Choosing between FEHB and TFL

By on March 6, 2012 in Current Events, Retirement with 38 Comments

Editor’s note: This is the second article in a two part series.

In Part I, What is TRICARE for Life, we talked about the very basics of that program.

Where it begins to get a little complicated is when a person who is eligible for TRICARE (and most likely eligible for TRICARE for Life), is also eligible (based upon their employment) for health coverage under the Federal Employees Health Benefits (FEHB) program.

These folks are not only dually eligible, they’re dually blessed.  They actually have some choices.  Providing they are otherwise eligible to continue their FEHB coverage into retirement, and providing they enroll in Medicare Parts A and B so that they can retain the option to move from TRICARE to TRICARE for Life, they can actually choose between the two.

Retirees and survivor annuitants who are covered by the FEHB and who are also eligible for TFL can suspend their FEHB enrollment when they sign up for Medicare Part B as a result of their enrollment in TFL.  By officially suspending their FEHB enrollment through OPM, they can retain their right to re-enroll in FEHB should they become dissatisfied with TFL.

Officially suspending FEHB enrollment to enroll in TFL can save at least one monthly premium.  The TFL beneficiary will only be required, in most cases, to pay the monthly Medicare Part B premium, thereby saving the monthly FEHB premium.

The key word for retirees is “suspend”.  Retirees who cancel their FEHB coverage will likely never be able to re-enroll in the program again.  Annuitants can call the OPM retirement information office at 1-888-767-6738 to obtain a copy of the official suspension form.

 

John Grobe’s latest book, The Answer Book on Your Federal Employee Benefits, has just been released by LRP Publications. The book is written in an easy to understand question and answer format and covers all areas of federal benefits from the perspective of an employee at various stages of their career. Order your copy at shoplrp.com.

© 2016 John Grobe. All rights reserved. This article may not be reproduced without express written consent from John Grobe.

About the Author

John Grobe is President of Federal Career Experts, a consulting firm that specializes in federal retirement and career transition issues. He is also affiliated with TSP Safety Net. John retired from federal service after 25 years of progressively more responsible human resources positions. He is the author of Understanding the Federal Retirement Systems and Career Transition: A Guide for Federal Employees, both published by the Federal Management Institute. Federal Career Experts provides pre-retirement seminars for a wide variety of federal agencies.

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  1. Walter Schminky says:

    My wife is 58 and not eligible for Medicare, how does this dual choice work in that situation? She needs my FEHB coverage. Also, can I suspend my FEHB at any time? How long can I suspend it before it “times out?”

  2. David_w says:

    my fehb kaiser policy premium went up about 30% last year and 33% this year. that is more dollars than are in my cola. i won’t starve over this, but it is just a little less fun than expected.

  3. Onesjc says:

    I am a Federal retiree with 34 years of service, age 62, married to a 65 year old retired E8 (with a small service connected disability) and a current federal employee (will retire next year).  He is covered by Medicare, TFL and the VA.  I use my FEHB that I carried into retirement and use Tricare Standard as my secondary.  I’m thinking that I need to continue paying my monthly FEHB premiums until I reach age 65 and will be eligible for TFL.  Is that the best and most cost effective plan for me?

  4. Jwhite038 says:

    Suspending the FEHB is the way to go.  I have been on TFL for 9 years and have not had a problem with it at all.  I also use mail order prescriptions and had only a few problems, mainly, their dropping a drug when I tried to fill it. I got another prescription from my doc for the same problem and they filled it. TFL is a great earned benefit.

  5. Zippy says:

    I retired a year ago at 71 under FERS.  I carried FEHB through retirement.  I had to sign up for Medicare B within 60 days of retirement (no one told me that), which I did.  I am also retired AFRES, so I qualify for TFL.  OPM sent a simple form where you say you are suspending (not cancelling) FEHB because of Tricare.  Tricare doesn’t send a card, like Medicare, so you have to show your military ID card as proof. So far this has not been a problem.  I just had a knee replacement that didn’t cost a dime.  Medicine is through Express Scripts by mail, which I use for 90 day orders.  On the other hand, my girlfriend is a retired teacher who never had Social Security taken out under the public employee state retirement plan.  She can’t ever get Medicare and even as my spouse I am told she would be denied Tricare.  I was paying about $185 for FEHB and now pay about $300 for Medicare B, whose premiums are based on your income from 2 years ago.  So it doesn’t level out immediately. But – no copay! 

  6. Mel says:

    I worked for the USPS, carried a FEHB plan until I retired at 66.  I then picked up Medicare A for myself and spouse at NC and suspended FEHB, relying on TFL.  As noted, I and my spouse must enroll in Med Pt B (at a present cost of about $100/ea/mo).  TFL in general, is reserved for fully retired military personnel and to date, is NC. 

    TFL has a prescription (local and by mail) program almost identical to FEHB but slight less cost. (Our combined pharma costs dropped from ca. $1800/yr under FEHB to about $1000/yr with TFL.  After 2-1/2 years on this program our total health care costs are less than under FEHB and any MD’s accepting Medicare have been pleased to accept TFL.  (The two run hand in hand and Medicare claims are promptly processed by CMS and then automatically kicked over to the TFL contractor who pays their share. 

    A side benefit:  under Medicare/TFL we have experienced almost zero “claim” problems.  Under FEHB we experienced several claim disconnects (mostly caused by doctors and hospitals incompetent business office personnel.)  It is my belief that while docs and hospitals may gripe about medicare reimbursement, they are pleased to see prompt payment with few gaffs, and they know from the git go what their income will be.  

    The annual threat to REDUCE Medicare reimbursement rates (I think mandated by some older Congressional legislation) is a concern to docs/hospitals and maybe should be put to bed with newer legislation so we don’t hear about this annual problem in the news. 

  7. Scode says:

    What is your choice between 60 and 65?  Anyone know?

    • Nonfednowfed says:

      You can suspend FEHBP and use Tricare as long as you are retired from your Fed job. I use Tricare Prime and had to cancel FEHBP since I am still working. I can get back into the FEHBP during open season. I plan to do this the year I will retire. Then, when I retire, I will suspend the FEHBP thereby keeping my right to sign up for it if this government decides to once again break it’s promise to us by making Tricare so expensive that it is no longer a benefit. This President has stated that this is what he would like to do. We must all contact our members of Congress to ask that they not support this type of plan.

  8. Rwpirie2 says:

    I have FEHB now with coverage through an HMO (Kaiser).  I would like to know how Medicare and TFL treat HMO’s.

  9. Apshah42 says:

    I have medicare part A and B and FEHB. I visit doctors and hospital, medicare picks-up 80 % of schedule fee and balance is picked up by FEHB. Prescription medicine I pay co-pay $ 10 to $ 35. My question is how it will work if I suspend FEHB and enroll in TFL. I want to know what and how much it will cover doctor’s fee and prescription cost? And also how much I will save on insurance premium based on minimum medicare premium and basic FEHB Blue Federal (Anthem in Ohio) coverage ? How I can get more info @ TFL? Thanks. 

    • Nonfednowfed says:

      TFL has no premium and pays second to Medicare. My wife has it and never has a copay. Meds for 90 day mail orders are $0 generics. I don’t recall the cost for brand name and nonformulary meds, but you can find that on http://www.tricare.mil. You can also get sign up info there. Why stay in the high premium and co-pay FEHBP when you can pay very little with TFL? Suspend your FEHBP, as long as you are retired from your fed job, and then you can back into it at any time if you have to.

  10. John Hopping says:

    As a retiree over age 65, I pay $430 each month for fed private insurance and $200 for Medicare, and use TFL primarily for its supplemental prescription benefit. Each $100 medical procedure is approved first by medicare for about $70 of which they pay say $50 leaving the fed insurer as second payer to pay the remaining $20. Doc accepts the $70 total and I usually have nothing to little to pay. If it is not a preferred provider, TFL might pick up the difference that 1st MC and 2nd fed insurer did not pay, but I never know for sure how that works. We have a lot of script cost with the fed insurer paying first and TFL picking up the remainder (do not need to pay for MC Part D (?)scripts insurance). So we have chosen to pay a lot for it all because we have cancer care, osteoporosis, and heart care with the high cost of associated meds. If my spouse didn’t have the high cost of cancer treatment and looming osteo issues, and a concern that MC may not approve some treatments, we would probably suspend our fed insurance and rely on TFL and MC.

    A big issue to now consider will be the proposed cuts to MC and increased cost to keep TFL. Congress and Obama and DOD have proposed higher deductibles and co-pays that will add an additional $100 per month just to keep TFL (not to mention no future COLA and other cuts to our benefits, but that is another story).

    Screwball issue is that I still pay the same rate to the fed insurer ($430) but they now only pay about 20-30% of what they used to pay. Unless I am mistaken in my assessment, this appears to represent a huge boon to our federal program private insurers. It seems a more logical way to do this would be that we be allowed to continue after retirement with your selection of federal private insurance, use your earned TFL coverage, and use the $100-200 saved by not paying for MC and buy supplemental coverage if needed. And MC would probably have a net gain to be used elsewhere as needed.

    • Retired Fed says:

      “Screwball issue is that I still pay the same rate to the fed insurer ($430) but they now only pay about 20-30% of what they used to pay. Unless I am mistaken in my assessment, this appears to represent a huge boon to our federal program private insurers.”

      Fedsmith had an article not too long ago that said that even though retirees can get Medicare A and B, the cost to support retirees who do get MC A and B is not much less.  The yearly cost to private insurers were somewhere around ten grand for those opt not to get MC and about a thousand less for those who do.  So it is not a windfall for the insurers on people who choose to buy MC part B.  For the little savings that they do get when you opt for MC A and B is used to pay for the deductibles, copays and coinsurances.

    • Nonfednowfed says:

      I would consider suspending your FEHBP. My wife has TFL with no premium and mail order meds are very inexpensive. Medicare pays first and TFL picks up the remaining cost. Her 5 day hospital stay cost us $0. You can always get back into the FEHBP if Tricare doesn’t work for you, as long as you have first suspended it.

  11. MCRon64 says:

    What is TC Extra?  I have not heard of this before?

    • jhenjoh says:

      TC Extra is the HMO version of Standard. You are limited to a preferred provider from the TriCare Prime network list. Same deductible but copays are reduced 5%.

    • jhenjoh says:

      McRon64 and all: You might want to investigate TriCare Prime as provided by regional networks. For a complete discussion see the Johns Hopkins site at:
      hopkinsmedicine.org /usfhp/members_visitors /costs_benefits /tricare_plan_options.html

      It is an HMO-like plan. In order to stay in it when you become 65 after 30 Sept 2012, you need to be signed up by 1 Sept. Be sure you are OK in DEERS if there is any doubt of your eligibilty. In addition, you currently do not need to have Medicare B when you become eligible for it. Current premium: $260 per year individual, $520 family.

  12. MCRon64 says:

    Could you explain in a little more detail your comment concerning the cost for Medicare Part-B.  I thought the cost was the same for everyone…….

  13. MCRon64 says:

    At age 65 will I automatically be enrolled for Tri-Care For Life once I sign up for Medicare part B, correct?  Since my wife is several years younger than I am do I have to continue my FEHB for myself to maintain her insurance through FEHB?

    • jhenjoh says:

      Yes to your enrollment. See source at end of this remark. You should let them (TFL) know about you in any case.

      If you want her on FEHB you have to stay in the plan. However, as your dependent, she is eligible for TriCare Standard and TC Extra at age 60 as you are. At least that is how I interpret the explanation in ROA’s Time On Target article by CAPT Marshall Hanson, USNR (Ret), unknown date.

      • Rvready says:

        Your spouse is eligible for Tricare Standard/Extra, and/or enroll in TriCare Prime, at any age.  You don’t have to wait until you are 60.  At age 65 you are not automatically enrolled in TFL (Air Force anyway) .  You have to get a new ID and at that time they will enroll you into TFL.  As I understand it anyway.

    • Nonfednowfed says:

      My wife has been on Tricare since 58 years of age as my dependent. No need to pay the ridiculously high FEHBP premiums and co-pays. I recommend she use Tricare Prime.

  14. James Jarvis says:

    You may want to mention that when you sign up for Medicare B, your quarterly payments are predicated on your last years IRS statement of earnings.  I’m still employed but when I turned 65, the person I spoke to at Medicare informed me of this payment structure and that due to my salary last year, my quarterly payment was nearly a thousand dollars!  I elected NOT to take Medicare B and chose to continue with Blue Cross/Blue Shield.  This also cancelled my Tricare For Life unless I am admitted to a medical facility on a military base (I am a retired veteran).

    So, DEERS registration and TFS isn’t doing much for me after serving my country all these years.

    • jhenjoh says:

      Part B Monthly premium is based on yearly income.
      $99.90 Individual $85K or less
      $139.90 Individual >$85K to $107K
      $199.80 Individual >$107K to $160K
      $259.70 Individual >$160K to $214K
      $319.70 Individual >$214K
      $99.90 Joint $170K or less
      $139.90 Joint >$170K to $214K
      $199.80 Joint >$214K to $320K
      $259.70 Joint >$320K to $428K
      $319.70 Joint >$428K

    • Nonfednowfed says:

      I am told that the danger of not taking part B at 65 is that if you must at some time sign-up for it, you will pay not only all that you would have paid if you accepted it at 65, but also penalties. I suggest you check this at http://www.ssa.gov.

  15. Richard Jefferson says:

    Part Two should have been incorporated into part one.

    I myself am covered by Tricare so I did not opt for FEHB when I moved from military to CS. I had planned on enrolling about three years before CS retirement. But now I have had the chance to talk with other retired CS/Military since TFL when into effect and they could not be happier. Everyone of them have told me that have not paid one penny out of pocket outside of Part B, which you have to have for any secondary insurance anyway.

    I will say that the author has given me some food for thought. I may still enroll at the last minute possible just so that I can suspend it later just in case Congress screws around with TFL. It might be worth paying for three years just to have it on the back burner.

    • jhenjoh says:

      According to our HR/FEHB rep, you only need to be in FEHB the day you retire. That would only require enrollment for your last year if you retire on Jan 1. Or enroll the last open season before your retirment year if it will be effective later than January. A TriCare Prime (HMO) plan, as administered by contracting entities such as Johns Hopkins under their US Family Health Plan, does not require Medicare B enrollment for Medicare B eligible individuals at this time.

      As well, don’t forget the requirement to be on FEHB for five years before retirement. TriCare Prime counts towards this, not sure of TFL. See your HR rep to make sure you are good for the five year rule.

  16. John M Stryker says:

    And NOW, of course, this Administration (including the
    SecDef) is pushing to make an unprecedented cost increase to Tricare for Life for
    all of the military retirees and their families, without adding a penny more to
    their own healthcare contribution.  IF
    the leaders of this country were really concerned about the healthcare of the
    servicemen and women who have defended the freedom they live under, they would
    change the law to mandate all Congressmen, Senators, the President, Vice
    President and Supreme Court Justices were to use the Department of Veterans
    Affairs healthcare facilities (and ONLY VA facilities, not Military Hospitals
    for the active duty and their dependents) for their and their family health care
    needs. Then we, military service (survivors) would see some REAL attention paid
    to the level of care provided by the VA!

    As a former department head in both a Military Treatment
    Facility and a VA Medical Center (for more than twenty years), I am well aware
    of the differences between the level of care, services, and personnel which
    exist between these two (tax-payer provided) medical systems.  EVERY active duty, dependent, retiree, their spouses,
    service organization, and citizen should REQUIRE the citizen-elected leadership
    of this country to use (ONLY) VA medical care for their tax-payer provided health
    care.  CHANGE THELAW< NOW!

    Stryker6Actual

  17. Chiefvega says:

    This is very confusing, most likely because it is not specific.

  18. Glad2BRetired says:

    And therein lies the problem “…they can retain their right to re-enroll in FEHB should they become DISSATISFIED with TFL.”  Now ask yourself why that is?  I already know having been a chronic pain patient for 12 years. There are certain procedures I require that TRICARE deems “unproven” and will not cover.  The same holds true for Medicare.  BUT with BC/BS in conjunction with the other two, I am good to go. So no, I would NEVER suspend my coverage the FEHB and will keep my PRIVATE plan under the FEHB.  My point being, a person better think long and hard because it is not always about the premiums…more so the coverage!

    • fed worker says:

      You are correct to think about the coverage.  Do not make this mistake.  My husband was eligible for Medicare Part B last year.  We opted out due to the cost.  I also spoke with BC/BS and Social Security before making this decision since my husband is on disability with no insurance.  Both guaranteed that he would receive the same coverage as long as I am still employed with the government. My husband has developed a wound on his foot that will not heal.  He had this same problem last year and year before.  We never had to pay this amount of money. We are being charged $145.00 per week (visit 6) now.  BC/BS will not cover any of this treatment.  I have spoke with his doctor (Podiatrist) and BC/BS with no resolve from either.  By the way, his doctor is using a code that is required by BC/BS.  So to any one that may put off Part B, rethink this.  He is signed up now.  It will not be effective until July 1, 2012.  If you have health problems like my husband and myself, take all the coverage you can possibly afford. 

      • jhenjoh says:

        You might want to revisit your Medicare B enrollment schedule. If you are currently covered by a plan without break thru your employment you can opt into Medicare B at any time after you are eligible. You do not need to enroll in the open season Jan-Mar, and don’t have to wait until July 1, and don’t risk the penalty. (This might only count for you as the primary insured. Check it out.)
        On rereading the above, how is it you are employed and covered and he is not? Or do you just mean he has no disability insurance?

        • fed worker says:

          Sorry for the confusion.  My husband has been disabled for over 10 years due to open heart surgery and other health problems.  He draws a social security disability check.  He is covered under Medicare Part A.  His only insurance coverage is with my FEHB family plan.  I made a mistake last year for denying Part B.  But as I said, my BCBS and Social Security stated that there would be no changes until I retire.  He enrolled in Part B last November.  Had to send proof that I was a federal employee and he was actually covered on my plan.  My husband received a new Medicare Card stating that Part B will not be active until July 1, 2012.   Just feel like I am getting the run around from everyone.  I sent this email so that fed employees should be very careful regarding Medicare Part B. 

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