For many military retirees who continue their career in federal service, understanding how to coordinate TRICARE and the Federal Employees Health Benefits (FEHB) Program can be the key to maximizing healthcare coverage while minimizing unnecessary costs. At United Benefits, we specialize in helping federal employees and retirees make sense of their benefit options and guide them toward the best choices for both the present and future. Let’s break down how TRICARE and FEHB work together and what you need to know for a smooth transition into retirement.
Understanding TRICARE
TRICARE is the Department of Defense’s health insurance program for active-duty service members, retirees, and their families. After military retirement, most are eligible for TRICARE Prime or TRICARE Select, and upon turning 65, they transition to TRICARE For Life (TFL) when enrolled in Medicare Part A and Part B. TRICARE’s coverage is comprehensive, but understanding how it integrates with other federal health insurance options, such as FEHB, is crucial to avoiding overlap and unnecessary expenses.
Understanding FEHB
The Federal Employees Health Benefits (FEHB) Program offers federal employees and annuitants access to a wide range of private health plans. Coverage continues into retirement as long as you’ve been enrolled for the five years preceding your retirement—or since first becoming eligible. FEHB plans include HMOs, PPOs, and high-deductible options, giving retirees flexibility in terms of providers and premiums. Importantly, you can carry FEHB into retirement even if you’re also eligible for TRICARE.
Coordinating TRICARE and FEHB Coverage
While both programs offer outstanding coverage, maintaining both can sometimes lead to duplication of benefits. Understanding how these two programs coordinate is critical for making informed decisions:
- Primary vs. Secondary Coverage: When you have both TRICARE and FEHB, the FEHB plan usually pays first, and TRICARE pays second, covering some or all of your remaining out-of-pocket expenses.
- Optional Coverage Strategy: Some retirees choose to suspend (not cancel) their FEHB coverage once they’re covered by TRICARE For Life. This suspension allows them to avoid paying monthly FEHB premiums while retaining the right to reenroll in FEHB later if their circumstances change.
- Retain FEHB for Flexibility: Maintaining FEHB coverage can be beneficial for those who live near medical providers who do not accept TRICARE or for anyone who wants additional provider network options.
TRICARE For Life (TFL) and Medicare Coordination
Once you reach age 65 and become eligible for Medicare, you transition from TRICARE Select or Prime into TRICARE For Life (TFL). In this setup, Medicare acts as your primary payer, and TFL pays most of what Medicare doesn’t cover. This can make carrying FEHB in addition to TFL seem redundant. However, maintaining or suspending FEHB coverage should be considered carefully.
According to the Defense Health Agency, more than 5.6 million individuals were enrolled in TRICARE as of 2023, showing how critical it remains for military families across the country (Defense Health Agency, 2023). With more retirees transitioning into federal service and later into Medicare, understanding this coordination is more important than ever.
FEHB Suspension Option for Retirees with TRICARE
Federal retirees with TRICARE For Life can suspend their FEHB plan rather than cancel it outright. This option is available because TRICARE is recognized as an eligible alternative coverage under the Office of Personnel Management (OPM) guidelines. By suspending FEHB, retirees avoid paying monthly FEHB premiums but keep the right to reinstate FEHB in the future—such as if they lose TRICARE eligibility or decide they need additional coverage options.
This suspension option is particularly attractive because reinstatement can occur during any open season or after a qualifying life event, without penalty. Retirees who choose to keep both may do so for reasons such as extra coverage for prescription drugs, access to specific doctors, or family coverage considerations.
Cost Considerations
Balancing TRICARE and FEHB coverage involves understanding premiums, copays, and deductibles. FEHB plans have monthly premiums that can range substantially depending on the plan selected. TRICARE, meanwhile, has lower premiums but requires enrollment fees for certain plans. When evaluating both, consider your health needs, dependents, and future healthcare locations—especially if you plan to relocate after retirement.
As of 2024, TRICARE Select family coverage had an annual enrollment fee of $537.60 for retirees, while TRICARE Prime family coverage had an annual enrollment fee of $744 (TRICARE.mil). FEHB premiums, on the other hand, vary widely but can easily exceed $5,000 a year for comprehensive family plans. These costs highlight the financial advantage that suspension of FEHB may provide for some retirees, though decisions should be based on total expected out-of-pocket costs and provider access.
Making an Informed Decision
No two retirees have the same needs, so there is no one-size-fits-all solution for coordinating TRICARE and FEHB. The right combination depends on your family situation, medical requirements, anticipated travel or relocation, and preferred healthcare providers. Before making changes, it’s wise to consult with a benefits specialist who understands both federal and military systems.
At United Benefits, we provide personalized federal benefits counseling to help you evaluate your options and ensure you’re making informed, strategic decisions. Our experts help federal employees, military retirees, and their families navigate enrollment periods, coverage questions, and planning for future transitions like Medicare eligibility.
Tips for Managing TRICARE and FEHB Together
- Review your FEHB plan during Open Season each year, even if you currently have TRICARE, to ensure you’re not missing potential savings or improved coverage options.
- Understand your family’s healthcare patterns—if you have dependents not eligible for TRICARE, maintaining FEHB may be essential.
- When you reach Medicare eligibility age, review how Medicare, TRICARE For Life, and FEHB interact before making final decisions.
- Speak with a United Benefits specialist to ensure your decisions align with both your immediate and long-term healthcare needs.
How United Benefits Can Help
Coordinating TRICARE and FEHB can seem daunting, but you don’t have to do it alone. Our team at United Benefits works exclusively with federal employees and military retirees to explain how these programs overlap and what strategies work best. Whether you’re just entering federal service after your military career or transitioning into full retirement, we can guide you through coverage coordination, plan selection, and premium optimization.
You can reach United Benefits at 866-558-2121, visit us at 3295 County Road 47, Florence, AL 35630, or explore more on our website https://unitedbenefits.com/. Our mission is to ensure that you enjoy peace of mind knowing your healthcare coverage is not only robust but also cost-effective.
Final Thoughts
For military retirees employed in federal service, coordinating TRICARE and FEHB coverage presents an opportunity to streamline healthcare benefits, reduce overlapping costs, and prepare for seamless transitions into Medicare and beyond. With informed planning and expert support from United Benefits, you can make the most out of both programs while protecting your health and finances for the future.