By: Bob Braunstein, Federal Benefits Specialist
Published: September 2020
Military retirees who retire from the Federal civilian service have a little-known health insurance option that may be too good to pass up. For a very low cost, they have the ability to expand their health insurance networks beyond Tricare to include an FEHB program. And when the FEHB coverage is no longer needed, they can suspend paying for it. To have this option, one would need to be under active FEHB coverage upon retiring from civilian service. FEHB coverage in retirement for non-military retirees typically requires having the coverage for at least 5 continuous years immediately prior to separating/retiring. But, if one has Tricare, this coverage is included in the 5 years provided they are also covered by an active FEHB plan when they retire.
Many military retirees, particularly those who remain in urban areas, usually have access to quality care and all the providers they need through their Tricare coverage. But those who retire and live in more remote geographic locations may not have the same access. If a service provider is available in their local Tricare network, but they would prefer engaging one who is not, they would have to pay for the services of this provider out of their own pockets. But with the ability to activate suspended FEHB coverage, they could opt for a plan that covers this specialist, and most of the costs for the provider’s services would be covered by the plan. In addition to monthly premiums that would be due for plan coverage, subscribers to FEHB plans are also responsible for copays for provider visits, an annual deductible (individual or family), and coinsurance for certain procedures. When no longer needed, the subscriber can once again suspend the FEHB insurance. So, in essence, you only pay for the FEHB coverage if and when you need it – while it is suspended, it is cost-free.
Military retirees who are interested in this FEHB “Ace in the Hole” option when they retire from Federal civilian service might consider the following strategy for obtaining it just prior to their retirement date:
- During the Open Season just prior to retirement (which would be on January 31st of the next year as opposed to December 31st of the immediate year), sign up for the least expensive, high-deductible FEHB plan offered.
- Be certain to enroll under the coverage you would later need (e.g., if you are married without children, you would enroll in self-plus one coverage; if you have a family with young children, enroll in family coverage because the children can remain covered until 26 years of age).
- The plan activates during the first full pay period in January, and the premium for your coverage will be deducted from your next paycheck. (The employee share of the premium is approximately 25 to 28% of the total premium; the government pays the larger share of the premium.)
- Upon retirement, inform OPM that you have Tricare and request that they suspend your coverage.
(Note: When you retire, and your FEHB coverage is suspended, you pay nothing for it. When you retire after the leave year ends, you can only be paid for your leave ceiling and any accumulated leave earned in the current leave year. So, make sure you use all of your use or lose prior to the end of the last leave year. You will make up most if not all of the difference for not receiving the use or lose in your lump sum annual leave check by receiving an extra month’s pay. You will also have two additional pay periods to make TSP contributions and continue your ability to pay health, dental/vision, and flexible spending account premiums on a pretax basis up until the day you retire.)
Once retired from Federal civilian service, if you ever need to extend your health coverage network, you would be able to unsuspend your FEHB and elect ANY FEHB plan during a scheduled annual Open Season. Your FEHB coverage would become effective on January 1 of the next year. When you no longer need it, you can notify OPM that you are returning to Tricare, and they will resuspend your FEHB coverage at the end of the month in which they receive your request. You can re-enroll/suspend FEHB coverage as often as you would like and only pay premiums for FEHB coverage while you are actively using it. All fees for service plans like Blue Cross Blue Shield, Aetna, and others are available in most locations. More local health maintenance organizations would also be open to you in given locations. While you can suspend FEHB coverage at any time during the year, you only can enroll during an FEHB annual Open Season (typically during the first two weeks in November through the first two weeks in December each year), and coverage becomes effective on January 1st of the next year. You can suspend unneeded coverage by calling OPM’s Retirement Information Office at 1-888-767-6738. They will send you a form to complete together with instructions regarding other necessary documentation to suspend/resuspend your coverage. Also, remember:
- you can only suspend your FEHB coverage once you are retired from Federal civilian service
- you cannot suspend FEHB coverage while you are a Federal employee
- when you suspend coverage under FEHB, the coverage of all of your family members is suspended as well
- for your surviving spouse and other eligible family members to be eligible for FEHB re-enrollment should you predecease them, you must be enrolled in a manner that covers them when you suspend it (and if your spouse is not a Federal employee, you must elect a survivor annuity for him/her when you retire to ensure they can keep the coverage if you pass away first)
Some frequently asked questions about the Tricare/FEHB option are listed below. These and similar FAQs are available at www.opm.gov/faqs:
After I complete my suspension form and submit all necessary documentation showing my eligibility for TRICARE, when will my suspension become effective?
If the documentation showing your eligibility for TRICARE is received within the period beginning 31 days before and ending 31 days after the date you designate as the day you want to use TRICARE instead of FEHB coverage, the suspension becomes effective at the end of the day before the day you designated. Otherwise, the suspension becomes effective at the end of the month in which we receive your documentation.
After I suspend my FEHB coverage (to use TRICARE), when can I re-enroll in the FEHB Program?
You can re-enroll in the FEHB Program for any reason during a future Open Season. If you are involuntarily disenrolled from TRICARE, you are eligible to immediately re-enroll in the FEHB Program. Your request to reenroll must be received within the period beginning 31 days before and ending 60 days after your TRICARE coverage ends. Otherwise, you must wait until Open Season.
Once retired from Federal civilian service, can my spouse or I suspend our own individual FEHB coverage while allowing the other and/or covered family members to continue coverage under the FEHB Program?
No. When you suspend coverage, coverage of all family members is suspended as well.
Can actively working civil service employees suspend their FEHB coverage to use TRICARE or TRICARE-for-Life?
No. Employees may not suspend their coverage. However, they can cancel their coverage to use TRICARE or TRICARE-for-Life. If an employee who canceled FEHB coverage to use TRICARE or TRICARE-for-Life decides to return to FEHB coverage, the employee can do so during a future Open Season. If the employee loses TRICARE or TRICARE-for-Life coverage involuntarily, the employee can immediately reenroll in the FEHB Program.
Are there things to consider before an employee cancels his/her FEHB coverage to use TRICARE or TRICARE-for-Life?
Yes. There are a few things an employee should consider. First, to be eligible to continue FEHB coverage after retirement, a retiring employee must be enrolled or covered under the FEHB Program for the five years of service immediately before retirement, or, if less than five years, for all service since the first opportunity to enroll. Employees can count their coverage under TRICARE toward meeting this requirement. However, the employee must be enrolled in an active FEHB health plan on the date of retirement to continue coverage. Second, if the employee dies when the cancellation is in effect, any surviving spouse (who is not also a Federal employee or retiree) will not be eligible to continue FEHB health benefits coverage.
Mr. Braunstein is a retired Federal employee who was last employed as a Senior Human Resources Consultant with the Office of the Comptroller of the Currency (OCC) at the Department of the Treasury. During his Federal career, he served in a full range of HR positions spanning recruitment, staffing, employee relations, retirement and benefits, and position classification/management disciplines. He is a seminar presenter for NITP.