a few TRICARE questions

[infoseeker]

Hello. I will be be eligible for TRICARE this fall. I've done some internet research and want to know if this is correct: Health care premium for myself and spouse will be about $510/year. This includes yearly vision exam, but glasses/contacts are out of pocket expenses. Dental premium for the two of us is about $1056/year ($88/month). For those of you who have TRICARE, what do you do for dental? Is TRICARE dental a good deal? Thanks for any clarification.

 

[pops]

use Delta Dental

 

[braumeister]

I've never seen a dental plan that looked worthwhile. We self-insure for dental costs.

 

[Nords]

Health care premium for myself and spouse will be about $510/year.

Yep. Congress is still debating whether to legislate annual hikes in Tricare premiums tied to same percentage as the retiree pension COLA. DoD wants to tie future Tricare premium hikes to the national average inflation of healthcare expenses. Congress is probably going to stonewall DoD on that attitude, but it's a bargaining chip for cutting the defense budget.
Military pay & benefits cuts | Military Retirement & Financial Independence
http://militaryadvantage.military.com/2012/01/pay-raise-signed-in-the-nick-of-time/?ESRC=navy-a.nl
The military drawdown and benefits cuts | Military Retirement & Financial Independence

This includes yearly vision exam, but glasses/contacts are out of pocket expenses.

Yep. A couple of times in the last decade, Costco has wangled Tricare into waivering that 12-month requirement by a month or two. (My presbyopic contact prescription changed faster than I expected.) You may also have a $12 copay for the exam.

Dental premium for the two of us is about $1056/year ($88/month). For those of you who have TRICARE, what do you do for dental? Is TRICARE dental a good deal? Thanks for any clarification.

We dropped our dental insurance the day I retired.

If you can stretch out dental visits to 1-2 years, then paying out of pocket is cheaper than the premiums. You could talk to your dentist about paying cash (perhaps with a discount) for a set of X-rays, an exam, and a cleaning-- and compare that to the dental insurance premiums.

If genetics are against you then you might want insurance for root canals & crowns. But make sure you compare the dental insurance coverage & deductibles against what your dentist would charge for a cash discount. The insurance might not cover implants, either.

One of my cousins found a dentist in Budapest who did implants at a price far cheaper than American dental insurance premiums. Of course you'd have to add two round-trip airfares into that calculation.

This is a Reserve pension, right? Have you taken a fresh look at your SBP decision?
The Reserve Component Survivor Benefit Plan | Military Retirement & Financial Independence
More SBP details | Military Retirement & Financial Independence

Are you retiring under "Final Pay"? Depending on when your pension starts, you might want to consider "deferral" to Jan 2013.

Let's say that you turn age 60 in November 2012 and get your first deposit in December. Because you "retired awaiting pay", that pension payment is calculated based on the 2012 pay tables for the max longevity in that rank. (It's not based on "good years" but rather the max longevity. You could have only 20 good years but your pension would be based on the >22 or >26 pay scale.) Every year for the rest of your life that pension would be boosted by the retiree COLA, beginning in late 2013.

But what if you deferred your pension and started it in 2013? Then it'd be based on the 2013 pay table (max longevity at that rank). You'd get at least a 1.7% boost in your pension check for the rest of your life. You had to give up $1000 in Dec 2012 but now you're getting an extra $17/month. In five years you'd have made up the loss of the $1000.

It's a loophole that really only has an impact on Final Pay, and there's not many of us left, so DFAS may not be aware of it. But you could ask DFAS for two estimates of your retired pay (assuming you started in Dec 2012 and Jan 2013) to see how the numbers differ.
Retiring from the Reserves and National Guard | Military Retirement & Financial Independence

 

[packrat44]

DW and I dropped Delta Delta last Nov. It is more advantagous for us to pay cash to the dentist and not play games with Dental Dental with their rules (similar to Vegas, the house always wins).

 

[mickeyd]

For those of you who have TRICARE, what do you do for dental? Is TRICARE dental a good deal?

I have never been a fan of "dental insurance" unless you have a family plan with a couple of kids. I have been on tricare for many years and have never opted for the dental insurance, even though I see a dentist on a regular basis. Suggest that you consider self insuring for this risk.

 

[pops]

For $69/month my wife and I are covered by delta dental. We have never had a problem. Oer dentist files all of the paperwork.

 

[Nords]

For $69/month my wife and I are covered by delta dental. We have never had a problem. Oer dentist files all of the paperwork.

That works out to $828/year, or $414 per person.

I've been to the dentist four times in the last decade-- once every 2-3 years. Each time I've paid between $135-$175 for x-rays, exam, & cleaning. So let's call that $700 in 10 years.

If your premiums stay constant for a decade then you'll have spent $4140 on insurance, or $3440 more than me.

Now you just have to add in deductibles and copays, and then divide by the number of root canals...

Admittedly this is based on oral hygiene and the luck of the genetic draw. But by the time most people hit their 40s and retire, hopefully they know which group they fall into.

 

[infoseeker]

Thanks for all the responses. Nords, thanks for the very informative links.
Yes, this is a reserves pension. I entered the Navy in 1974, completed 4 years AD followed by 18 years active reserve. (Only 16 of the 18 reserve years were qualifying.) When using the "Final Pay" calculater should I enter 22 or 20 years? When I look at the pay scale for 2012, should I be looking at the over 18 or over 20 years column? I turn 60 at the end of November, so excellent tip on asking DFAS for estimates beginning Dec 2012 and Jan 2013.

I think my husband will agree that we should decline the SBP. (Ironic that I earned the opportunity to enroll in the SBP yet he, according to law, is the one who decides if I can decline it.) He retires April 2012 at age 55 with an immediate unreduced fed pension, and a soc sec annuity that starts when he turns 56. We have no debt, no dependent children, adequate retirement funds/savings. If I croak before he does, all this would go to him, so I see no reason to elect the SBP. Am I thinking clearly on this? I know it's a one time opportunity to elect this benefit, so I need be sure of my decision.

Feels weird to be seriously researching topics on retirement funds, annuities, pensions, life insurance, etc.....never had an interest until just recently......I always figured "retirement" was way out there when I was "old". Well here it is, early for us, and I'm scrambling for basic knowledge.

Appreciate every ones input. Hopefully, my questions/your answers will benefit others too.

 

[DFA]

I DH is a fed employee, does he have federal health care? My wife is Air National Guard and full time Tech, she gets to keep her health care at the same rate when she retires ($377.00/month for both of us) this covers Health, Vision, and dental. I retired AD with 20 years and we also use Tricare Standard (Free) and VA. Dental runs about $27/month with her plan for both of us.

 

[infoseeker]

My husband does have fed health insurance. Our plan is to drop that when he retires and I will put him on my work plan. We'll drop my work health insurance when I turn 60 this Fall and are both eligible for TRICARE.

I'm a little confused....when you say "she gets to keep her same rate" does than mean she is paying for insurance now even though you have TRICARE?

Nice that you both have dental at a decent premium!!

 

[DFA]

My husband does have fed health insurance. Our plan is to drop that when he retires and I will put him on my work plan. We'll drop my work health insurance when I turn 60 this Fall and are both eligible for TRICARE.

I'm a little confused....when you say "she gets to keep her same rate" does than mean she is paying for insurance now even though you have TRICARE?

Nice that you both have dental at a decent premium!!

We have found that a lot of doctors don't take Tricare, so she has the Government insurance so she can see her doctor she likes and I can see mine. We are also thinking of moving to Europe when we retire in 2.5/3 years and there are less doctors that will take Tricare.

The dental is part of her government insurance plan.

 

[infoseeker]

Oh.....I understand now!! I've got so much to learn about TRICARE. Thanks for sharing that.

 

[martyb]

My husband does have fed health insurance. Our plan is to drop that when he retires and I will put him on my work plan. We'll drop my work health insurance when I turn 60 this Fall and are both eligible for TRICARE.

I'm a little confused....when you say "she gets to keep her same rate" does than mean she is paying for insurance now even though you have TRICARE?

Nice that you both have dental at a decent premium!!

The one thing you do not want to do is "drop" his FEHB. If you do, you will never be able to get it back. You may think this is no big deal, but it really could be. You never know what the future might hold.... The thing to do is to keep his FEHB until you turn 60, then you can SUSPEND his FEHB, meaning you no longer pay for it, but because you're using the Tricare, the FEHB is in a state of suspension. If you decide Tricare just isn't working the way you want it to, you can re-institute the FEHB. Just make sure you SUSPEND it rather than CANCEL it. There's no reason not to do it this way, and you'll always have the FEHB for a backup plan. When I turn 60 and begin drawing my Air Force Reserves retired pay, this is exactly what I'll be doing. Best of luck.

 

[infoseeker]

martyb, thank you for that invaluable bit of information!

Once FEHB is suspended, sounds like the only way to switch back to FEHB is if other coverage (in our case TRICARE) is no longer available Suspension of FEHB Coverage to Use TRICARE, Medicare/Medicaid, or Certain State Sponsored Medical Assistance Plans TRICARE will always be available so how does that work?

Since my husband will switch to my insurance plan (until I turn 60 and we both pick up TRICARE) why not suspend FEHB immediately upon his retirement?

thanks again

 

[Nords]

Yes, this is a reserves pension. I entered the Navy in 1974, completed 4 years AD followed by 18 years active reserve. (Only 16 of the 18 reserve years were qualifying.)

Oboy, keep in mind that many of today's staff at DFAS and COMNAVRESFOR may not have even been alive when you joined the Navy. You might have to explain to them what "Final Pay" is.

You should be hearing from CNRF (or whatever we're calling it now) around April or May to check your pension amount, start date, and SBP decision. I recommend you try to jump the gun and start them on it now.

Seriously, you should be ready to fax over a copy of one of your 1974 LESs proving that you were on active duty back then. Your Date of Initial Entry into Military Service (DIEMS) data may have been mis-transcribed when the pay systems went joint in the late 1990s. It would be a bonus if you could put your hands on all your DD-214s and LESs. You would be a sweepstakes winner if you could lay your hands on your "Statement of Service for Navy Reserve Retirement" point-count summary sheet.

Hopefully you also have your Notice of Eligibility letter (letting you know that you reached those 20 good years) and your Reserve Retirement Order and Transfer Authorization to Retired Reserve Status (telling you that you're officially a gray-area retiree).

When using the "Final Pay" calculater should I enter 22 or 20 years? When I look at the pay scale for 2012, should I be looking at the over 18 or over 20 years column? I turn 60 at the end of November, so excellent tip on asking DFAS for estimates beginning Dec 2012 and Jan 2013.

Um, neither. You need to calculate your point count.

You get one point for every day of active duty (including leap years!) and one point for every drill (which means some drill weekends got two points/day). Hypothetically your DD-214s will have your individual point counts on them, as will your annual summaries. Or you could just look at the number at the bottom of your Statement of Service.

You're retiring as a Reservist under Final Pay: Estimate Your Pay

Divide your grand total career point count by 360 (because pay is based on 30-day months) and multiply by 2.5% to come up with your service multiplier. For example, 2134 points / 360 * 2.5% = 14.82%. That's your service percent multiplier, just as an active-duty retirement at 20 years would be 50%.

Now you need your pay scale. If you "retired awaiting pay", then your pay scale is on the 2012 pay table at the maximum longevity for that rank. (OSD Military Compensation (militarypay.defense.gov)) If you "resigned" instead of "retired awaiting pay" then your pay scale is the one in effect in the year you filed for retirement (1996?). 99.9% of Reservists did RAP because of the accrual benefit of using the age-60 pay table and the longevity. Of course for the last 16 years you've been subject to a total force mobilization, but that's the risk you took for the accrued benefit.

So take a look at page 2 of the 2012 pay table at http://www.dfas.mil/dms/dfas/militarymembers/pdf/MilPayTable2012.pdf . If you retired as an O-6, there are pay longevity raises at 20 years of service, 22 years, 24 years, 26 years, and 30 years. It tops out at 30. If you retired as an O-6 awaiting pay then you'd choose the maximum pay of that rank-- in this case O-6>30 or $10,557.30/month. If you retired as an O-5 then it'd be $8446.20. At E-7 it'd be $4815.90.

Whatever max pay you find for that rank, multiply it by 14.82% and round down to the nearest dollar. That's your monthly pension. For O-6 it'd be $10,557.30 * .1482 = $1564/month.

The last number I saw for a 2013 pay raise was 1.7%. Waiting a month to use the 2013 pay tables would cost you a month of retired pay (let's call it $1000) but would boost your pension by 1.7%. (This is only an effect on us Final Pay pensioners.) So you'd earn an extra $17/month for the rest of your life, and the payback on the foregone $1000 would be just under five years.

That DFAS website will get you a phone number and an e-mail link. It's tax time, so you might want to try e-mail.

More general info at this post: Retiring from the Reserves and National Guard | Military Retirement & Financial Independence

I think my husband will agree that we should decline the SBP. (Ironic that I earned the opportunity to enroll in the SBP yet he, according to law, is the one who decides if I can decline it.)

This depends on what you decided to do when you filed for retirement back in the 1990s.

If you elected SBP back then, the DoD wants you to pay for some of it. (Their logic is that you had SBP coverage during your gray-area years, so they want some payment to make up for their risk-- even though you're still alive.) You may be told that you have to cough up two years' SBP payments from your Reserve pension for your gray-area coverage.

If you declined SBP back then (or if you elected the option for it to start at age 60) the DoD may let you off the hook and you won't owe them any money for gray-area coverage. You have the option to re-elect SBP or decline it again. From what you've described, I'd prefer to have the 6.5% extra money now rather than to insure my spouse with yet another annuity after I'm gone. He, of course, may feel differently. Spouse and I [-]tested our love[/-] declined each other's SBP on our pensions. Well, technically she declined mine in 2002, and I intend to decline hers again in 2022. As far as she knows.

I know it's a one time opportunity to elect this benefit, so I need be sure of my decision.

To be excruciatingly correct: if you decline SBP at retirement, then the only way to enroll would be during an open enrollment period. There've been four of them over roughly the last 30 years. If you choose SBP at retirement, then you have a window between months 25-36 to change your mind and cancel the coverage. After that you're stuck, unless you divorce your spouse or they die.
The Reserve Component Survivor Benefit Plan | Military Retirement & Financial Independence
More SBP details | Military Retirement & Financial Independence

I'll bet you're wondering how I got so smart on this. It's not just because my spouse is a gray-area Reservist and Deserat wrote much of the book's Reserves chapter. I cheated: spouse has a lifetime subscription to the Association of the United States Navy (what used to be the Navy Reserve Association).

I recommend you sign up for a year's subscription at Home - Association of the United States Navy
Read their entire website, read every issue of their magazine, and in 12 months decide whether you want to keep on subscribing. If you sign up right now then you'll have access to all their website tools for Reserve planning, including the latest on when you'll hear from CNRF and DFAS and calculators and more details of that deferral decision. For a fee, AUSN will even review your record and tell you how much you'll be getting and what steps to take before Nov.

Oh.....I understand now!! I've got so much to learn about TRICARE. Thanks for sharing that.

If you're anywhere near a military base, they should have a military treatment facility with a Tricare ombudsman. You can call or visit them for more info. Another option would be e-mailing or calling the Tricare contractor for your area of the U.S.

martyb, thank you for that invaluable bit of information!
Once FEHB is suspended, sounds like the only way to switch back to FEHB is if other coverage (in our case TRICARE) is no longer available Suspension of FEHB Coverage to Use TRICARE, Medicare/Medicaid, or Certain State Sponsored Medical Assistance Plans TRICARE will always be available so how does that work?
Since my husband will switch to my insurance plan (until I turn 60 and we both pick up TRICARE) why not suspend FEHB immediately upon his retirement?
thanks again

Tricare may always be in effect, but it may not be accepted by any doctors in your area. I'd call that "not available" but you'd probably have to debate that with FEHB.

 

[infoseeker]

Thank you for the lengthy and informative reply, nords. I went on a hunt this morning and found:
DD214 release from AD (the yellowed original !)
Statement of Service for Naval Reserve Retirement (showing 2632 points)
NOE letter from Naval Personnel Center

The process has started.......recently received a packet requesting that I send several filled out forms to Naval Personnel Command. My first task, however, is to request a change of name (military records are still maiden name). I find that odd, as my retired military ID was issued with my married name. Oh well, good to jump through the hoops early.

Using the points system I calculated pension to be $880/month. The final pay calculater result was nearly twice that amount. Confused again......is that calculater for AD retirees only?

 

[Nords]

Using the points system I calculated pension to be $880/month. The final pay calculater result was nearly twice that amount. Confused again......is that calculater for AD retirees only?

Yup. You have to calculate your Reserve pension based on points.

If a Final Pay calculator asks for years of service then it's an active-duty calculator.

To a Reservist, "years of service" was just a way of making sure that you showed up for enough drill weekends. You had to spread out all those points across 20 good years.

So for calculating your pension, 2632 points / 360 * 2.5% =18.278%.

Take your retired rank into the 2012 pay table, pick off the biggest monthly pay for that number, and multiply it by .18278. Your $880/month result implies that you're using the E-7 pay of $4815.90. If that's what you're using too then it looks good.

Note that in 1996, E-7 pay was $2261.40/month. (http://www.dfas.mil/dms/dfas/militarymembers/pdf/MilPayTable1996.pdf) So "retired awaiting pay" for 16 years gave you more than a doubling of pay, or about 4.84% APY.

My first task, however, is to request a change of name (military records are still maiden name). I find that odd, as my retired military ID was issued with my married name. Oh well, good to jump through the hoops early.

If you have your old name-change paperwork they might be able to correct their records.

During the COMNAVRESFOR evacuation from Hurricane Katrina they were literally unplugging computer servers, throwing them in a truck, and driving them to Memphis. I have no idea how the paper was handled during that evacuation. It's possible that one or two files got scrambled...

 

[gary m]

Medicare and Tricare

Just about the time you think it's all figured out and fall into a false sense of security something hits. Found recently that without signing for Medicare Part B with esacalating premiums you are dropped from Tricare for Life.

 

[infoseeker]

The last number I saw for a 2013 pay raise was 1.7%. Waiting a month to use the 2013 pay tables would cost you a month of retired pay (let's call it $1000) but would boost your pension by 1.7%. (This is only an effect on us Final Pay pensioners.) So you'd earn an extra $17/month for the rest of your life, and the payback on the foregone $1000 would be just under five years.

OK, lets assume I want to start retiree pay in Dec and according to the 2012 pay table its $1000/month. Lets also assume the pay raise of 1.7% goes into effect for 2013. I collect $1000 in Dec and $1017 starting the next month, Jan 2013. Now, lets say I decide to delay pay to start Jan 2013. Since pay raise has gone into effect, my Jan paycheck will still be $1017. So, I'm confused....how does delaying start month from Dec to Jan benefit me?

 

[Tekward]

But what if you deferred your pension and started it in 2013? Then it'd be based on the 2013 pay table (max longevity at that rank). You'd get at least a 1.7% boost in your pension check for the rest of your life. You had to give up $1000 in Dec 2012 but now you're getting an extra $17/month. In five years you'd have made up the loss of the $1000.

I had not considered this since the payback period is based on the difference between the pay table raise and the annual COLA. If the retirement date is December they would get a COLA and reduce the $17/month difference and extend the break-even point. Am I off-base?

 

[martyb]

martyb, thank you for that invaluable bit of information!

Once FEHB is suspended, sounds like the only way to switch back to FEHB is if other coverage (in our case TRICARE) is no longer available Suspension of FEHB Coverage to Use TRICARE, Medicare/Medicaid, or Certain State Sponsored Medical Assistance Plans TRICARE will always be available so how does that work?

Since my husband will switch to my insurance plan (until I turn 60 and we both pick up TRICARE) why not suspend FEHB immediately upon his retirement?

thanks again

You're welcome. I forgot to stress that it is imperative that you wait until AFTER you are actually enrolled in TriCare to suspend your FEHB. Best of luck to you. My understanding is that if you do the FEHB suspension for TriCare, and then later decide Tricare's just not working for you, you can switch back to FEHB at the next open season. However, if you involuntarily lose TriCare coverage for some reason, or, like Nords said, you find yourself in a situation where you can't use your TriCare because all the doctors in your area have stopped taking TriCare (only my speculation here), you can switch back to FEHB immediately, without having to wait for an open season. This is my interpretation of the OPM regs.

 

[Nords]

The last number I saw for a 2013 pay raise was 1.7%. Waiting a month to use the 2013 pay tables would cost you a month of retired pay (let's call it $1000) but would boost your pension by 1.7%. (This is only an effect on us Final Pay pensioners.) So you'd earn an extra $17/month for the rest of your life, and the payback on the foregone $1000 would be just under five years.
OK, lets assume I want to start retiree pay in Dec and according to the 2012 pay table its $1000/month. Lets also assume the pay raise of 1.7% goes into effect for 2013. I collect $1000 in Dec and $1017 starting the next month, Jan 2013. Now, lets say I decide to delay pay to start Jan 2013. Since pay raise has gone into effect, my Jan paycheck will still be $1017. So, I'm confused....how does delaying start month from Dec to Jan benefit me?

I had not considered this since the payback period is based on the difference between the pay table raise and the annual COLA. If the retirement date is December they would get a COLA and reduce the $17/month difference and extend the break-even point. Am I off-base?

Nope. This is a one-time opportunity to game the active-duty pay raise.

You'd collect $1000 in Dec but you wouldn't get the 2013 COLA since you hadn't been retired long enough, so you'd receive $1000 for each of the next 12 months. Then at the end of 2013 you'd get a retiree COLA for 2014. And every year after that you'd get a retiree COLA, but you'd never see an active-duty pay raise.

If you waited until Jan then you'd get $1017, and at the end of that 2013 you'd get the same retiree COLA applied to the extra $17 as well as the $1000. So it's actually a bit of a compounding effect.

But you'd never again be able to exploit an active-duty pay raise.

The amount of the pension and the amount of the pay raise affect your payback period, so it might not be worth waiting a month if the payback is 10+ years.

This is just a niche for Final Pay retirees, not for High Three, because High Three averages their final 36 months of pay and one month isn't a significant difference. And it really only makes a difference if you're born in Nov/Dec. My spouse is a Nov birthday so I remembered the gimmick.

I read about this deferral option just once in the AUSN magazine, so it was published somewhere between 2001 and 2008. But I can't find it.

By the way, one of you sent me a PM about calculating a High Three Reserve retirement, so here's how it works.

Here's what the Association of the U.S. Navy website says about High Three Reserve retirement in one of their articles:

This system applies to anyone with a DIEMS of 8 September 1980 to present. Retired pay is calculated based on a figure derived from the average of the last 36 months of basic pay for the approved retired grade (highest grade satisfactorily held), and from the length of service (longevity) prior to reaching age 60. In other words, it is the basic pay in effect when you were ages 58, 59, and 60. The percentage of that figure (36-month average) you will receive is calculated by dividing your total points by 360 and multiplying that figure (equal to years and months) by 2.5 percent.

So you still start with your total points, divided by 360, multiplied by 2.5% to get the service multiple.

But then the pay calculation is painful. You have to have 36 months of pay charts (the years you turn ages 60, age 59, age 58, and age 57). For each one you'll take the max pay at that rank (max longevity) and the number of months of that year. Then you'll add them all together and divide by 36.

Let's say you turn age 60 in June 2012. You'd use six months (Jan-June) of pay for that rank at the max longevity in the 2012 pay table.

Then you'd use 12 months of max pay for that rank in the 2011 pay table.

You'd add another 12 months of max pay for that rank in the 2010 pay table.

Finally you'd add another six months of max pay for that rank in the 2009 pay table.

Now that you have the final 36 months of pay, you add all those numbers up and divide by 36 to get the final average monthly high-three pay.

That base pay number is multiplied by the service multiple to get the monthly pension amount.

AUSN's website doesn't even have a calculator for this. They have a "Contact us" form that you fill out with the pertinent birthday & points data, and then someone at AUSN calculates the pension amount by hand.

This might not make for a very exciting blog post, but it'll be a challenge to write!