Veterans Affairs: “Gray Area Retirees”—
Issues and Related Legislation
Douglas Reid Weimer
Legislative Attorney
September 10, 2009
Congressional Research Service
7-5700
www.crs.gov
R40815
CRS Report for Congress
P
repared for Members and Committees of Congress
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
Summary
The United States Department of Veterans Affairs (VA) provides a broad range of benefits and
services to American veterans and to certain members of their families. In addition, the
Department of Defense (DOD) offers a variety of benefits to veterans who are also military
retirees. When members of the National Guard or the Reserve who have not yet reached age 60
retire (usually after at least 20 years of service), however, they are not entitled to certain federal
benefits, including health care. These military retirees are commonly known as “Gray Area
Retirees” (GARs). These persons may not necessarily meet the relevant statutory definition of
“veterans” for VA benefit purposes, nor are they eligible for DOD health benefits until they are
eligible for military retired pay at age 60.
In order to be eligible for most VA benefits, the claimant must be a veteran, or in some cases, the
survivor or dependent of a veteran. However, not every person who has served in the military is
considered to be a “veteran” for the purposes of VA benefits. The concept of “veteran” is defined
by federal statute and includes various criteria, such as discharge status, “active” service, time of
service, and length of duty.
Based upon their military service and the eligibility criteria, it may be difficult for members of the
National Guard and members of the various Reserve Components to qualify as “veterans” for
purposes of VA benefits. Therefore, not every member of the Guard or the Reserve will be
considered a “veteran” for the purposes of VA benefits.
Congressional interest has focused on this group of military retirees, and bills have been
introduced in the 111th Congress, which, if enacted, would provide certain benefits to this
particular group of military retirees. Pending bills in the first session of the 111th Congress are
H.R. 270, TRICARE Continuity of Coverage for National Guard and Reserve Families Act of
2009; H.R. 972; H.R. 2647, National Defense Authorization Act for Fiscal Year 2010; S. 731
(companion bill to H.R. 270); and S. 1390, National Defense Authorization Act for Fiscal Year
2010.
Congressional Research Service
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
Contents
Introduction ................................................................................................................................ 1
Benefits Provided by the VA and the DOD .................................................................................. 1
VA Benefits........................................................................................................................... 2
The “Active Duty” Requirement ..................................................................................... 2
The “Length of Service” Requirement ............................................................................. 2
VA Determination on a Case-by-Case Basis .................................................................... 3
DOD Retiree Health Benefits ................................................................................................ 3
Gray Area Retirees (“GARs”) ..................................................................................................... 4
The National Guard and the Reserves—Background and Purpose.......................................... 4
Career Pattern ....................................................................................................................... 4
Spousal Survivor Benefits ..................................................................................................... 5
Congressional Interest and Proposed Legislation ......................................................................... 5
Conclusion.................................................................................................................................. 6
Contacts
Author Contact Information ........................................................................................................ 7
Congressional Research Service
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
Introduction
The United States Department of Veterans Affairs (VA) provides a broad range of benefits and
services to American veterans and to certain members of their families. In addition, the
Department of Defense (DOD) offers a variety of benefits to veterans who are also military
retirees. Retired members of the National Guard or the Reserve Components who have not yet
reached age 60 (and who have not been recently deployed to a combat theater),1 however, are not
entitled to the same federal benefits, such as health care, that other veterans and military retirees
receive.2 These military retirees are commonly known as “Gray Area Retirees” (GARs). These
persons may not necessarily meet the relevant statutory definition of “veterans” for VA benefit
purposes,3 nor are retired members of the National Guard or Reserve eligible for DOD benefits
until they reach age 60.4 Congressional interest has focused on the GARs, and bills have been
introduced in the 111th Congress, which, if enacted, would align certain benefits for this particular
group of retirees with benefits offered to other military retirees.
This report examines the current VA and DOD benefit eligibility for members of the National
Guard and the Reserves. It considers the benefit status and situation of GARs and summarizes
pending legislation that would impact and enhance the GARs’ eligibility for certain federal
benefits. Pending bills in the first session of the 111th Congress are H.R. 270, H.R. 972, H.R.
2647, S. 731, and S. 1390. The contents of these bills and their legislative statuses are
summarized below in the section titled “Congressional Interest and Proposed Legislation.”
Benefits Provided by the VA and the DOD
Various benefits are provided by the VA to “veterans,” and other benefits are provided by the
Department of Defense (DOD) to certain military retirees. These two benefit systems are
examined below.
1 The National Defense Authorization Act for Fiscal Year 2008 (NDAA, P.L. 110-181) was signed by President George
W. Bush on January 28, 2008. The NDAA extends the period of enhanced enrollment opportunity for health care
eligibility provided to veterans who served in a theater of combat operations after November 11, 1989 (commonly
referred to as combat veterans or OEF/OIF veterans) as follows:
Combat veterans who were discharged or released from active service on or after January 28, 2003, are now eligible to
enroll in the VA health care system for five years from the date of discharge or release. This means that combat
veterans who were originally enrolled based on their combat service, but later moved to a lower Priority Group (due to
the law’s former two-year limitation) are to be placed back in the priority for combat veterans for five years, beginning
on the date of their discharge or release from active service.
Note: The five-year enrollment period applicable to these veterans begins on the discharge or separation date of the
service member from active duty military service, or in the case of multiple call-ups, the most recent discharge date.
Combat veterans who were discharged from active duty before January 28, 2003, but did not enroll in VA health care
now have three years to enroll and receive care as combat veterans. This three-year period of enhanced eligibility began
on January 28, 2008, and expires on January 27, 2011.
2 For example, a member of the Guard or the Reserves could retire at age 41 with 20 years of service. However, the
retiree would not be eligible for certain federal benefits (e.g., health care and retirement pay) until 18 years later, when
the retiree reaches age 60. This 18-year period is usually considered to be the “Gray Area.”
3 Title 38 of the U.S. Code provides the statutory criteria for the definition of “veteran” and the subsequent eligibility
for VA benefits.
4 Under §§ 1074, 1076, and 1223 of Title 10 of the U.S. Code, members of the retired service are eligible for
TRICARE Standard upon acquiring eligibility for retired pay at age 60.
Congressional Research Service
1
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
VA Benefits
Among the benefits extended to veterans through the VA are health care and related services, such
as nursing homes, clinics, and medical centers; education, vocational training, and related career
assistance; home financing; life insurance; burial benefits; benefits for certain family survivors;
and financial benefits, including disability compensation and pensions.
In order to be eligible for most VA benefits, the claimant must be a veteran, or, in some cases, the
survivor or the dependent of a veteran. Significantly, however, not every person who has served
in the military is considered to be a “veteran” for the purposes of VA benefits. By federal statute,
for VA benefit purposes, a “veteran” is defined as a “person who served in the active military,
naval, or air service, and who was discharged or released therefrom under conditions other than
dishonorable.”5 Various criteria—including discharge status, “active” service, time of service
(whether during “time of war”), and length of duty are all factors considered in determining
whether a former service member is a “veteran” for the purposes of VA benefits.6 Two particular
elements of these criteria—“active duty” and “length of service”—are often difficult for members
of the Guard and the Reserves to meet. As a result, these service members, having not met the
statutory threshold criteria for “veteran,” are often not eligible for VA benefits. 7
The “Active Duty” Requirement
In many cases, members of the Guard and the Reserves may not have fulfilled the “active duty”
requirement. Members of the Guard and Reserves who served on regular active duty are eligible
for the same VA benefits as other veterans.8 An example of this situation would be a Guard
member who was called up to serve in the Persian Gulf for 12 months, and would thus be
considered to have served on active duty for that period of time. Otherwise, Guard and Reserve
duty is not considered “active duty” for benefits unless the service member performing this duty
was disabled or died from a disease or injury incurred or aggravated in the line of duty.9
The “Length of Service” Requirement
Guard and Reserve members must ordinarily serve a minimum of 24 continuous months on active
duty to meet the “length of service” requirement in order to qualify for VA benefits. A former
5 28 U.S.C. § 101(2); 38 C.F.R. § 3.1(d). For a thorough explanation of the statutory criteria for eligibility, see CRS
Report RL33113, Veterans Affairs: Basic Eligibility for Disability Benefit Programs, by Douglas Reid Weimer. Title 5
of the U.S. Code provides the criteria for assistance and preferences in securing federal employment for veterans (5
U.S.C. § 2108). It should be observed that different criteria are used in these statutes (and for different purposes), and
the determination of “veteran” status in Title 5 for employment preference does not determine “veteran” status for VA
benefits under Title 38, and vice-versa. See CRS Report RS22666, Veterans Benefits: Federal Employment Assistance,
by Christine Scott. In addition, state and local entities may have various (and differing) definitions and concepts of the
term “veteran,” which may be utilized for employment preferences and other purposes.
6 For more information, see CRS Report RL33113, Veterans Affairs: Basic Eligibility for Disability Benefit Programs,
by Douglas Reid Weimer, pp. 2-7. Because each retiree’s military service, records, and categorization may be different,
the retiree may not fit within the statutory categorization of “veteran.”
7 However, they may be eligible for certain DOD-provided benefits, such as commissary privileges.
8 38 U.S.C. § 101(21)(A); 38 C.F.R. § 3.6(b)(1).
9 38 U.S.C. § 101(21)(A); 38 C.F.R. § 3.6(a). Inactive duty would include duty other than full-time duty, such as
weekend assignments or part-time details.
Congressional Research Service
2
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
Guard or Reserve member who has served for less than 24 months of continuous active duty may
still qualify so long as the service member has served the “full period” for which he or she was
“called to duty.” This requirement was fulfilled, for example, by Guard and Reserve members
who were called to active duty during the 1991 Persian Gulf War. These service members
satisfied the minimum length of service requirement, even though most did not serve for a full 24
months. But their orders reflected that they served the full period for which they were called to
active duty.10
VA Determination on a Case-by-Case Basis
Although many Guard and Reserve members may not appear to be eligible “veterans” for the
purposes of VA benefits, certain exceptions and special circumstances may exist, which add to the
complexity of the eligibility determination. As each service member’s military service may be
different, and therefore may fit within certain case categories or exceptions, eligibility may
usually be determined by the VA, on a case-by-case basis, after reviewing the individual service
member’s military service records.
DOD Retiree Health Benefits
As with the VA’s system, the DOD’s military health system includes a health benefits program,
generally referred to as “Tricare.” Tricare serves active duty service members; National Guard
and Reserve members; retirees; and their families, survivors, and certain former spouses,
worldwide. As a major component of the Military Health System, Tricare brings together the
health care resources of the uniformed services and supplements them with networks of civilian
health care professionals, institutions, pharmacies, and suppliers to provide access to health care
services while maintaining the capacity to support military operations.11
GARs are usually not eligible for Tricare health benefits until they become eligible for retired pay
at age 60 (at which time, they are no longer considered GARs). However, these individuals and
eligible family members may purchase the TRICARE Retiree Dental Program (TRDP) before
drawing retirement pay. Individuals who enroll in TRDP within 120 days of their official
retirement date are not subject to a 12-month waiting period, which is otherwise required for
certain TRDP benefits.
Members of the retired reserve who are receiving retired pay, but are not yet eligible for Medicare
(generally those retirees between ages 60 and 64), are automatically eligible for TRICARE
Standard or TRICARE Extra. They may also enroll in TRICARE Prime if they live in an area
where it is offered.
Upon attaining age 65, reservists receiving retired pay must enroll in Medicare Part B in order to
retain Tricare coverage. TRICARE for Life (TFL) is for all Tricare beneficiaries who are entitled
10 This was confirmed by VA Gen. Coun. Memorandum (Mar. 14, 1991)(Activation of Reservists of Operation Desert
Shield/Storm).
11 A person who is properly registered in the Defense Enrollment Eligibility Reporting System (DEERS) is
automatically covered by TRICARE Standard. Eligible beneficiaries do not need to enroll for Standard coverage, nor
take any other action; individuals who are otherwise eligible for Tricare health care coverage are automatically covered
under TRICARE Standard. For additional information about the military health system, see CRS Report RL33537,
Military Medical Care: Questions and Answers, by Don J. Jansen.
Congressional Research Service
3
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
to Medicare Part A and who have Medicare Part B coverage based on age. There are no
enrollment fees for TFL, and the catastrophic cap is $3,000 per fiscal year per family. TRDP also
remains available.
Gray Area Retirees (“GARs”)
Eligibility for VA benefits may vary significantly for certain members of the Guard and the
Reserves, as compared to members of the regular military, particularly at the time that a member
of the Guard or Reserves retires.
The National Guard and the Reserves—Background and Purpose
The Guard had its antecedents in the colonial militias, with the concept of the “citizen-soldier,”
who was called to service during times of need. Today the Guard serves a two-fold function—it
provides security and assistance on the home front and is also available for military missions
abroad. For example, the Guard was deployed in the wake of Hurricane Katrina in 2005, and
many members of the Guard have served or are serving in Iraq and Afghanistan.12
The Reserves of the United States Armed Forces are military organizations—such as the Army
Reserve or the Navy Reserve—whose members usually perform a minimum number of military
duty days per year and whose members may be “called up” for duty as required. The Reserves
augment the active duty (full-time) military when their services are needed. These entities are
known collectively as “the Reserves,” the “Reserve Units,” or the “Reserve Components.”13
Career Pattern
Ordinarily, a member of the Guard or the Reserves may retire after 20 years of service with
his/her unit. Certain federal benefits for the retired member (which include health care and
retirement pay) currently do not commence until the retiree reaches age 60. Depending upon the
retiree’s age and length of service, the retiree could be as young as age 37, but will not receive the
federal retirement benefits until reaching age 60. This time period from retirement to age 60 is
generally referred to as the “Gray Area,” and this category of retirees is generally referred to as
“Gray Area Retirees.” This term is not defined by statute or regulations, but generally refers to
members of the Guard or Reserves who have transferred to the Retired Reserve after 20 years (or
more) of service with their unit, but who have not reached age 60.
Most members of the Guard or the Reserves who elect to remain in service will have served
between 20 and 30 years. Upon retirement, the service member will transfer from the Active
Reserve service to the Retired Reserve. The service member is still subject to “call up” to active
duty. At age 60, the GAR is then usually entitled to DOD benefits similar to those of service
members who retire from active military service after at least 20 years. However, in many cases,
12 The Guard’s website provides background and organizational information: http://www.ng.mil/default.aspx.
13 The website of the Office of the Assistant Secretary of Defense for Reserve Affairs contains organization and related
information: http://www.defenselink.mil/ra/. Certain parts of the National Guard of the United States—the Army
National Guard of the United States and the Air National Guard of the United States—are considered part of the
Reserves.
Congressional Research Service
4
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
the GARs are not considered to be veterans under Title 38 for VA benefit purposes. A GAR
carries a Military ID card marked “Ret,” maintains military base privileges, and usually keeps the
commissary privileges that he/she had while on active reserve status. GARs are eligible for 1) VA
disability compensation and VA health care for disabilities or injuries occurring while performing
inactive duty for training, regardless of length of service; 2) VA home loan eligibility, as long as
the retiree had six or more years of honorable service in the Selected Reserve; 3) VA burial and
memorial benefits if the retiree is entitled to reserve retired pay at the time of his/her death; and 4)
conversion of Servicemen’s Group Life Insurance (SGLI) to Veterans Group Life Insurance
(VGLI). Basically, before age 60, the retired reservist has the same benefits that he/she had before
retirement, but without receiving pay.14 However, as discussed above, there generally are no
medical health benefits until the retiree reaches age 60, at which time retirement pay and medical
benefits begin. But, if the GAR is called back to active service, the GAR will regain eligibility for
pay, medical benefits, and other service benefits during this period of active service. Generally
speaking, a retired reservist at age 60 will receive DOD benefits and privileges comparable to
those of a “regular” military retiree, including retirement pay and medical benefits.
Spousal Survivor Benefits
GARs’ surviving spouses are eligible for their annuities.15 P.L. 106-65, § 656, (October 5, 1999),
provides the authority for granting an annuity to certain surviving spouses of service members
who did not decline participation in the Survivor Benefit Plan. This legislation provides coverage
to surviving spouses of all GARs.
Congressional Interest and Proposed Legislation
Congressional interest has focused on the benefit status of GARs, and legislation has been
introduced to extend health care to these retired service members and certain family members.
Participants would be required to pay a premium for such coverage in all of the bills except H.R.
972.
H.R. 27016—TRICARE Continuity of Coverage for National Guard and Reserve Families Act of
2009. The bill would make a member of the Retired Reserve who is qualified for non-regular
(reserve) retirement at age 60, but who is not yet 60, eligible for health benefits under TRICARE
Standard (a DOD managed health care program).17 Eligibility would terminate when the member
becomes eligible for “regular” TRICARE Standard at age 60. Benefits would be available for
certain family members. Participants would be required to pay a premium for such coverage.
14 For a complete comparison between the benefits offered to a GAR and to a retiree age 60 or over receiving retired
pay, see http://www.ng.mil/news/archives/2009/03/Benefits.pdf.
15 This situation occurs when a GAR dies before receiving retirement pay. However, his/her surviving spouse is eligible
for this annuity/retirement benefit.
16 Introduced on January 7, 2009, and referred to the House Committee on Armed Services on that date. On January 30,
2009, the bill was referred to the House Subcommittee on Military Personnel.
17 For an overview of TRICARE Standard, see http://www.military.com/benefits/tricare/tricare-standard/tricare-
standard-overview.
Congressional Research Service
5
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
H.R. 97218—The bill would eliminate the requirement that certain former members of the Reserve
Components of the Armed Forces be at least 60 years of age in order to be eligible to receive
health care benefits.
H.R. 264719—National Defense Authorization Act for Fiscal Year 2010. Section 704 of the bill
would extend TRICARE Standard coverage20 for certain members of the retired reserve who are
qualified for non-regular retirement but are not yet age 60. Eligible members would be required to
pay premiums. Beneficiaries would be required to pay premiums equal to the cost of coverage as
determined by the Secretary of Defense on an appropriate actuarial basis.21
S. 73122—This is the companion bill to H.R. 270. If enacted, it would make a member of the
Retired Reserve who is qualified for non-regular reserve retirement at age 60, but who is not yet
60, eligible for health care benefits under TRICARE Standard (a DOD managed health care
program).23 Eligibility would terminate when the retirees became eligible for “regular” TRICARE
Standard at age 60. Immediate family members would be included under such coverage.
Participants would be required to pay a premium for such coverage.
S. 139024—National Defense Authorization Act for Fiscal Year 2010. Section 701 of the bill
contains provisions similar to those of section 704 of H.R. 2647, discussed above.25
Conclusion
With public and congressional interest focused on veterans’ issues and benefits, consideration is
being given to the benefits extended (and not extended) to members of the Guard and the
Reserve. Particular interest has focused on the status of GARs and the situation that they
encounter—especially in regard to health care benefits—if they retire before age 60. In response
to these concerns, legislation has been introduced in the 111th Congress.
18 Introduced on February 20, 2009, and referred to the Housed Committee on Armed Services on that date. On March
13, 2009, the bill was referred to the House Subcommittee on Military Personnel.
19 Introduced on June 2, 2009, and passed in the House on June 25, 2009. Passed in the Senate with an amendment by
unanimous consent on July 23, 2009. On July 23, 2009, the Senate insisted on its amendment and requested a
conference and appointed conferees.
20 See footnote 17.
21 See CRS Report R40711, FY2010 National Defense Authorization Act: Selected Military Personnel Policy Issues,
coordinated by Don J. Jansen, p. 8.
22 Introduced on March 26, 2009, and referred to the Senate Committee on Armed Services on that date.
23 Id.
24 Introduced on July 2, 2009, and passed by the Senate with the amendment on July 23, 2009. On July 28, 2009, the
bill was held at the desk.
25 See footnote 21.
Congressional Research Service
6
Veterans Affairs: “Gray Area Retirees”—Issues and Related Legislation
Author Contact Information
Douglas Reid Weimer
Legislative Attorney
dweimer@crs.loc.gov, 7-7574
Congressional Research Service
7