Author: Bob Braunstein, Federal Benefits Specialist

Are you military retired? Are you planning to retire from civilian service at the end of a year? Then this article is for you. During the next Open Season consider enrolling in an FEHB plan to gain your Ace in the Hole. Follow the instructions in this article and you will have additional health insurance in reserve for the rest of your life. You will only need to pay for it when needed.

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, sign up for the least expensive 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).  
• Instead of retiring on December 31 (before the FEHB Plan year starts) retire on January 31, the next year. The later retirement will ensure that you pay at least one premium for your newly activated FEHB coverage (whereas retiring in December would not allow the plan to become active before you separate and you would, therefore, not have the FEHB coverage).

When you retire, inform OPM that you will be suspending your FEHB coverage by downloading and completing form RI 79-9. If you are unable to download the suspension form, call OPM’s Retirement Information Office at 1-888-767-6738 and ask for a copy. Check box “D” on page 2 indicating you are suspending your coverage to use TRICARE.

• Once your coverage is suspended, there are no FEHB premiums to pay.
• You can unsuspend your FEHB coverage during any subsequent Open Season and enroll in any available FEHB plan.
• You can resuspend FEHB coverage at any time during the plan year.
• There are no limits as to how often you can suspend/unsuspend your FEHB coverage.

You can unsuspend FEHB coverage during any subsequent Open Season and choose any available plan. When you no longer need it, you can resuspend it at any time during the health plan year. You can do this as many times as you like, and you will pay FEHB premiums only when the coverage is active (unsuspended). But please remember: 

• You CAN only suspend FEHB coverage after retiring from Federal service; you CANNOT suspend FEHB coverage while you are a Federal employee.
• Suspending FEHB coverage suspends it for all eligible family members.
• For a surviving spouse to unsuspend FEHB, the suspended plan must have been for an enrollment that covered them (i.e., self-plus one, or family coverage). 
• For a surviving spouse to remain eligible to unsuspend FEHB coverage, you must elect at least a partial survivor annuity for them when you retire (unless they qualify on their own as Federal retirees or employees who will retire with FEHB eligibility).

(Note: Retiring at the end of the year is popular as it allows you to be paid for your accumulated annual leave ceiling and remaining use or lose leave if your last workday is no later than the last day of the leave year. Because the strategy in this article requires retiring after the leave year ends, those interested will only be able to carry their leave ceiling into the next year, i.e., all use or lose annual leave must be exhausted or it will be forfeited. The lower lump sum payment is generally offset by the additional month at salary (most of it at the January pay-raised rate). This will increase your high-3 average salary and give you an additional month of creditable service and, thereby, increase your retirement annuity. And let’s also not forget the two additional pay periods you will have to make direct contributions to your TSP account, and pay your health, dental, and vision premiums with non-taxable income – benefits that you lose when you are retired.)

Below are some of the frequently asked questions about the TRICARE/FEHB option available at Insurance FAQs (opm.gov): 

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 reenroll in the FEHB Program?

You can reenroll in the FEHB Program for any reason during a future Open Season. If you are involuntarily disenrolled from TRICARE, you are eligible to immediately reenroll 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 I or my spouse 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.

Bob 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 retirement and benefits presenter for NITP.