In past articles we've discussed how TRICARE Supplement insurance makes sense for employers. However, the real value of this employee supplemental benefit is that it goes both ways. The employee may discover a strong financial incentive to participate, too. Let's examine a hypothetical case of how cost sharing works for an employee who works for an employer who offers this unique benefit.
TRICARE is health insurance for active and retired military members and their families. A TRICARE Supplement is additional, optional insurance that can be offered as a voluntary benefit through an employer. The supplement plan provides coverage for out-of-pocket costs such as doctor co-pays, prescription co-pays, and cost shares. Employers choose to offer the supplement because it enhances TRICARE and makes it a more appealing, viable alternative to major medical insurance. But, why would employees take a hard look at it?
Stability
TRICARE on its own is a robust, government-funded insurance program that satisfies Affordable Care Act minimum coverage standards and offers some nice features. But, there are certain costs TRICARE members still need to pay out of pocket. In most cases, the total out-of-pocket annual liability amounts to $3,000 per family member. Because this figure is subject to the government's cost control regulations, it could go up. The supplement features consistent premium rates over the past three to four years. In the face of rising health care costs, this is extremely appealing for eligible employees who are seeking some insurance stability.
Increased Savings
For those who qualify and are eligible for the TRICARE Supplement, it acts as a consistent and stable method for retired military members to keep out-of-pocket costs low. Consider the hypothetical case of a Selman & Company TRICARE Supplement priced with an annual premium of $810 per year for the employee. The TRICARE Standard deductible ($150) is covered at 100%, leaving the insured a supplement deductible of only $100. In this scenario, the insured person would have a total out-of-pocket expense of $910, instead of costs as much as $3,000. Of course, employer plans vary, and actual savings would differ based on the type of TRICARE plan in effect. However, the supplement plan is designed to help limit a member’s total out-of-pocket liability, regardless of the age of the member.
Military Member with TRICARE Supplement:
|
$3,000 |
TRICARE maximum out-of-pocket cap. This is what someone who has TRICARE could have to pay in one year without a supplement. |
|
($810) |
Premium for the TRICARE Supplement. Example for employee only who has TRICARE Standard/Extra. |
|
($100) |
Deductibles that must be met before Supplement pays out. |
|
$2,090 |
Annual cost savings. |
Compare this example scenario to the maximum out-of-pocket of TRICARE cap of $3,000. The supplement can produce a savings of up to 70%.
Flexibility
The TRICARE Supplement Plan has a deductible of $100 per person/$200 per family each year. Paying for this plan covers co-pays (a set amount) or cost-shares (a percentage, share of the cost) at 100% on TRICARE-approved charges. (Consult directly with TRICARE on what charges are approved by TRICARE.) Per the TRICARE website, cost-shares are higher for out-of-network providers for Retired Service Members, usually 25% of the allowable charge.
Retirees can stay in-network or out-of-network when choosing their primary care physician/doctor. In-network providers tend to charge lower cost shares (approximately 20% of the allowable charge). For what is considered in or out-of-network charges, refer to TRICARE plan details. The TRICARE Supplement covers co-pays or cost shares for TRICARE-approved prescriptions.
Another TRICARE Supplement benefit is that it covers a portion of the TRICARE deductible and a portion of the TRICARE POS (Point of Service) deductible, as well. These percentages vary by employer, with some at 50% and some as high as 100%. Also, TRICARE has a catastrophic cap of $3,000 for Retired Service Members each fiscal year, which would not be a concern if the employee chose TRICARE Standard + TRICARE Supplement Plan. That cost would be Selman & Company’s portion to pay, minus the supplement plan deductible.
Value
Not only can TRICARE Supplement benefit employees by saving them out-of-pocket costs, but this plan can give employers another way to add measurable value to an employee's total compensation plan. In the world of voluntary employee benefits, the win-win scenario is pretty rare.
Employees who want to know if a TRICARE Supplement plan is right for them should inquire here:
Employers who want to know more about how TRICARE Supplement works should read the white paper:
