A common question for working military spouses and military retirees is, “Should I take my employer’s health insurance, since I have Tricare?” It’s a smart question to ask, but you’ll need some details to find an answer.
Understanding How Tricare and Other Health Insurance Work Together
In Tricare language, any other health insurance is called OHI.
The most important thing to know is that Tricare always pays second to OHI except for Medicaid, Medicare, specifically designated Tricare supplements, and a couple of other very unique government programs like state run victim compensation programs and Indian Health Care. So if you take your employer’s healthcare, it will pay first and then the balance will be submitted to Tricare.
Side note: Be sure you understand your Tricare options, either active duty or retired. I’ve talked to people who are willing to pay pretty significant premiums for OHI based upon misunderstandings of the Tricare system. In particular, people will tell me that they don’t want to go get their care on base, or deal with referrals. Once I explain Tricare Select, they realize that maybe they don’t need OHI to get the flexibility they want.
How Much Are You Paying For Tricare?
First, you need to know how much you’re paying for Tricare. This article can help you figure it out, but I’ll summarize the most important parts here:
Consider your Tricare catastrophic cap. This is the most you’ll pay for covered services in a year. For active duty families, it is $1,000 for sponsors who joined the military prior to 1 January 2018 and $1,044 for sponsors who joined the military one or after 1 January 2018. For retiree families, it is $3,000 for sponsors who joined the military prior to 1 January 2018, and $3,655 for sponsors who joined the military on or after 1 January 2018.
In many, many cases, just the premium on the other policy is more than the catastrophic cap on Tricare.
How Much Healthcare Do You Use?
The catastrophic cap is important because it represents the most you’ll pay for covered care, but many families never get anywhere near their catastrophic cap. In that case, you may want to consider the ongoing costs.
Each combination of plans (active duty vs. retiree, Group A vs. Group B, and Prime vs. Select) has their own costs. As I mentioned before, this article is a good place to figure out the costs you will have for each plan. Some, like Tricare Prime for active duty family members who use a Military Treatment Facility, have nearly no out of pocket costs. Others plans may have an enrollment fee and/or ongoing co-pays for care. Note the change for 2021: Tricare Select will have an enrollment fee for retirees and their families.
If you think that you never use enough health insurance to meet your catastrophic cap, map out the health care that you do use in a year and figure out what it will cost you with and without OHI. Keep in mind that these are just estimates and you could have a very light health care year, or you could have an injury or illness that blows these estimates out of the water.
How Much Will Tricare Pay After Your Other Health Insurance?
The first step is to submit your claim to your OHI. It’s super important to follow the rules of your OHI. If your OHI denies a claim for any reason, including a lack of referrals, Tricare will generally also deny the claim.
Once your claim is paid by your OHI, it is then forwarded to Tricare.
If the provider was a Tricare network provider, or a participating non-network provider (who accepts Tricare assignment), Tricare will pay the smaller dollar amount of these three calculations:
- billed amount minus the OHI payment, so no balance remaining
- amount TRICARE would have paid without OHI, little to no balance remaining
- amount beneficiary owes after the OHI paid (usually the OHI copayment or cost share), so no balance remaining
If the provider was a non-participating provider (does not accept Tricare assignment), Tricare will pay the smaller dollar amount of these three calculations.
- 115 percent of the allowed amount minus the OHI payment
- Amount TRICARE would have paid without OHI
- Amount beneficiary owes after the OHI paid (usually the OHI copayment or cost-share)
It’s important to understand that non-participating providers may only bill a Tricare beneficiary up to 115% of the Tricare allowed amount. If the OHI paid more than 115% of the Tricare allowed amount, Tricare will not pay any remaining portion, as the charge is considered paid in full and the provider may not bill the beneficiary.
Prescription Coverage
Prescription coverage works pretty much the same way as health care coverage. Your OHI will pay first, and Tricare will pay second. Use a Tricare network pharmacy to keep your costs as low as possible, and inform the pharmacy staff of both insurance plans.
Beneficiaries with OHI are permitted to use military treatment facility pharmacies, but will need to provide their OHI information so that the Department of Defense can bill the OHI.
Tricare beneficiaries with OHI may not use Tricare Home Delivery (Express Scripts) unless their OHI does not include pharmacy benefits, the drug is not covered by the OHI, or you have met your OHI’s benefit cap.
What About Active Duty Members?
Active duty service members, including activated reservists and National Guard, can not use other health care as their primary coverage. As a general rule, they are only covered by Tricare. If an active duty service member wishes to try to coordinate with their OHI, they need to work with their Tricare contractor first.
The Tricare Young Adult Twist
One situation in which carrying other health insurance may make sense is if you have one or more kids who are no longer eligible for regular Tricare coverage, but are not yet 26. If you are considering covering them under Tricare Young Adult, they would almost always be covered under your other health insurance, possibly at no additional charge. This could change the math entirely, particularly if you have multiple kids in that gap.
One Other Thing To Consider
There is one other thing to consider when deciding whether to use OHI with Tricare: What is your mental and emotional capacity for dealing with paperwork and other issues? In theory, OHI and Tricare are supposed to work together smoothly, and sometimes that works out. But sometimes it doesn’t. If you can’t stand dealing with insurance issues, or you just don’t have time, then that might push you towards sticking with Tricare alone.
Every situation is different, and there’s no right answer for everyone. You have to consider the coverage and costs of your other health insurance, and the coverage and costs of Tricare, how they’ll work together, and your family’s medical needs. In a vast majority of cases, Tricare beneficiaries find that there is no good reason to take the outside health insurance. Don’t make a decision without thoroughly understanding how it all works!
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Thanks for the article, but I am having a hard time finding information on Tricare Select. I am in Group A. I am employed and have health insurance under my employer that also covers my wife. Now I understand that we will be required to pay a monthly premium starting in January for select. The only resource we use “on base” is the pharmacy. So I don’t believe we need select. But I just want to be sure. Can you shed any light on what select provides and if you already have health care coverage if you need it.
Hi Dale – the equation remains the same, just the numbers change a little bit. Tricare Select is outstanding stand-alone coverage and I’m surprised that your employer’s health insurance is a better offer. (It does happen, but it’s definitely an exception.) If you are using your employer health insurance, Tricare Select can help with deductibles, co-pays, and cost-shares of your employer coverage.
My husband is retired Army. He works for a company that has a $12K deductible insurance plan. Tricare is our secondary. We were told we had to use his company insurance if it was offered. So we do have a choice and we can cancel his employer benefits and only use Tricare?
Hi, I have the same question. Do we have to opt in for employer insurance if offered? Or is Tricare ok with us declining OHI…? Also retired military. Thank you!
I am wondering the same thing. Did you get an answer?
At this time, you are not required to accept other health insurance. That’s an idea that has been tossed around, and may happen at somepoint in the future. But not now.
Hi Kate, I’m retired military with 4 kids 12 and under. My wife works for Banner Healthcare and can get medical insurance through them. The cost will be around $500/month to cover my wife and 4 kids. My wife and I are confused as to whether or not to enroll in her medical insurance or should we stick to only Tricare? Please advise.
Hi George,
There’s no single right answer to that question. Your wife’s plan will cost you more, as the catastrophic cap on covered services is only $3000 (Prime) or $3500 (Select.) But that extra cost may be worth it, if it is hard to find providers in your area, or if her plan covers things that Tricare doesn’t cover (like chiropractic.)
Most people find that just Tricare works for their situation, but dig around a little to see if that would be true for you.
Good luck!
Thanks Kate for the great information …! I’m retired ANG and became “Tricare eligible” last February. I asked about making changes (Tricare and Anthem reps) but never got a solid answer and subsequently made no changes. (Wish I would have found you sooner!!) Turns out I should have been a little more assertive, because I could have saved a bunch on premiums alone over the past 9 – 10 months. During Open Enrollment this year I discovered that my employer offers a “Tricare Supplement” which, I’m learning will pick up what Tricare Select does not. Very reasonable rate it seems. Stay tuned … I’ll let you know mid-year or so, how things are going.
Thanks again for what you do!! Keep up the good work!
Bill! I am so glad that you found a good solution for you! Please keep me updated!
My wife retires January 1, 2021, she is 62. We use her employer’s insurance plan, it is better than the ones my employer provides. I plan to retire June 30, 2021 as well, I am 61. We also have Tricare Select and I am in Group A. The health plans my employer provides for me are expensive and are not very good plans. My question is, “Does Tricare require me to enroll in one of my employer’s health plans to keep Tricare?” Can I just use Tricare and not enroll in one of the plans provided by my employer?
Tricare does not require you to enroll in an available employer health plan. You can just use Tricare.
Changes to this have been floated around for years, but there hasn’t been any significant attempt to make this a requirement for Tricare. Could it happen in the future? It could. But it isn’t the rule now, and I wouldn’t forsee that passing anytime in the near future. But definitely a good idea to belong to a military benefits organization like MOAA or TREA to keep up on these types of issues.
What rule prevents me for buying high quality private health insurance as an active duty member (United States Public Health Service under HHS not Armed Forces)? I cannot find anything written in law but am told by tricare not to. I assume that I have consumer rights. I cannot find any law that states I cannot buy private health insurance.
I am retired military and have OHI through my new employer starting 1 Jan. It is 100% paid for by my employer. I have notified Tricare that I have OHI. My employer plan has a $250 deductible and of course Tricare has $150. Do i need to meet BOTH before Tricare pays out? It seems like Tricare costs are already very reduced by the fact that the OHI would pay the bulk of any medical costs, but by having OHI, it looks like I am now having two deductibles to meet. I called Humana, they were not clear at all.
Hello,
My son will ‘age out’ from my employer covered insurance, leaving myself and my daughter on this plan. The only reason I signed up for employer covered insurance was for my son to have health insurance. Since he is aging out, should I go back to TRICARE, where the cost is significantly less? Also, I am looking at future health cost when I get older. Is TRICARE a better option? The hospital I go to now under my employer plan seems to have better ‘bedside manner’ but it costs a lot more for copay and prescriptions.
That’s a very individual question, and depends on a lot of factors. How much is “significantly less,” and how does that amount fit in your budget? Does your employer policy cover any treatments that you use and are not covered by Tricare (such as chiropractic.) Is Tricare doing a good job as a second-payer after your employer plan, or has that been complicated or difficult? Are you seeing any doctors that you want to keep and who don’t take Tricare? Which Tricare are you using right now – Prime or Select? How is that going for you? Are you an active duty family member, or a retiree family member?
Every person will have a different answer to this question.
This is so informative–thank you very much. My employer heavily subsidizes their coverage offerings to the point that I can get one of the higher deductable plans at no premium cost to me so I’m trying to understand of I should decline it. The paperwork/hassle was a great point. The piece I’m not understanding is whether Tricare (select) would cover the costs over their deductable amount but under my employer insurance deductable amount. Thanks for any insight you can offer!