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Govt. Announced New Coverage for National Guard And Reserve Members

The Department of Defense (DOD) announced recently that effective April 25, 2005, eligible National Guard and Reserve members will be able to enroll in and receive a new premium-based, health care plan for themselves and their family members through TRICARE Reserve Select (TRS). The new health care plan, with coverage comparable to that enjoyed by federal employees under the Blue Cross and Blue Shield health insurance plan, will serve as a bridge for reserve component members entering or leaving active duty who may not be covered by civilian employer or other health insurance plans.

Effective on April 2005 a premium-based health care plan will be available to eligible National Guard and Reserve members activated for contingency operations on or after Sept. 11, 2001. TRICARE Reserve Select (TRS) is authorized under the National Defense Authorization Act for fiscal 2005 and, when purchased by a TRS eligible member, provides comprehensive health care coverage similar to TRICARE Standard and Extra for the member and his or her eligible family members.

TPAs will want to become informed on this new program as they may receive inquiries from their clients who have National Guard or Reserve members considering enrolling in this new coverage which may run for up to 8 years under certain eligibility conditions.  The important factor is that this is a premium-based program run by TRICARE, a governmental entity under the Department of Defense. 

SPBA discussed this new coverage with IRS officials who indicated that it is not completely clear that coverage under TRICARE will not cut off COBRA benefits.  Historically, governmental plans will not be treated as "other group health coverage" for COBRA purposes.  However, you will want to review the McGee v. Funderburg case in which the Eighth Circuit Court found that CHAMPUS (the preceding program to TRICARE) is intended by Congress to be a benefit of—and reward for—military serve, and the benefits it provides are not the same as those obtained through private health insurance.  ``Congress intended CHAMPUS and other benefits of military service to enhance—not diminish—the rights of present or former members of the armed services.  Even if CHAMPUS entitlement could qualify as `other group health plan' coverage, the disparities in benefits between it and a typical private plan leave such a coverage gap that a dually covered beneficiary cannot be said to have actually been 'covered' by another plan.  Accordingly, a private group plan could not terminate a beneficiary's continuation coverage merely because the beneficiary was also entitled to CHAMPUS benefits,'' said the Court.  [(1994, CA8), 17 F3d 1122, 17 EBC 2447]

For coordination of benefits purposes, TRICARE officials have verified that all TRICARE coverage is secondary to the private employer-provided plan.  According to TRICARE spokespersons, it is possible that after demobilizing from active duty, the National Guard or Reserve member may determine that TRS may be more cost effective than election of COBRA or USERRA coverage through the employer.  TPAs and their employer clients will want to review their plan language to determine what the impact will be on these individuals should they drop the employer-provided coverage for a period of time and attempt to re-enroll in the employer plan once the TRS coverage period has ended and they return to employment following service. 

A National Guard or Reserve member's employer personnel office will determine eligibility for TRS based on active service on or after Sept. 11, 2001.  Some of the requirements for eligibility are listed below. While TPAs should be aware of this new coverage available to National Guard or Reservist members, we strongly recommend that you suggest they go to the TRICARE website for additional detailed plan information:

-Service period must be for 90 consecutive days or more in support of a contingency operation and, prior to leaving active duty, the member must enter into an agreement with his or her Reserve component to serve in the selected Reserve for at least one additional year.  (For those members who already have left active duty, they must enter into an additional service agreement no later than Oct. 28, 2005 and will receive coverage retroactively.)

-National Guard or Reserve members are eligible for one whole year of TRS coverage for each whole year of "service commitment" in the service agreement, up to a maximum of one whole year of coverage for each 90 days of continuous active duty served in support of a contingency operation.  (For example, members who served a 360-day qualifying active duty period in the selected Reserve are eligible for four years of TRS coverage provided the member agrees to serve at least another four years in the selected Reserve, i.e. 30 days of continuous active duty service, and 1 year of "service commitment" per year of coverage.)

-TRS coverage for members and covered family members will end when the service agreement ends or sooner if the member separates from the selected Reserve, voluntarily drop the TRS program or fails to pay the monthly TRS premiums.

-The Reserve Components include the Army National guard, the Army Reserve, the Navy Reserve, the Marine Corps Reserve, the Air National Guard, the Air Force Reserve, and the U.S. Coast Guard Reserve. Contingency operations include Operations Noble Eagle, Enduring Freedom, and Iraqi Freedom. Reserve Contingency members will need to agree to continued service in the Selected Reserve for one or more whole years to qualify.

TRICARE/Military Health System provides information on the TRS program (including program start date, eligibility, benefits and premiums) is posted on the TRICARE Web site located at http://www.tricare.osd.mil.