Guides · Updated September 8, 2026
How Federal LWOP Affects Your Benefits and Retirement
Find out which federal benefits keep running during LWOP, which need premium payments, and the time limits on health, life insurance, and retirement credit.
If you're weighing an unpaid stretch away from work, the first question is usually whether your health coverage survives it. The short answer: approved leave without pay (LWOP) is an authorized absence, so it doesn't end your employment relationship. Most benefits continue at first, but separate time limits can affect coverage, leave accrual, and service credit. Two clocks matter most: the accumulated nonpay hours that slow your leave accrual, and the calendar-year or 365-day counters that cap your retirement credit and health coverage.
This guide covers current federal employees in approved nonpay status. Employees who are AWOL, furloughed, or suspended follow different rules and aren't included here. The baseline below applies unless a specific program, such as FMLA, military service, or workers' compensation, sets its own continuation or credit terms.
How each federal benefit holds up during leave without pay
Nearly every program sets its own clock, so scan the row for each benefit you're enrolled in before your leave starts.
| Benefit or program | What happens during nonpay status | Time limit and any special-case rule |
|---|---|---|
| Health insurance (FEHB) | Coverage keeps running, but you must pay the employee share yourself or let it accrue as a debt collected once you're back in pay status | Coverage continues for up to 365 accumulated nonpay days. Returning to pay status for 120 consecutive days restarts the 365-day count. Employees covered by the Family and Medical Leave Act have the option to continue FEHB coverage after 365 days (USDA National Finance Center payroll bulletin); confirm the premium arrangement with your HR office. |
| Life insurance (FEGLI) | Coverage continues automatically at no cost to you for the first 12 months | After 12 months, free coverage ends, but you get a 31-day extension and the option to convert to an individual policy. Military service with reemployment rights under USERRA (the Uniformed Services Employment and Reemployment Rights Act) can extend coverage up to 24 months, though premiums apply once the free 12-month period is over, so confirm the exact cost with your HR office. |
| Dental and vision (FEDVIP) | Coverage stays active only if payments keep coming in | After two consecutive pay periods without enough pay to cover premiums, BENEFEDS bills you directly, and missing those direct payments ends the coverage. |
| Flexible spending accounts | New contributions stop, and what happens to your account depends on why you're on leave | Contact FSAFEDS to confirm your specific options during nonpay status. |
| Retirement service credit | Counts toward your annuity only up to a point each year | Up to 6 months of nonpay status per calendar year counts toward the service credit used for your annuity; time beyond that doesn't count. Ask your HR office how military duty or job-related injury absences are handled in your case (U.S. Coast Guard civilian HR guidance). |
| Annual and sick leave accrual | For full-time employees, each 80 hours of accumulated nonpay time costs one pay period of accrual | You lose one pay period's worth of annual and sick leave accrual for every 80 hours of nonpay status, then a new 80-hour count starts. Employees on other work schedules should ask their HR office how their accrual is calculated. |
| TSP contributions, matching, and loans | Your contributions and agency matching stop entirely. Loan payments pause too. | Contributions are based on your basic pay, so with zero basic pay, no employee or agency money goes in. Loan payments can be suspended for up to a year; if you don't resume payments or pay off the balance after that, the loan may be declared a taxable distribution (TSP Bulletin 20-2). Ask your TSP or HR office about your specific loan options, including any differences for military service. Assignments under the Intergovernmental Personnel Act (IPA) and full-time union service are exceptions: contributions and loan payments keep going. |
| Within-grade step increase waiting period | Nonpay time inside a waiting period can push the increase back | Nonpay time counts toward your waiting period only up to a limit that varies by your current step, so extended leave without pay delays the increase. Your HR office calculates your adjusted eligibility date. |
Confirm which rules apply to your absence first
Figure out what kind of LWOP you're taking first, since the rules change depending on the reason. Ordinary LWOP is approved discretionary nonpay status under your employing agency's own leave policy — it isn't defined by a particular reason or by having exhausted your paid leave, though some agencies, including the Coast Guard, do expect employees to use available annual leave before requesting it. If your absence falls under the Family and Medical Leave Act, active duty military service with reemployment rights, or a workers' compensation claim, the underlying statute or program can create an entitlement or a different continuation, premium, or credit rule for at least one benefit. Your employing office still verifies the documentation and administers the absence in these cases, so check with your HR office to confirm which category applies and how it changes the baseline rules below.
Getting LWOP approved and what the request should document
LWOP is generally an approved absence granted at your agency's discretion, not an automatic entitlement, so put your request in writing and route it through your chain of command. The U.S. Coast Guard's civilian HR office describes this as its own practice: LWOP differs from being absent without leave because it's approved in advance, and the agency normally expects employees to use up their annual leave first. Your request should state the reason, the expected start and end dates, and whether you plan to keep any benefits running. Once approved, keep a copy of the written approval and confirm with your HR office how the absence will be recorded. Routine leave is typically logged through everyday time-and-attendance coding, while extended LWOP more often generates a personnel action that becomes part of the record HR uses later to calculate leave accrual, service credit, and any premium debt.
Paying health premiums with no paycheck, and repaying any balance
Once you're in nonpay status, your agency keeps paying its share of your FEHB premium, but you still owe your share. Federal regulation (5 CFR 892.211) gives you three ways to cover it: pre-pay before the leave starts, pay directly out of pocket during the leave, or let the premium accumulate as a debt that comes out of your paycheck once you return. Direct payments and catch-up debt both go through your servicing payroll office, and if you choose the catch-up option, payroll withholds the unpaid premiums as soon as you're back in pay status. Respond to your agency's FEHB notice within 31 days (45 days if you live overseas), or your coverage ends automatically. Don't leave this decision until the last minute.
What resets each clock, and how long you need to be back in pay status
FEHB enrollment keeps running for up to 365 days of accumulated nonpay time, and that count doesn't have to be one continuous stretch. Federal payroll guidance from the U.S. Department of Agriculture's National Finance Center states that once you return to pay status for 120 consecutive days, you earn a new 365-day period of continuous enrollment. A return to duty shorter than that doesn't reset the count; your nonpay days keep adding toward the same limit.
Life insurance under FEGLI works on a similar idea, but with a shorter fuse. OPM's FEGLI handbook states that coverage continues at no cost for your first 12 months in nonpay status, then ends, with a 31-day extension during which you can convert to an individual policy.
Annual and sick leave accrual works differently. Nonpay hours accumulate across pay periods, and you lose one pay period's worth of leave accrual each time your running nonpay total reaches another 80-hour increment. Between increments, you keep earning leave normally, and the cycle repeats if your nonpay time keeps growing. Any leftover nonpay hours below 80 at the end of the leave year are cleared and don't carry into the next one.
How nonpay time reshapes creditable service, your service computation date, and step increases
Retirement credit follows its own six-month-per-calendar-year cap: nonpay time beyond that doesn't count toward the service you need to retire. Separately, OPM's Guide to Processing Personnel Actions explains that your agency adjusts your service computation date for leave accrual (SCD-Leave) once accumulated nonpay time crosses its own threshold. Within-grade step increases follow a third, independent calculation: each waiting period tolerates a limited amount of nonpay time before it stops counting toward the service you need to advance, separate from both the retirement cap and the SCD-Leave adjustment above. Uniformed military service performed with reemployment rights, and time linked to a compensable on-the-job injury, may qualify for different creditable-service treatment under the Guide, but your HR office has to confirm that your specific absence meets the documented eligibility and reemployment conditions before that exception applies.
Retirement savings contributions, agency matching, and your TSP loan
Both your Thrift Savings Plan contributions and the agency's Automatic (1%) and Matching contributions drop to zero for any pay period with zero basic pay, and missed contributions generally cannot be made up later, according to TSP Bulletin 20-2. If you carry a TSP loan, your agency can suspend loan payments for up to one year using Form TSP-41; once you return to pay status and the agency reports your end date, the loan is automatically reamortized on a new payment schedule. Two exceptions loosen this: employees on LWOP for an Intergovernmental Personnel Act assignment or as a full-time union officer keep contributing and keep their loan payments flowing, and employees on LWOP for military service can make up missed contributions under USERRA after they return.
What to confirm with your employing office
Before the leave starts, get in writing which benefits you're continuing, how you're paying premiums, and your approved start and end dates. In your first pay periods back, confirm that your service computation date was corrected, that any premium debt is being withheld correctly, and that your TSP loan payment schedule is accurate. This is general information, not legal or financial advice, so confirm your specific numbers with your benefits office or OPM before you make a final decision.
If this leave is really a trial run for leaving federal service altogether, the FedUp.work guide to a federal-to-private transition walks through the practical tradeoffs, and FedUp.work offers resume translation and matched-role search built for public-sector experience if you want a head start on what comes next.
Sources and further reading
- Effect of Extended Leave Without Pay (DoD/DCPAS benefits handout): A Defense Department civilian-benefits handout, not a governmentwide rule, walking through how extended nonpay status affects FEHB, FEGLI, TSP, and flexible spending accounts for DoD employees, including the 365-day health coverage limit and the 12-month life insurance limit.
- Leave Without Pay | U.S. Coast Guard Civilian HR: An agency administration example showing how the Coast Guard defines and approves LWOP as distinct from an unapproved absence; local expectations, such as using annual leave first, can vary by employing office.
- 5 CFR 892.211, FEHB payment options during nonpay status: The governmentwide federal regulation setting out the pre-pay, direct pay, and catch-up options for covering FEHB premiums while in leave without pay status.
- FEGLI Program Handbook (OPM): OPM's governmentwide handbook on federal life insurance, covering how long coverage continues in nonpay status and the conversion option once that period ends.
- Guide to Processing Personnel Actions, Chapter 6 (OPM): OPM's governmentwide guidance on creditable service, explaining the six-month-per-calendar-year cap on nonpay time and how it adjusts an employee's service computation date.
- TSP Bulletin 20-2, Effect of Nonpay Status on TSP Participation: The Thrift Savings Plan's governmentwide program bulletin on how nonpay status stops employee and agency contributions and pauses outstanding loan payments.
- FEHB During LWOP Notice of Intent Agreement (NIH): An agency administration example: NIH's own FEHB election form for employees entering nonpay status, showing how one employing office documents the terminate, direct-pay, or catch-up-debt choices.
Common questions about LWOP and your benefits
How long can a federal employee stay on LWOP?
Ordinary LWOP runs for the period your agency approves, based on your written request and your supervisor's judgment about the reason and the office's staffing needs. The U.S. Coast Guard's civilian HR guidance treats any stretch beyond 30 days as extended LWOP, which gets closer review to confirm there's a reasonable expectation you'll return to duty. That's one agency's example of how extended requests get scrutinized, not a limit that applies across the government.
How does LWOP affect my federal retirement savings?
Every pay period you're in nonpay status, your Thrift Savings Plan contributions and any agency automatic or matching contributions stop, since both are calculated from basic pay and there is none to withhold. If you have a TSP loan, payments can be suspended for up to a year. After that, you must resume payments or pay off the balance, or the loan may be declared a taxable distribution.
Does LWOP count as creditable service for retirement?
Yes, up to six months per calendar year. Nonpay status counts as creditable service toward your retirement annuity during that period. Time beyond six months in a calendar year is not creditable for retirement. If your absence was for military duty or a workers' compensation claim, ask your HR office how that time is treated, since those absences are handled under separate rules.
Can my supervisor deny an LWOP request?
Generally yes, since ordinary LWOP is granted at your supervisor's discretion rather than guaranteed. In some circumstances, such as military duty or a situation covered by the Family and Medical Leave Act, approval may be required by law rather than left to your supervisor's judgment. If you think your situation might qualify, ask your HR office to confirm which program applies and what you need to show to be covered.
What happens to my health coverage once the continuation limit runs out?
Your FEHB enrollment ends once you reach 365 accumulated days in nonpay status, and those days don't have to be consecutive: returns to pay status lasting fewer than 120 consecutive days don't reset the count. Once coverage ends this way, you can reenroll within 60 days of returning to pay status in a position where you're eligible for FEHB.
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