TRICARE vs. FEHB for Military Retirees in Federal Jobs
Last Updated: June 24, 2026
If you retired from the military and took a federal civilian job, you're sitting on a health-insurance setup most feds would envy: you can keep TRICARE, you can stack it with FEHB, and at retirement you can suspend FEHB and pay almost nothing while keeping it as a lifetime backup. The catch is a five-year rule that quietly disqualifies people who never saw it coming.
Here's the 2026 cost picture and the strategy that protects you.
Key Takeaways
- You can have both. TRICARE and FEHB coexist; when both are active, FEHB pays first and TRICARE pays second, usually leaving near-zero out-of-pocket.
- TRICARE is far cheaper: $765/year for Prime family vs. $2,000-$4,500/year for an FEHB family plan in retirement.
- The 5-year-rule trap: TRICARE years count toward FEHB retirement eligibility, BUT you must be enrolled in FEHB on your retirement date.
- The move: enroll in FEHB your final year, retire with it active, then suspend it (Form RI 79-9) and live on TRICARE.
- Never cancel FEHB, only suspend it. Suspension keeps your reinstatement right for life.
Yes, You Can Run Both
Military retirees keep TRICARE eligibility no matter where they work, including the federal government. You can be enrolled in TRICARE Prime or Select and an FEHB plan simultaneously. When both are active and you're under 65:
- FEHB pays first,
- TRICARE pays second, covering most or all of the remaining cost-share,
- and your out-of-pocket cost is typically zero or close to it.
That's a strong position. But running both means paying two premiums, and TRICARE alone is so cheap that the real question is whether you need FEHB at all, and when.
The 2026 Cost Gap
Here's why this matters. TRICARE is dramatically cheaper than carrying FEHB on your own.
| Plan | 2026 annual cost |
|---|---|
| TRICARE Prime, individual (Group A retiree) | $382 |
| TRICARE Prime, family (Group A retiree) | $765 |
| TRICARE Select, individual (Group A) | ~$187 + deductible |
| TRICARE Select, family (Group A) | ~$375 + deductibles |
| FEHB family plan, in retirement | ~$2,000-$4,500 |
"Group A" means the sponsor's initial enlistment began before January 1, 2018; Group B rates run slightly higher. A TRICARE Prime family at $765 against an FEHB family plan at $2,000-$4,500 is a $1,235-$3,735 difference every year. Over a 25-year retirement, that compounds into real money. Compare specific FEHB plan costs with our FEHB Premium Calculator.
The Trap: The FEHB 5-Year Rule
To carry FEHB into federal civilian retirement, you must:
- Be enrolled in FEHB on the date you retire, AND
- Have had continuous FEHB coverage for the five years immediately before retirement (or since your first chance to enroll).
For military retirees there's a twist that matters: TRICARE coverage counts toward that five-year requirement. So a military retiree who keeps TRICARE through their whole federal career, then enrolls in FEHB in the final year before retiring, can still qualify, because the TRICARE years count.
But the second half of the rule is where people get burned: you must be actively enrolled in FEHB on your retirement date. Coast on TRICARE alone all the way to retirement and skip that final FEHB enrollment, and you lose FEHB eligibility in retirement permanently. The fix costs one year of premiums.
The Strategy: Enroll, Retire, Suspend
This is the play that saves thousands:
- Enroll in FEHB during Open Season in your final year of federal service (satisfies the enrolled-on-retirement-date requirement).
- Retire with FEHB active.
- Immediately suspend FEHB with OPM Form RI 79-9, box D (TRICARE).
- Pay nothing for FEHB while suspended; keep TRICARE Prime or Select.
- Reinstate FEHB during any future Open Season if you ever need it.
The reinstatement right doesn't expire. That gives you a zero-cost FEHB safety net for life, while you actually live on inexpensive TRICARE. Never cancel FEHB to do this, always suspend, because cancellation kills the reinstatement right and suspension preserves it.
What Happens at 65
TRICARE Prime and Select end at 65 and you transition to TRICARE For Life. TFL has no premium of its own, but it requires Medicare Part B ($185/month in 2026, more with IRMAA surcharges for higher-income retirees). The coordination at 65 is excellent: Medicare pays first, then (if you reinstated it) FEHB, then TFL, which usually means near-zero out-of-pocket. Many retired military feds keep FEHB suspended and run Medicare + TFL, paying only the Part B premium. If your income pushes you into high IRMAA tiers, that's the one place to run the numbers carefully.
FedTools 2026 TRICARE-FEHB Decision Matrix
| Scenario | Annual cost (family) | Notes |
|---|---|---|
| FEHB only (mid-tier, working) | ~$4,200-$5,400 | Before retirement; employer covers ~72% |
| TRICARE Prime only (Group A) | $765 | No deductible; MTF access |
| TRICARE Select only (Group A) | $375 + deductibles | $175 individual deductible |
| TRICARE + FEHB (working) | both premiums | Essentially $0 out-of-pocket after coordination |
| FEHB suspended, TRICARE Prime (retiree) | $765 | FEHB backup preserved; most flexible |
| TRICARE For Life + Part B (65+) | $2,220 (Part B only) | TFL covers Medicare cost-shares |
Compare Your Options
Use our free FEHB Premium Calculator to price your specific FEHB plan, then weigh it against the TRICARE figures above. Compare FEHB costs now →
Frequently Asked Questions
Can a military retiree who becomes a federal employee keep TRICARE?
Yes. Military retirees keep TRICARE eligibility regardless of civilian employment. You can be enrolled in both TRICARE (Prime or Select) and an FEHB plan at the same time.
If I have both TRICARE and FEHB, which pays first?
FEHB pays first; TRICARE pays second. In practice this usually leaves zero or near-zero out-of-pocket for in-network care, because TRICARE covers most of what FEHB doesn't.
Does TRICARE count toward the FEHB 5-year rule for retirement?
Yes, with one condition. TRICARE coverage counts toward the five-year requirement, but you must be enrolled in FEHB on your actual retirement date. You cannot retire on TRICARE alone and carry FEHB into retirement. Enroll in FEHB in your final year, then suspend it after you retire.
How do I suspend FEHB in retirement to use TRICARE?
Submit OPM Form RI 79-9 and check box D (TRICARE). Premiums stop and your enrollment goes into suspended status. You can reinstate during any future Open Season, so never cancel when you can suspend.
What changes at age 65 if I'm relying on TRICARE?
TRICARE Prime and Select end at 65 and you move to TRICARE For Life, which requires Medicare Part B ($185/month in 2026). TFL has no premium beyond Part B. You can reinstate suspended FEHB at 65 if you prefer FEHB plus Medicare.
Is TRICARE Prime or Select better for a fed?
Prime ($382/year individual, Group A) has no deductible and lower copays but requires a primary care manager. Select (~$187/year) has a deductible and more flexibility. Both cost far less than most FEHB plans; your location and MTF access usually decide it.
Related Resources
- FEHB Premium Calculator: Price your specific FEHB plan for 2026
- FEHB & Medicare Part B Guide 2026: The Part B interaction at 65
- FEHB Value in Retirement 2026: When FEHB is worth keeping
- Military Service Buyback Guide 2026: The military-to-federal transition
- Military-to-GS Pay Translator: Translate military pay to a GS equivalent
Sources: TRICARE.mil FEHB FAQ, TRICARE 2026 Costs and Fees Preview, MOAA 2026 TRICARE Plan Costs, OPM Healthcare Insurance FAQs.