Age 65, Still Working; Medicare, Tricare for Life, Your Employer’s Health Plan

Mar 02 2011

Published by at 12:47 pm under Military Benefits

What do you do? You will continue to work after age 65. You are covered by your employer’s health plan. However, you’re faced with the Medicare/Tricare for Life (TFL) decision. Here are your options.

  1. Stay with your employer plan and delay Medicare/TFL enrollment. You are allowed to delay Medicare Parts A/B enrollment as long as you are working and covered by an employer’s health plan. There is no Medicare penalty as long as you apply for Parts A/B before you stop working or you enroll in Parts A/B within 8 months of the end of work or the end of the health plan, whichever is first. With this option, you temporarily lose TFL benefits until you enroll in Parts A/B. You can still be enrolled in Part A while you work and not pay a Medicare premium. If your spouse is younger, your spouse will continue under the employer’s health plan or stay under Tricare Standard/Prime or both until age 65.
  2. Go with both the employer plan and Medicare/TFL. Enroll in Parts A/B Medicare, get your TFL benefits and have your employer’s plan. Of course, you’ll pay for all programs and you will probably be over insured, but some folks like the feeling of extra coverage. Again, younger spouses will stay under Tricare Standard/Prime until age 65.
  3. Go Medicare/TFL only. Check to see if you can suspend your employer’s plan before you outright cancel it. If you can suspend the employer’s coverage, you leave yourself an option to return to the coverage should you want to at some point in the future. Enroll in Medicare Parts A/B three months prior to age 65. You actually have until the third month after age 65 to sign up but your coverage will be delayed by a month or two. Again, younger spouses wait until age 65 to be covered by TFL and will stay under Tricare Standard/Prime until then.

As long as you are working and covered by your employer’s plan, the employer’s plan is the first payer, Medicare second, and Tricare third. Check to ensure the coordination between your employer plan and Medicare functions. You’ll have to file manual claims with Tricare under this arrangement—if it is ever necessary.

Once you stop working and if your employer plan is continued into retirement, Medicare will pay first, then your employer’s plan and finally Tricare. You’ll have to file manual claims with Tricare when they are the third payer.

If you are TFL only, Medicare is the first payer and Tricare acts as a Medicare supplement. Claims are filed by the health care providers to Medicare and Medicare automatically forwards the residual bill to Tricare. The Tricare portion of TFL is invisible to the health care providers under TFL so just ensure your providers accept Medicare and you are golden. Any Medicare provider works for TFL. Just show your Medicare card for treatment since there is no need to show a military ID card for the TFL coverage.

Most people prefer to use the Tricare drug coverage. If this is you, do not enroll in any another drug plan. Enrollment in another plan causes it to pay first and you’ll be filing manual claims with Tricare. Plus, enrollment in another drug plan disqualifies you from enrollment in the Tricare Mail Order Pharmacy (TMOP). Always use the TMOP when possible to get the greatest benefit and to reduce costs on the DOD.

See this Medicare and You handbook for easy to understand information or go to

35 responses so far

35 Responses to “Age 65, Still Working; Medicare, Tricare for Life, Your Employer’s Health Plan”

  1. Bob McDonaldon 09 Mar 2011 at 1:59 pm

    Thanks, good overview of my options. Regarding TFL, am I automatically enrolled in that at 65, or must I specifically enroll? At present, I am in Tricare Standard in addition to my employer’s health care plan.

  2. John Woodson 09 Mar 2011 at 2:16 pm

    I am employed but I suspended the medical portion of company health plan except for vision and dental and therefore, accepted Medicare and Tricare for Life. Be advised that under “Obamacare” and probably w/o congressional “knowledge”, that the premiums for my company plan for any individual over 57 exceed $8500 per year and we have a high deductible w/ HSA for those eligible. United Healthcare, our association insurer uses an age-based premium, which I believe most carriers do. Don’t believe my employer is providing a “cadillac” plan under the new law. And DOD doesn’t understand why employers ask the employee to suspend the employer provided health insurance, ahh!

  3. Richard Schnureon 09 Mar 2011 at 2:52 pm

    Some clarification appears to be in order for those of us enrolled in the USFHP. It seems like there is always an exception of course. If you are TFL and enrolled in the Uniformed Services Family Health Plan (USFHP), that plan is the first payer and if you are also enrolled in Medicare, Medicare acts as the supplement to that plan.

  4. edward marvinon 09 Mar 2011 at 4:57 pm

    Shane. Outstanding article. I second USAA’s recognition! Ed Marvin

  5. Betty Mahaffeyon 09 Mar 2011 at 6:29 pm

    Can you explain what happens when someone is on Medical Assistance (Medicaid) and also Medicare and TFL. Who pays first?
    Why does TFL not kick in before Medicaid since Medicaid is subject to Estate Recovery in the end? Why can one not use the Mail Order Pharmacy if they have another coverage?

  6. Doug Fenwickon 09 Mar 2011 at 7:32 pm

    Does this also apply to my wife?

  7. Bob Dunnon 09 Mar 2011 at 8:56 pm

    Whoever wrote the the “washingtonscene” editorial “Job Killer for Military Retirees” should have been required to incorporate this fine piece, by Shane Ostrom, into their inflammatory editorial. Perhaps I’m naive, but I don’t think the National Commission on Fiscal Responsibility and Reform proposed making employers, who do provide health benefits, reimburse for for second or third payer claims.

  8. Ron Conteon 09 Mar 2011 at 9:47 pm

    Issues to ponder. I am 77 years and work full time as a licensed Special Ed teacher with the option to enroll in a county/state med insurance plan. However, I am in enrolled in Tri Care Plus and pay a means tested part B Medicare fee of $236 per month (established well before so called Obama care). Under Tri Care plus I have a primary care physician who will see me any time and respond immediately to e-mail requests for prescription refills that also have no co-pays. My retirement began after 30 yrs service in 1989 at age 56 at which time I opted to be covered under existing military medical retirement plans rather than pay for the civilian company plan that was available to me. At age 65 I chose Tri Care Plus (as primary and Medicare part B as backup for esoteric specialist referral purposes) simply because of the overall advantages of military medical care that is never driven for excessive profit motives. The Tri Care doctors and medical staff I engaged with are not only highly competent professionals but also meet the same demanding military standards retirees have lived by during their service careers.Note: care may available from VA regardless of Medicare part B participation.

  9. Robert Griffinon 09 Mar 2011 at 11:06 pm

    An important consideration if you are still working after age 65 is the cost of part B. Premiums are based upon your income and can be quite pricey. A table of premiums can easily be found on the internet and should be checked prior to making this decision.

  10. Shane Ostrom, CFP®on 10 Mar 2011 at 7:34 am

    Doug, yes it does.

  11. Bill McNatton 10 Mar 2011 at 9:28 am

    As Richard says, there are always exceptions. If you are retired, over 65, have FEHB, Medicare Part B and USFHP, FEHB “is supposed to” pay first, but only what they “would have paid as a supplement to Medicare.” You cannot use Medicare or military facitities, and cannot get routine care outside the geographically-limited USFHP . USFHP is “supposed to” pay what FEHB does not pay. If you are foolish enough to try this system. good luck. You will be writing your congressional representative(s). Hopefully not as long and as often as I have.

  12. Bill McNatton 10 Mar 2011 at 9:28 am

    As Richard says, there are always exceptions. If you are retired, over 65, have FEHB, Medicare Part B and USFHP, FEHB “is supposed to” pay first, but only what they “would have paid as a supplement to Medicare.” You cannot use Medicare or military facitities, and cannot get routine care outside the geographically-limited USFHP . USFHP is “supposed to” pay what FEHB does not pay. If you are foolish enough to try this system. good luck. You will be writing your congressional representative(s). Hopefully not as long and as often as I have.

  13. Tom Szczepaniakon 10 Mar 2011 at 12:12 pm

    To “Ron Conte”, consider yourself fortunate. I reside in Warner Robins Georgia. A retiree can forget medical care of any kind on Robins AFB. The last time I called trying to get an appointment because I had bacterial pneumonia I was told by the appointment desk to “go to a Med Stop downtown”.

  14. Marc Yerginon 11 Mar 2011 at 12:18 pm

    I am employed with employer health care as primary, Medicare as secondary, and TFL as tertiary. All of my providers are capable of filing claims with all three in correct sequence. The only thing I have found is sometimes sequential filings get screwed up (i.e., TFL first) then I have to call and get it straightened out. Health care providers have the capability of filing to all payers and it is their responsibility to file in a timely manner. If they don’t then they may not only get paid but under most circumstances you are not responsible for the bill.

  15. Bill Hippleon 13 Mar 2011 at 6:58 pm

    How does it work (Tricare Standard/Extra, TFL, Medicare A/B) if my “retired” spouse turns 65 a couple years before I do? Currently we have employer based insurance w/Tricare as 2nd payer, but may switch that next year when she’s 65 (the cost of the employer insurance increased from about $85 to 150 bi-weekly this year, plus co-pay, deductible, etc. changes).

  16. Bill Hallon 14 Mar 2011 at 10:28 pm

    Just to clarify, for those with US Family Health Plan, that plan is the first and only payer for medical services. Medicare does not act as a supplement.
    For those with FEHBP, consider suspending the federal plan and using either the US Family Health Plan (if available in your area) or Tricare for Life. Suspending FEHBP allows you to get back into your federal coverage later if you decide to. Having just USFHP or TFL eliminates over-insuring yourself and makes it unlikely you’ll have to file claims or deal with billing errors and confusion.

  17. Richard Paul Shafferon 09 Apr 2011 at 9:19 pm

    I am retired 20 years military and am 61. I am on Tricare Prime. When I turn 65 may I stay on Tricare Plus or do I have to enroll in Medicare Part A and B and go on Tricare for Life. I plan to work until I am 70. I would like to stay on Tricare Prime and enroll in Medicare at age 70 when I retire. Tricare Prime is my only insurance.

    If I go on Medicare part A and B. I have to pay $165 a month for part B because of my income. I will go on Social Security at Age 70 to save taxes (1/2 of Social Secuity taxed).

    So may I stay on Tricare Prime after Age 65 or do I have to enroll in Medicare Part A and B if I am still working?

    The Tricare Prime is much cheaper. I am in perfect health and have zero health problems.

  18. Shane Ostrom, CFP®on 12 Apr 2011 at 12:47 pm

    RPShaffer, Tricare Prime and Standard plans only take you as far as age 64. After that, you have to be on TFL unless you are on an employer plan. Since you aren’t covered by an employer health plan, if you don’t enroll in Medicare A and B at age 65, you will pay a penalty for late enrollment later. ‘Plus’ is a program that allows you to be seen at a military facility but it is not always a substitute for total health coverage. If you can’t be seen at the military facility you’ll need a health plan to back you up out on the civilian market. See this Tricare site:

  19. Mark Coppaon 19 Jul 2011 at 7:44 pm

    Have you seen this?
    The Coburn plan to reduce the debt:

    Click on the plan detail link for a 621 page pdf document. Several details on military health care changes are shocking; includes the elimination of Tricare PRIME and $2000 enrollment fees for Tricare Standard.

    This Coburn guy is supposed to be on our side…

  20. Roy Schuleron 05 Dec 2012 at 11:50 am

    Subj. Retired Military, retired Govt. civilian, still working.
    I submitted the following to OPM and they blew me off!
    I will turn 65 on January 29th 2013, and will become Medicare eligible. I’m very confused regarding what I must/should do to maintain my current state of healthcare coverage.
    I have Tricare Standard coverage (secondary payer) as a retired member of the U.S. Air Force, and have FEHB insurance with United Healthcare (primary payer) as a retired Federal Govt. civilian employee. Currently, the two programs cover virtually all of my healthcare costs.
    In order to keep the Tricare (Tricare for Life) after turning 65, I must enroll in, and pay for, Medicare Part B.
    I’m worried that, if I enroll in Medicare, the healthcare available to me will be reduced due to Medicare becoming the primary payer, even though I’ll be spending more. But, if I don’t enroll in Medicare my costs will increase because I will lose Tricare coverage.
    On the other hand, I see that I have the option to suspend my FEHB coverage while in Medicare – that will save some money, but I don’t know what affect that will have on the amount or type of healthcare available. Is there a benefit to keeping FEHB as a third coverage (secondary payer? or third behind Tricare?).

    Can you please advise on my options, and pros/cons of:

    * Enrolling in Medicare Parts A&B while keeping FEHB and Tricare
    * Enrolling in just Medicare Part A, keep FEHB, and lose Tricare
    * Enrolling in Medicare Parts A&B and keep Tricare while suspending FEHB
    Since then I realized that I can’t suspend FEHB because it also covers my wife who has a few years before reaching age 65.
    So… Is FEHB considered an employer plan? If so, can I stay on Tricare Standard without joining Medicare?

    Thank you,

  21. Shane Ostrom, CFP®on 06 Dec 2012 at 1:50 pm

    Roy, as long as you work, your employer health plan always pays first, then Medicare, then TFL. Tricare is always last by-law. Once retired, Medicare pays first, then FEHB, then Tricare (this becomes an administrative pain). Your spouse stays on either your FEHB or Tricare Standard/Prime or both until she turns 65. Tricare Standard and Prime end at age 65 for everyone by-law–you can’t keep Standard or Prime.

    TFL is a partnership between Medicare and Tricare where Tricare acts as a Medicare supplement so it sweeps up all residual costs after Medicare pays–why pay for another plan to get in the middle of that? Remember as a retiree it is Medicare, FEHB, then Tricare in that order of payment if you keep FEHB.

    Your options at age 65:
    – Stay on FEHB with no Medicare/TFL/Tricare. As long as you work and are covered by employer health care (yes, your FEHB is your employer plan), you can delay the Medicare/TFL option without penalty. Your spouse would continue with FEHB or Tricare Stan/Prime or both. Pick up Medicare/TFL just prior to retirement.
    – Go with both FEHB and Medicare/TFL. Pay for both. Spouse stays with FEHB or Tricare or both.
    – Go Medicare/TFL only and suspend FEHB if possible. Pay Medicare Part B premiums only. Spouse stays with Tricare only until age 65.

    Clear as mud? Shane

  22. John Kretschmeron 10 May 2013 at 12:23 pm

    I am retired AF and am about to retire Sept 2013 from federal civil service. I will turn 65 in August. My wife is currently retired and will be 65 in June. I know I can continue my Blue Cross basic into retirement but my question is will I be able to continue Tricare Standard as a secondary insurer? …….or does Tricare Standard end when you are 65? Is a better option Medicare/TFL? The premiums are about the same for BC and Medicare

  23. Shane Ostrom, CFP®on 13 May 2013 at 10:39 am

    John Kretschmer, Tricare Standard and Prime must stop after age 64 by law. You have the option to 1) suspend your federal retiree health program in order to maintain future eligibility to the federal program and use Medicare/Tricare for Life (TFL) exclusively. Or, 2) utilize both your Medicare/TFL and your federal program if you pay for both. If you use both plans, the Medicare pays first, then the federal plan and Tricare last. You have an option to 3) delay Medicare/TFL and use the fed retiree plan only BUT you will pay a late enrollement penalty to return to Mediare/TFL should you ever want to fire up the Medicare/TFL later–option 3 is not recommended.

    Tricare portion of TFL is a supplement plan for the Medicare coverage. So far, the Tricare supplement to Medicare is no charge. You just pay Part B Medicare premiums. Medicare pays the primary portion of the tab and Tricare sweeps up the residual charges.

    Having the Medicare with the Tricare supplement cover under TFL is total coverage; no need for other health insurance. Our calls and emails from people confirm the TFL works very well on its own. Shane

  24. John Kretschmeron 14 May 2013 at 12:43 pm

    Thanks Shane. I appreciate your advice. I think Medicare/TFL is the answer.

  25. John Kretschmeron 23 May 2013 at 7:30 am

    You responded to my earlier question on May 13 and thanks for your advice.

    I’ve just been informed by my Human Resources dept that I cannot suspend my FEHB in retirement because I am no longer eligible to retire under FERS. Four months ago I opted for the Federal Reserve retirement plan because it offered a better annuity. I’m scheduled to retire on September 1. I’m still covered by Medicare/TFL but was hoping to suspend FEHB as a backup.

    Do you have any information on this? I also contacted OPM about this but havent heard back yet.


    John Kretschmer

  26. Edward P Gallagheron 28 Aug 2014 at 3:28 pm

    I am a 70 year old Army retiree fully employed by a major corporation with an excellent health insurance plan but with high deductibles. I am currently not enrolled in Tricare but am in Medicare part A, although I have not ever used it. My wife, who is 56, has Lymes disease, and we have paid those high deductibles this year which have become expensive. If I enroll in TFL, will they pay the deductible expenses not covered by my employer insurance company?

  27. Shane Ostrom, CFP®on 29 Aug 2014 at 7:32 am

    Edward Gallagher, When you say you are in a high deductible health plan, I assume you mean a Health Saving Account/Plan (HSA). While you are not currently covered by Tricare for Life because you are not enrolled in Medicare Part B, your spouse is still in Tricare Prime or Standard (probably Standard) because she is not yet age 65. All Service retirees under age 65 are covered by Tricare Standard whether you have used it or not; it’s automatic with DEERS enrollment and a retiree ID Card.

    Technically, a person covered by Tricare as your spouse cannot be a part of a HSA because they are covered by Tricare. HSAs are for people who are not covered by other health insurance. You on the other hand may get a pass because you only have Part A Medicare but I would check with your employer HR dept. Check this web page about eligibility.

    You will want to check with your Tricare provider to determine your DEERS and ID Card status if you are unsure. Chances are all you need to do for your spouse is file manual claims with Tricare Standard for reimbursement. Shane

  28. Dave Andersonon 22 Nov 2014 at 12:09 pm

    I’m turning 65 in 2015, plan to continue working, and am covered by my employer with an excellent plan at a very reasonable cost. Tricare standard currently picks up nearly all deductibles, co-pays, etc. My spouse is past 65, but not eligible for SS or medicare in her own right. She has remained covered under Tricare standard because of medicare denial/ineligibility. I understand the options, very well presented – much thanks. Here’s what I’m missing in my situation. My employer allows me to cover myself only so, I could choose that path and delay Part B and TLF for myself. Is my spouse then eligible to enroll in Medicare Part B and TLF if I delay my enrollment in both Medicare and TLF until I stop working? Otherwise, I’ll probably opt out/suspend if possible the employer plan and just accept the 400%+ (perhaps more because the employer forces pension payments @65) increase from what I pay now.
    Great article!

  29. Shane Ostrom, CFP®on 24 Nov 2014 at 7:38 am

    Dave Anderson, normally I would state “yes” your spouse over age 65 is eligible for Medicare A&B/TFL while you continue to work and remain covered by an employer health plan. However, you state she isn’t Medicare eligible or has been denied Medicare. Spouses are eligible if the other spouse is eligible and you are. There is also a SS spouse retirement benefit even if the spouse has no work history. The spouse benefit is based on the working spouse’s work history. You could “file and suspend” your SS retirement benefit when your turn your “SS Full Retirement Age” to get your spouse her “SS spouse benefit.” I suggest you talk to Medicare folks and enroll your spouse in Medicare A&B and TFL plus look into the SS spouse benefit and “file and suspend” so you are ready when eligible for the SS. Shane

  30. Floyd Hancockon 09 Jan 2015 at 12:16 pm

    I am retired military 0f 29 years. I work full time as federal employee and have Blue Cross. I will be 65 in early March and my wife will be 65 in Early April. I keep getting letters saying I must sign up for Medicare. Do I need to do that. I am looking at two options.
    1. Can I suspend BC at age 65 and go on TCFL? Actually, can I wait until My wife is 65, one month later? For both of us. Would I need to sign up for Medicare Part.

    2. Just keep my BC as long as I am working and then upon preparing to retire in a year or more, and then sign up for Medicare? Would I be penalized and pay more for Medicare?

    I have also been told there is a reasonable Supplement to TCFL that does the same thing as Medicare and is less expensive. Can I just wait and sign up for that?


  31. Shane Ostrom, CFP®on 09 Jan 2015 at 12:33 pm

    Floyd, as long as you work and have an active employer health plan, you can delay Medicare until you retire.

    If you enroll in Medicare A and B while working and covered by an employer plan, you’ll be paying for a lot of coverage. Enrollment in Medicare A and B and having Tricare eligibility automatically enrolls you in Tricare for Life (TFL). TFL coverage does not require a supplement policy because the Tricare portion of TFL is the supplement for the Medicare A&B parts.

    Check with your HR office for the ability to suspend your fed plan. Suspending your fed plan at some point, whether now or the future, is a good plan. Don’t ‘cancel’ your plan unless you have to. Also ask about what suspension or cancelation of your fed plan does to your options when you retire from the fed service. Shane

  32. TG Floon 18 Dec 2015 at 6:22 pm

    I’m retired Army and working in a federal civilian job. I’m told I should go ahead and pay into Medicare through my Fed Job in addition to Tricare Prime. I don’t turn 65 for another 18 yrs. I’m inclined to just stick with Tricare Prime/United Healthcare as it sufficiently covers me and my family. It’s my understanding that once I turn 65, I’ll automatically be enrolled in Tricare For Life and Medicare at no additional cost. Am I making the right decision?

  33. Shane Ostrom, CFP®on 21 Dec 2015 at 8:57 am

    TG, at age 47 there is not much you can do in regards to Medicare/TFL. You have to pay Medicare payroll taxes in your paycheck like we all do. This pays for Part A Medicare so that when you turn age 65, your Medicare Part A is free. There is nothing you can do to “pay into Medicare” at this point so I don’t know where you are getting your advice. At age 65, you enroll in Parts A and B Medicare and Part B will cost you a monthly premium. Tricare for Life TFL is automatic once you enroll in Parts A and B Medicare. Who knows how things will actually be by the time you turn age 65.

    Until then, you use Tricare Prime as your health plan or use your federal health plan or use both. I’d forget about Medicare and TFL for now. It will be a whole different world by then. Thanks…Shane

  34. Mark McDermotton 08 Mar 2016 at 11:21 am

    I am a retired Naval officer. My wife and I have been using my employers insurance coverage(Cigna) and been very happy with it. I am turning 65 and going on medicare. My wife is just 62. We are retiring and don’t know whether we should continue with Cigna for her or use Tricare, or tricare w/ supplemental coberage. We will not be near a military base. I am retiring from my second career in July. We must decide whether to take the medical benefit from my employer or not.

  35. Shane Ostrom, CFP®on 10 Mar 2016 at 9:58 am

    McDermott, check out this article:

    See if this helps clear some air…Shane