Jeffrey Wade
Military reserve medical retirees may be eligible for a pension and disability compensation from the Department of Veterans Affairs (VA). The benefits received depend on the retiree's situation, including their length of service, the nature and severity of their disability, and their basic pay. Medical retirees are also eligible for health insurance coverage, with options such as TRICARE, Medicare, and supplemental insurance policies, each with its own specific criteria and eligibility requirements.
Does military reserve medical retirement include health insurance?
| Characteristics | Values |
|---|---|
| TRICARE eligibility | Reserve Component (RC) retirees become eligible for TRICARE benefits when they reach age 60 and begin receiving retirement pay. TRICARE eligibility remains in force until age 65. |
| TRICARE For Life (TFL) | Upon reaching age 65, TRICARE ends, and you become eligible for Medicare and TFL. There are no TFL enrollment fees, but you are required to pay Medicare Part B premiums. |
| TRICARE dental | Once you retire, you lose eligibility for TRICARE dental. To retain dental insurance, you have to enroll in the TRICARE Retiree Dental Program (TRDP). |
| TRDP | The TRDP provides comprehensive dental coverage for Uniformed Services retirees and their family members. It is a voluntary dental benefits program with enrollee-paid premiums. |
| Supplemental insurance | TRICARE does not cover all costs and has a yearly deductible and a yearly cap on non-covered expenses. A supplemental insurance policy is recommended for retirees. |
| Medicare | When you reach age 65 (or otherwise become eligible for Medicare) you must enroll in Medicare. Most people over 65 also sign up for Medicare Part D, which is the Medicare Pharmacy benefit along with Part B, the medical insurance benefit. |
| Medicare and TRICARE | If you have TRICARE, you don’t need to join a Medicare Prescription Drug Plan. However, if you do, your Medicare drug plan pays first, and TRICARE pays second. |
| VA disability compensation | Reservists who retire or leave the service with disabilities caused while on duty can receive disability compensation from the Department of Veterans Affairs. |
| VA disability retirement pay | Members officially rated by the military as at least 30% permanently disabled are entitled to disability retirement pay. To qualify, they must have spent at least eight years in the military or the disability must have been incurred in the line of duty. |
| Temporary disability | Those with temporary disabilities may be placed on the Temporary Disability Retired List, and their disabilities will be re-evaluated every 18 months. Within five years, doctors must determine whether the disabilities are permanent. |
| Concurrent Retirement and Disability Pay (CRDP) | Qualified military retirees with any VA-rated disabilities of 10% or higher that are the result of combat or combat-like training are eligible for a monthly payment, which replaces their retirement pay offset and gives them concurrent receipt of their full retirement pay and full VA disability compensation. |
| Combat-Related Special Compensation (CRSC) | CRSC is open to all Chapter 61 retirees, even those medically retired by the military with fewer than 20 years of service. Upon determination of eligibility, qualified retirees immediately receive their regular retirement pay plus a sum based on their VA disability rating. CRSC is not taxable. |
| Military retirement pay | Military retirees with 20 or more years of service and a 50% or higher VA-rated disability no longer have their military retirement pay reduced by the amount of their VA disability compensation. |
| Military medical care | Veterans classified as 100% disabled, as well as their spouses and any dependent children, may use military exchanges, commissaries, and other base facilities, but they are not eligible for military medical care. |
| VA medical care | The VA provides medical care for eligible veterans, spouses, and dependents. |
| VA pension | The VA has a pension program for veterans who did not retire from the military, as well as a pension for survivors of veterans who served during a war. |
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What You'll Learn
TRICARE eligibility and costs
TRICARE is a health insurance option for military reserve retirees and their families. To be eligible, retirees must have a physical condition, injury, or disease that renders them unfit for military service and a disability rating of at least 30%, separate from the rating given by the Department of Veterans Affairs.
Retired Reserve members and their families can purchase TRICARE Retired Reserve until they turn 60. There is an enrollment fee, and copays for treatment. After turning 60, retirees and their families are eligible for the same benefits as other retired service members. Those who are eligible for Medicare under 65 must have Medicare Part B to keep their TRICARE benefits.
TRICARE for Life (TFL) is available for retirees aged 65 and older who purchase Medicare Part B coverage. TFL is a Medicare supplement, providing primary coverage for healthcare received outside the US and US territories.
TRICARE does not cover all costs. There is a yearly deductible, and a yearly cap on non-covered expenses, which the beneficiary is responsible for. As such, it is recommended that retirees purchase a supplemental insurance policy.
The TRICARE Pharmacy Program allows beneficiaries to fill their prescriptions at military treatment facility pharmacies, through the TRICARE Pharmacy Home Delivery option, at TRICARE retail network pharmacies, or at non-network pharmacies. Some maintenance medications must be refilled via home delivery or at a military pharmacy.
TRICARE also offers vision benefits, with some programs providing free or reduced-price eye examinations and corrective lenses. Retirees are eligible for vision insurance through the Federal Employees Dental and Vision Insurance Program (FEDVIP), a voluntary, enrollee-pay-all insurance program sponsored by the US Office of Personnel Management.
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Supplemental insurance
Military reserve retirees have many options for health insurance coverage. Reserve Component (RC) retirees become eligible for TRICARE benefits when they turn 60 and start receiving retirement pay. Eligibility for TRICARE benefits ends at 65, at which point retirees become eligible for Medicare and TRICARE For Life (TFL). TRICARE does not cover all costs and has a yearly deductible and a cap on non-covered expenses, which is why retirees are advised to purchase a supplemental insurance policy.
If you are covered by health insurance with your new employer, you may use TRICARE as your supplemental insurance for that policy. You should check with your TRICARE advisor concerning your particular circumstances and those of your family.
There are many places to obtain supplemental health insurance. Several fraternal associations and commercial insurance companies offer such plans, but you should look carefully for the one that is best for you and your family. Insurance plans vary greatly in terms of which medical procedures are covered and the percentage the policy will pay. When shopping for health insurance, first consider the benefits you may have as a retiree or veteran. Then purchase supplemental insurance. The trick is to find a supplemental insurance plan that covers all your anticipated needs without paying for benefits that duplicate what you already have.
Major medical insurance pays practically every form of hospital and outpatient care as long as a licensed physician provides the care. Most people choose major medical because it is so comprehensive, but the payments for this type of coverage are high. Disability insurance pays a percentage of your normal income if a disability prevents you from doing your job. When looking at your health insurance coverage, review your insurance on your automobile, personal property, real estate, and loan payments. Insurers sometimes offer discounts to customers who purchase several types of insurance from the same company.
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Dental coverage
Military retirees can get dental coverage through the Federal Employees Dental and Vision Insurance Program (FEDVIP), which is a voluntary, enrollee-pay-all insurance program. FEDVIP offers a variety of dental plans to choose from, with options available worldwide or in specific regions/zip codes. The program is sponsored by the U.S. Office of Personnel Management (OPM) and provides eligible participants with a choice between 12 dental insurance carriers. Plans have varying levels of coverage, with most offering a high and standard option. The high option provides more coverage for a higher premium, while the standard option may have a deductible and lower premiums.
The TRICARE Retiree Dental Program (TRDP) was ended in 2018, which is why retirees now need to seek dental coverage through FEDVIP. However, it's important to note that TRICARE Pharmacy eligibility may make purchasing Medicare Part D unnecessary, and that having TRICARE means you don't need to join a Medicare Prescription Drug Plan.
Initial enrollment in FEDVIP is usually during the open enrollment season, which runs from mid-November to mid-December every year. However, you can begin, end, or change your coverage at any time if you experience a "qualifying life event," such as the death of a family member or a change in your marital status.
FEDVIP is also available to dependents of a retired service member/retired reserve member, including spouses and children, even if the retired member isn't enrolled in the program. This is applicable in situations where the retired member receives VA dental services, has dental insurance that doesn't cover family members, or cannot receive dental services due to a medical or dental condition.
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Disability compensation
Military reserve medical retirement includes health insurance in the form of TRICARE benefits. If you are a Reserve Component (RC) retiree, you become eligible for TRICARE benefits when you start receiving retirement pay at age 60. TRICARE eligibility lasts until you turn 65, at which point it ends and you become eligible for Medicare and TRICARE For Life (TFL). TRICARE does not cover all costs, so it is recommended that retirees also purchase a supplemental insurance policy.
If a veteran is found eligible for disability retirement, they will receive retirement benefits, including a monthly stipend and medical coverage for themselves and their dependents. This is known as the Temporary Disability Retirement List (TDRL). Those on the TDRL are required to complete a physical examination at least every 18 months to assess the stabilization or correction of their medical condition. The maximum time allowed on the TDRL is five years, after which a decision will be made regarding the veteran's condition.
If a veteran is placed on the Permanent Disability Retired List (PDRL), they are entitled to all the benefits of a military retiree, including a retirement payment. Additionally, they may receive disability severance pay, which is a one-time, lump-sum payment calculated based on their basic pay and years of service.
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Pension plans
Military retirees with 20 or more years of service are eligible for pension plans. The pension plan and benefits received depend on the retiree's situation. There are two pension plans for active-duty service members, both of which require 20 or more years of service. The amount received is based on basic pay and the date of joining the military.
The Legacy/High 36 Retirement System is a pension plan based on an average of the highest 36 months of basic pay. The government does not match contributions to the Thrift Savings Plan. This plan applies to those who retired before 2006. Between 2006 and 2017, retirees could choose between the Legacy/High 36 and the Blended Retirement System (BRS). After 2017, retirees automatically fell under the BRS. Under the BRS, the government matches contributions to the Thrift Savings Plan by up to 4%. Retirees also receive a pension based on an average of their highest 36 months of basic pay.
Retiring reservists typically begin receiving retirement benefits at age 60, but those who served fewer than 20 years may still qualify if they retired under the Temporary Early Retirement Act. Reservists with disabilities caused in the line of duty can receive disability compensation from the Department of Veterans Affairs. Members rated at least 30% permanently disabled by the military are entitled to disability retirement pay. Temporary disabilities are re-evaluated every 18 months for up to five years, after which a determination is made regarding permanence.
Qualified military retirees may receive both full military retirement pay and full VA disability compensation. Those with 20 or more years of service and a 50% to 90% VA-rated nonservice-connected disability no longer have their retirement pay reduced by their disability compensation. For those rated 100% disabled, the offset has been eliminated with no phase-in period.
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Frequently asked questions
TRICARE is a health insurance plan for military members and retirees. TRICARE eligibility begins when retirees reach age 60 and begin receiving retirement pay. TRICARE eligibility remains in force until age 65.
TRICARE has a yearly deductible to be paid and a yearly cap on non-covered expenses. Once you retire, you lose eligibility for TRICARE dental. To retain dental insurance, you have to enroll in the TRICARE Retiree Dental Program (TRDP).
The TRDP is a voluntary dental benefits program with enrollee-paid premiums. The TRDP provides comprehensive dental coverage for Uniformed Services retirees and their family members.
If you are covered by health insurance with your new employer, you may use TRICARE as your supplemental insurance for that policy.
If a sponsor dies after retiring from active duty, surviving family members remain eligible for TRICARE with the same health plan options and costs they had before.
