For most people transitioning out of the military, your insurance policies shouldn’t change dramatically. The few exceptions are Health Insurance (Separatees Only), Life Insurance, and in certain instances. Automobile Insurance. It is extremely important to understand what insurance benefits and entitlements you are and are not entitled to as you leave the military.
Health Insurance
Health Insurance is one of the most difficult concepts to understand as a person separating from the military. This is likely the first time in your entire life that you have ever had to pay for it. With the exception of those who have retired (served > 20 years), it will be important to get your policy organized so that there is no gap between your military health benefits, your VA benefits, and your new policy. The worst possible scenario is that you or your family members require medical treatment during a brief period that you are not covered.
Health Insurance for personnel separating the military
If you are separating from the military, it is important that you clearly understand your health insurance coverage, because this will likely be the first time in your life that you’ve had to pay for insurance other than the occasional tri-care premiums. It also means that you will no longer be able to use the military hospitals, dental clinics, and pharmacies, which is another new concept to many individuals separating from the military.
As you transition from the military Health Care system and the civilian Health Care system, it is important that you understand all of the options. Listed below are several programs that are not very well known for which you may be eligible to ease the transition into the civilian Health Care system.
If you have already received a job offer or anticipate getting one, there is a good chance that your health insurance will be included with your benefits. If your employer or future employer has not communicated what specific health care options you will have, it is critical that you ask in order to understand the financial impact on your family budget. Typically, employers will utilize an HMO, which will have several “tiers” of coverage. Typically, the more expensive the monthly premium that you pay for, the more options you will have and the lower deductible you will have for major medical procedures (i.e. maternity, surgery, etc.). In addition, there is a “network” of physicians that will be offered through the HMO, and typically your options for which doctor you are eligible to use, will expand, the higher the premium you pay. (For example, if you pay the lowest monthly premium, you may not be able to use your favorite doctor, because he or she may not participate in your HMO’s “network”)
For people who are separating and do not yet have an employer and are not interested in any further military transitional health care services, it is important to weigh your options with the civilian providers for you and your family. Some things to consider are monthly premiums, deductibles, “network” of physicians, and breadth of coverage. If you are interested in seeing what type of coverage you may be eligible for, you can use the link below to receive information on more options:
When you voluntarily separate from the military, you and your family will lose your Tri-Care coverage. There are a few exceptions listed below:
o Dependents: Your child may continue to be eligible for Tri-Care until he or she turns 21 years of age
o If you are killed on Active Duty, your dependents will remain eligible for 3 years
o TAMP – Transitional Assistance Management Program, which is basically TRICARE for people who have separated the military for three unique reasons – in each of these instances, both you and your family members are treated as “dependents” under the TRICARE system from anywhere from 6 – 18 months after separating from Active Duty (or the contingency operations listed below)
• Members of the military reserves or National Guard who are called to active duty in support of a contingency operation and are separated for more than 30 days from their family
• Active Duty members involuntarily retained to support a contingency operation
• Members separated from the military following a volunteer agreement to stay on active duty in support of a contingency operation for less than one year
More detailed information on TAMP can be found at: www.tricare.mil
If you are involuntarily separated from active duty, you may be eligible for TAMP, from anywhere from 6 – 18 months after your separation. In this particular case, you would be treated as a “dependent” under the TRICARE program, along with your dependents. Again, you can find more information on this at the tricare website.
CHCBP:
Another good option between military coverage and civilian coverage is Continued Health Care Benefit Program (CHCBP). You can apply for CHCBP either after you separate from Active Duty or when your eligibility for TAMP expires.
CHCBP will provide transition coverage that is very similar to TRICARE Standard for up to 18 months. YOU MUST APPLY FOR COVERAGE WITHIN 60 DAYS OF SEPARATING FROM ACTIVE DUTY.
For information on registering for CHCBP, visit the Tricare Website.
VA Health Care for Certain Veterans Separating from the Military:
Many Veterans will be eligible for VA Health Benefits, however the formula for co-pays, full eligibility, procedural eligibility, and breadth of coverage is a little complicated. If you are seeking treatment for a non-service connected issue, you will likely have to complete the financial “means” test. It will determine what type of coverage you are eligible for and what your co-pay might be. If you decline to take a financial “means” test, you will be required to pay full co-pays for any visits to the facility.
In order to determine your eligibility for VA Health Care, you must fit into one of eight VA eligibility categories. The VA wants to provide medical assistance to all Veterans. However because of resources, they give priority to the Veterans with the highest needs. Priority Group 1 consists of Veterans with Service Connected Disabilities >50%, and it ratchets down to Priority Group 8, who are generally considered higher income Veterans. In order to see which priority group you may fit in, visit the VA website at:
Health Insurance for retiring personnel
As a retiree of the armed services, you will be eligible for TRICARE. Keep in mind, however, that there are many different options for TRICARE plans. It is important that you fully understand the benefits that best suit you and your family. Essentially, there are three plans that you can choose from (TRICARE Prime, TRICARE Extra, and TRICARE Standard). However there are a large variety of programs available, which you will need to research.
In addition, as a retiree, you will continue to have access to military hospitals and pharmacies on a case-by-case basis. Getting in to see a military doctor continues to be more and more difficult for retirees, due to military hospital closures and increased needs from Active Duty personnel.
TRICARE for Life – A change that has occurred in the last decade with retired personnel is TRICARE for life. Essentially, once you reach the age of retirement, (65) your medicare benefits will kick in. As a result, TRICARE will serve as your secondary provider. In the case that you experience extremely costly procedures past the age of 65, TRICARE will pay any balance on your health coverage. For more details on TRICARE for life, visit the tri-care website.
Special note: If you are transitioning into a new career, your employee will likely offer some sort of Health Insurance plan. You have a tremendous amount of leverage as a military retiree that you should use to your advantage. Once you have negotiated your pay in your new job (assuming your new employer offers health insurance) you can offer to forego health insurance (which will save your employer money) for additional pay. For example, if your employer offers to pay you $20/hour plus health insurance, you can come back to him and say you will take no health insurance for $21 or $22/hour.
Health Insurance for Disabled Veterans
Veterans with Service Connected Disabilities are eligible to receive treatment from VA Medical Facilities. Depending on your Disability Rating, you will likely fall under the VA’s top priority groups, which can be found here at the VA website.
There are many different healthcare options offered to Veterans with Service Connected Disabilities. It is important that the individual service member go to their nearest VA upon separation with all of the required paperwork to ensure the benefits are taken care of. Further information can be found here at the VA website and FAQs about VA health benefits can be found here.
Life Insurance
Life Insurance for personnel separating the military
If you are voluntarily separating the military, you will be losing your SGLI benefits, which means that you will need to ensure that you are covered for life insurance. The most viable option is VGLI (Veterans Group Life Insurance), which is offered through the VA. The program is similar to your active duty SGLI, and may be slightly better rates than civilian programs you may find. VGLI covers your family up to $400,000 in case of your death. You need to apply for VGLI within 120 days of your separation from the military. There are plenty of other options outside of the VA as well for life insurance, which can be found here. For pricing, coverage, and online applications, you can visit the VA website. FAQs on VGLI visit the VA's insurance site.
In addition to VGLI, there are other life insurance options available to Veterans. It could be in your best interest to compare rates to ensure you are getting the best coverage.
Life Insurance for retiring personnel
There are excellent programs in place for Retired personnel, which should be given heavy consideration. One of the plans that should be given the most consideration for Retirees is the Survivors Benefit Plan.
Survivors Benefit Plan (SBP) – The Survivors Benefit Plan is one of the most important benefits that retirees need to understand on their way out of the military. Since your retirement benefits stop when the service member dies, it is important that your spouse or child is covered in case of death. The SBP gives your dependents an inflation-adjusted annuity upon your death, at a relatively small price of your retirement pay. In addition, the money taken for SBP premiums comes directly from your retirement pay, hence creating a lower taxable income threshold for participants.
The payments for SBP can range anywhere from $300 a month to your full retirement pay, it all depends on the premium you elect, your age, sex, and health. For more information on SBP and to determine whether or not it makes sense for you, go to the defense link military compensation page or the Defense link Overview of the Survivor Benefit Plan.
Automobile Insurance
Automobile Insurance is something that you have been paying for during your military service, so there is a good chance that you may not need to change your insurance. The primary instances that will cause you to have to switch Car Insurance are:
o Lower your monthly premiums
o Dropped coverage
o Moving (some insurance providers do not cover every geographical area)
If any of these cases occurs, it makes sense to look at all of your options for new Automobile Insurance. In addition, given all of your new expenses while making the transition out of the military, it is important to watch each and every expense.
It is always worth researching monthly pricing and seeing if you can get a better deal on your auto insurance, especially in this competitive market.
There are several automobile insurance providers that will offer competitive rates for veterans including USAA and Armed Forces Insurance.
In addition, there are many other providers that can offer competitive rates that can be attractive to veterans. For more information Auto Insurance Quotes in your area, click below:
