DROP ends on the termination date in your resignation letter. The Health Insurance Subsidy is a monthly payment toward health insurance, not a health plan, and it starts only after you retire and certify your coverage, never during DROP. Medicare comes at 65. If you keep a State Group Insurance plan, Medicare pays first, so the state advises enrolling in Parts A and B as soon as you are eligible and no longer working for the state.
The order of events
Here's the order things happen, from the end of DROP to Medicare:
DROP ends
On the termination date you set in your binding letter of resignation. You must end employment with every FRS employer before the Division of Retirement pays out your DROP account.
You retire
You have left every FRS employer and begin drawing your monthly retirement benefit.
The subsidy can start
Once you are retired and have certified your health insurance coverage to the state. It is never paid during DROP.
Medicare at 65
Your Initial Enrollment Period starts three months before the month you turn 65 and lasts seven months.
For the Medicare steps leading up to 65, in order, see the turning 65 page.
The Health Insurance Subsidy: what it pays and when it starts
The subsidy is a monthly payment that helps retired FRS members pay for health insurance. It is not itself a health plan, and you don't have to join your former employer's group plan to get it.
It is paid only after you have retired from the FRS and certified health insurance coverage to the state, and it is not paid while you are in DROP. It's up to you, or your surviving spouse, to apply for it with the Division of Retirement.
State Group Insurance retirees: the state's three rules
If you keep a State Group Insurance health plan after you retire, the state sets three rules you'll want to know. Read them in full on MyBenefits before you compare any private plan.
Medicare pays first
Once you are eligible, Medicare pays first and the state plan pays second, even if you never enroll in Medicare. The state advises enrolling in Parts A and B as soon as you are eligible and no longer working for the state.
No separate Part D
If you are in the state's secondary health plan, don't add a separate Part D plan. The state's drug coverage is creditable, so keeping it avoids the Part D late enrollment penalty.
A cancelled plan cannot be rejoined
If you buy private Medicare Advantage, Part D or Medigap coverage, the state says to cancel the state group plan, and once it is cancelled you cannot enroll again later.
Curious how Medicare Advantage, Part D drug plans or Medicare Supplement work? Each has its own explainer. If you're a state retiree, though, read the third rule first.
MyBenefitsCounty, city and school-board retirees
Florida law requires counties, cities, special districts, community colleges and district school boards that offer group insurance to give their retirees the option of continuing in the group plan. Each of those plans has its own rules for how it works with Medicare, so ask your former employer's benefits office before you sign up for anything.
Two good questions to ask them: does the plan offer coverage that works with Medicare, and would you or your family lose the retiree coverage if you join a plan the employer doesn't offer?
If your employer coverage ends before you turn 65, here's what to know about health insurance before Medicare.
DROP money, rollover and tax questions
Questions about your DROP account, how it's paid out and its taxes go to the Division of Retirement and the MyFRS Financial Guidance Line. Those are money questions, separate from your Medicare and health insurance choices.
MyFRS Financial Guidance Line
1-866-446-9377
Questions people ask
What is the FRS Health Insurance Subsidy (HIS)?
The Health Insurance Subsidy is a monthly payment that helps retired Florida Retirement System members pay for health insurance; it is not itself a health plan. It pays $7.50 a month for each year of creditable service, at least $45 and at most $225 a month, as part of your monthly retirement benefit. Source: Florida Statutes 112.363 and MyFRS, 2026.
Is the HIS paid while I'm in DROP?
No. The subsidy is not paid while you are in DROP. It can begin only after DROP ends and you retire, meaning you have left every FRS employer and begun drawing benefits, and after you certify your health insurance coverage to the state. You don't have to join your former employer's group plan to get it. Source: Florida Statutes 112.363 and 121.091, 2026.
As a State of Florida retiree on the state health plan, should I sign up for Medicare Parts A and B?
The state advises it. For State of Florida retirees who keep a State Group Insurance health plan, Medicare pays first once you are eligible and the state plan pays second, even if you never enroll in Medicare. So the state advises enrolling in Parts A and B as soon as you are eligible and no longer working for the state. Source: MyBenefits, Florida Department of Management Services, 2026.
Do state retirees on the state plan need a separate Part D plan?
The state says no. If you are in the state's secondary health plan, don't add a separate Part D plan: the state's drug coverage is creditable, which Medicare.gov defines as coverage expected to pay, on average, at least as much as Medicare drug coverage. Keeping creditable coverage is what avoids the Part D late enrollment penalty. Source: MyBenefits and Medicare.gov, 2026.
Can a state retiree keep the state plan and buy Medicare Advantage, Part D or Medigap?
Not both, the state says. A State of Florida retiree who buys private Medicare Advantage, Part D or Medigap coverage should cancel the state group plan, and once it is cancelled it cannot be rejoined. Read the state's rule before you compare private plans. Source: MyBenefits, Florida Department of Management Services, 2026.
I retired from a county, city or school board. Where do my options at 65 come from?
From your former employer's own group plan. Florida law requires counties, cities, special districts, community colleges and district school boards that offer group insurance to give retirees the option of continuing in their group plans. Each plan has its own rules for how it works with Medicare, so ask your plan's benefits office before you sign up for anything. Source: Florida Statutes 112.0801, 2026.
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