Working for the federal government has several benefits – many that are either not available or more expensive in non-government service, such as:
- incentive awards
- employee development programs
- student loan repayment programs
- retention allowances
- interagency transfers
… to name a few.
However, the focus of this article is on one specific benefit – retirement health insurance coupled with TRICARE.
Federal Employees Health Benefits Program (FEHB)
This is a group-type health insurance marketplace specific to federal government employees and their families. Under the program, around 180 health plan options are available across the United States. Out of these options, the average federal government employee usually has around a dozen or so that are applicable to choose from.
One commonly available plan currently charges $229.64 per month for individual coverage. Civilians not in a group plan typically pay four times or more for the same coverage. It is so expensive that some people cannot afford to retire when they would like, because they are not old enough yet to qualify for Medicare and can’t afford the price charged for non-employer sponsored health care insurance.
Under the FEHB program, no waiting period or medical exam is required to enroll in a plan. One advantage retirees from federal service have is if enrolled in the FEHB program before retiring, they can usually bring their same health insurance program with them into retirement. A similar option with the same company in the civilian world could impose either or both restrictions and in most cases cost considerably more.
Medicare
While federal employees do not pay in to social security, they are eligible for Medicare upon reaching age 65. At first glance this may not seem like much of a benefit at all, however Medicare Part A (hospital coverage) is free to most federal government retirees covered under OPM, the Railroad Retirement Program, or at age 65. Retirees not covered for free Part A pay $411 per month and it will increase to $413 per month in 2017.
However, federal government retirees drawing on their Part A do have to pay for Part B (Medical insurance) – as do all retirees. The amount is based on adjusted gross income and how taxes are filed: individual, joint, or married and separate. For 2017, the amount will vary from the lowest at $134.00 up to $428.60.
But for those that have to pay for Part A and B, it would cost from $547 to $841.60 per month for coverage.
TRICARE
If retired from military service and qualify for TRICARE, what effect does it have?
If under the age of 65, TRICARE can be used for health insurance coverage instead of joining the FEHB program. In many cases, the coverage is as good and may cost less.
Upon reaching age 65, retirees are eligible for TRICARE for Life. If drawing on Medicare Parts A and B, Medicare becomes your primary insurance and TRICARE for Life functions as your medical supplement, thus eliminating the need to purchase one. TRICARE for Life is free.
And with Medicare Parts A and B, TRICARE for Life has pharmacy coverage (with low co-pays), thus eliminating the need to purchase Part D.
If still working as a federal government employee and eligible for TRICARE or TRICARE for Life, be sure to explore all health insurance options before leaving federal service that are available to you and choose the best combination for your individual health coverage situation.
