With small budgets and shifting priorities, the mission for the U.S. military is changing. An estimated 123,900 service members will leave the Services within the next five years. Some folks signed up for one tour and only intended to stay in for that enlistment. Others joined knowing they wanted to make this a career. Regardless of the reasons for separating from the military, a significant number of current service members will not make the military a career.
When I read articles about downsizing, I immediately think about how this would impact our family; specifically what happens to our pay and benefits. Any entitlement to pay and benefits after your service member leaves the service will depend on the circumstances of separation.
For example, if the service member retires; he or she is eligible for retirement benefits. Unfortunately, most folks who are separating due to the drawdown are not eligible for retirement benefits. If you fall into the later category, here are some tips to help you prepare for life outside the gates:
Pay: This is a big one. You and your service member will need to decide how you will earn an income. It may be helpful to consider the following:
- Your taxable and nontaxable income (i.e. allowances such as a housing allowance (BAH) are not taxable)
- Your current and estimated expenses (i.e. if you are living on the installation now and will move back to your home town, check out the local rental rates, property values, utility costs, etc.)
- The cost of living in your projected job market
- Your estimated income needed to meet or exceed your current standard of living
Health Care: Health care is the largest non-monetary part of the service member’s benefit package. While the service member may be eligible for service-connect health care for life through the Department of Veterans Affairs (VA), your family generally loses coverage once the service member separates from the Service.
You may be able to receive health care coverage in the individual market, a health care exchange, or through an employer’s plan. Your family may be eligible to participate in TRICARE’s Transitional Assistance Management Program for 180 days of premium-free transitional health care benefits after regular TRICARE benefits end. After this coverage ends, your family may be eligible for the Continued Health Care Benefit Program (CHCBP).
CHCBP is a premium-based program offering temporary transitional heath coverage from 18-36 months after TRICARE eligibility ends. A family premium for 2013 is $2,555 per quarter.
Life Insurance: Whether you are separating from military service or retiring, you will need to decide what to do with your Servicemembers’ Group Life Insurance (SGLI) coverage. SGLI stays with you for an additional 120 days after you leave the service, and then it stops for good. You need to decide to either take Veterans’ Group Life Insurance (VGLI) or get your own individual life insurance.
For those who sustained injury or have chronic conditions, it is imperative to look at whether or not outside insurers will cover you. You can convert to VGLI in the specified time period without proof of good health. After that time period, you will have to prove you are in good health.
Keep in mind that Family Servicemember’s Group Life Insurance (FSGLI) provides coverage for your spouse and children. It may be converted to an individual policy, but not to VGLI. Companies listed on the VA website will convert spouse health coverage without proof of good health during a specified time period.
Ancillary benefits: Ancillary benefits may include the Commissary, Exchange, reduced child care fees, or discounts in your local community – all part of the overall military lifestyle and some elements of the military compensation package.
In most cases, you will not be able to continue to access these privileges; however, some communities may provide benefits for veterans. It is recommended you ask each establishment to determine what type of documentation you need to show if you are eligible to participate. You may find there is another type of discount, such as a community membership, for folks who live in a specific neighborhood, which is available to you instead of a military discount.
This is the first of a blog series discussing transition from military life to civilian life. What other transition topics would you like to see? Leave a comment below!