Whether a spouse keeps certain federal benefits after a retiree passes away depends on the elections made at retirement. A survivor annuity election continues a portion of the pension to the spouse and preserves their FEHB coverage; without that election, FEHB ends when the retiree passes away. If the spouse passes away first, the annuity withholdings paid toward that coverage are lost.
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A lot of federal employees go through retirement planning focused on their own income and coverage without really thinking through what happens to their spouse if they pass away first. It's an important question, and the answer depends on the elections you made.
Some benefits do carry over depending on what you elected. If you chose a survivor annuity at retirement, your spouse continues to receive a portion of your pension after you pass. They can also keep FEHB coverage, but only if you elected a survivor annuity. Without that election, FEHB coverage for your spouse ends when you pass away.
It's also important to remember that if your spouse passes away before you, the annuity withholdings are lost and there's no way to get that money back.
This is one of the bigger decisions you make at retirement, and the impact lasts for the rest of your spouse's life. Understanding exactly what your spouse would and wouldn't receive before you finalize your elections is time well spent.
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