Health Insurance Secret for Retired Military Federal Employees: Suspend FEHB to use Tricare
The Federal Employees Health Benefits (FEHB) program serves as a crucial healthcare resource for Feds, both current and retired, including those with a military background. FEHB offers a broad spectrum of health insurance plans to choose from, tailored to the diverse needs of federal workers. However, if you are a retired military federal employee, you may also have access to TRICARE, the military healthcare program. In this article, we will review how you can pick between them without losing eligibility, helping you understand your options and make informed healthcare decisions during your retirement.
Understanding FEHB and TRICARE
FEHB is a part of the federal benefits program that provides comprehensive healthcare to employees and retirees. It provides various plan options, such as health maintenance organizations (HMOs) and high deductible health plans, ensuring flexibility and choice in healthcare coverage. On the other hand, TRICARE is a healthcare program for active-duty, reserved, and retired military personnel and their families. TRICARE offers different options depending on your military service and age. It may be an attractive option for retired military federal employees due to its cost-effective benefits.
FEHB Eligibility Requirements for Retired Military Federal Employees
To transition from FEHB to TRICARE, it’s essential to understand the eligibility requirements. Typically, employees are required to maintain FEHB coverage for 5 years prior to retirement in order to keep FEHB in retirement. However, since most active retired military federal employees tend to utilize Tricare Prime during their Federal service, they assume that they are not eligible to keep FEHB in retirement. THIS IS NOT TRUE!
Active enrollment in Tricare for the last 5 years of your FERS civilian service will satisfy the requirement. However, the key is that you have to be enrolled during FEHB open season. A good idea is to sign up for FEHB coverage to use during the last year of your civilian service. After you retire, you can suspend FEHB coverage to continue using Tricare.
Why Suspending FEHB Makes Sense
Maintaining Flexibility: Suspend Your FEHB Coverage
The biggest advantage is keeping your healthcare options open. You may be satisfied with Tricare for now. However, if you were to move to another area, it may not be as widely accepted. You will be able to reenroll in the FEHB program if necessary. The Federal Employees Health Benefits Program states that you can suspend their FEHB coverage to switch to Tricare or CHAMPVA. That also means you are free to switch back if your situation changes.
Medicare Decision
Because Tricare for Life requires you to sign up for Medicare Part B, it is best that you are enrolled in Medicare B at age 65 or retirement from civilian federal service, whichever is later. However, Medicare B is only required by Tricare or Tricare-for-life. If you want to avoid paying for Medicare B, you can enroll in FEHB only.
Review Your Plans Before You Retire from Federal Service
Healthcare is a significant decision for when planning your Federal Retirement. Tricare & FEHB each of their advantages. While FEHB offers many healthcare options, TRICARE can provide cost-effective benefits. By understanding the eligibility requirements, the suspension strategy, and plan for Medicare, you can make informed decisions to ensure the best possible healthcare coverage in your retirement years.
Additional Resources
For more information and assistance, here are some helpful resources:
Reach Out to Us!
If you have additional federal benefit questions, reach out to our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we focus on retirement planning for federal employees. Learn more about our process designed for the career federal employee.
Preparing for a federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Interested in having PlanWell host a federal retirement seminar for your agency? Reach out, and we can collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.
