVA coverage counts toward that five-year requirement, provided you are an FEHB enrollee when you retire.

Read that twice, because both halves matter. CHAMPVA time fills the five years, and an FEHB enrollment on the day you retire is still required. Someone who drops FEHB entirely in their final working years and retires on CHAMPVA alone has closed the door.

Getting back in

• From suspension: any Open Season, or immediately after an involuntary loss of CHAMPVA within that 31-day-before to 60-day-after window.
• From cancellation as an annuitant: you cannot.
• Keep the confirmation. Whatever you file, keep the dated copy. Suspension and cancellation are a tick apart on the same form.
• Say the word "suspend" explicitly when you speak to OPM Retirement Services, and confirm in writing what was processed.

Common questions