What Happens to Your Pay, Benefits, and Healthcare After You Separate

One of the most stressful parts of separating is not the paperwork. It is the uncertainty about what stops immediately, what continues, and what has a gap you need to plan around.

This guide is intentionally practical. It is not tax advice, legal advice, or branch-specific policy interpretation. Timing and eligibility can vary by service and situation, so always confirm details through your finance office and official benefit resources.

If you want the big picture structure first, start with the transition timeline and the complete separation checklist. If you are planning the last stretch, the final 180 days guide helps you stop making calendars that cannot exist.

1) Your Final Pay: What to Expect (and Why It Can Be Delayed)

Final pay is not always “automatic and instant.” The Defense Finance and Accounting Service (DFAS) explains that your final pay depends on factors like service processes and separation timing, and that debts can delay final pay significantly.

DFAS specifically notes that if your pay account is flagged with a debt, you could wait 120 days or more for final pay while your account is audited. Even small debts can cause delays.

• DFAS: Final Pay
• DFAS: Military Separations (overview)
• DFAS: How to Avoid Separation Debt

How to reduce surprises

• Attend your local separation or finance briefing if available.
• Ask finance what the most common “tiny debts” are at your base (travel overpayments, tuition, gear loss, etc.).
• Update contact info and direct deposit details before you separate.
• Keep copies of your separation paperwork and any finance correspondence.

Real Example: Delayed Final Pay

An E-6 separated in June with a clean record and no known debts. Final pay did not arrive in July. Called DFAS in August and discovered a $47 travel voucher overpayment from 18 months prior that triggered an audit. Final pay arrived in October—4 months after separation.

Lesson: Even tiny debts can delay everything. The amount does not matter. The flag on your account does.

What Counts as a "Debt" That Can Delay Your Pay

These are the most common culprits people do not see coming:

• Travel overpayments: Per diem miscalculations, mileage reimbursement errors from old TDY orders
• Tuition assistance: Dropped a class and forgot to repay TA from 2 years ago
• CIF/gear: Lost or damaged equipment charges
• PCS overpayments: Weight allowance errors from your last move
• Advance pay: Emergency advance that was never fully recouped
• BAS/BAH recoupment: Benefits paid during a period you were not entitled

The problem? You might not even know these exist until final pay is delayed.

How to Check for Debts Before Separation

1. Review your LES (Leave and Earnings Statement) for any remarks about debts or collections
2. Visit your finance office 90-120 days before separation and ask: "Are there any flags or debts on my account?"
3. Check your myPay account for any outstanding balances or notices
4. If you have old travel vouchers, verify they were settled correctly
5. If you used tuition assistance, confirm all obligations were met

If you find a debt, pay it before separation. Even $20 is worth clearing to avoid a 4-month delay on thousands of dollars.

2) Leave: Terminal Leave vs Selling Leave Back

This is where people get tripped up, because leave can affect both your timeline and your money.

You have two main options for unused leave:

Option 1: Terminal Leave (Most Common)

How it works: You use your accrued leave days at the end of your service. You stop showing up to work, but you remain on active duty until your separation date. You continue receiving full pay and allowances, keep TRICARE coverage, and accrue retirement points (if applicable) until your official separation date.

Why people choose this:

• Extends TRICARE coverage (critical if new employer coverage has a waiting period)
• Provides paid time for job search, relocation, and family transition
• Keeps you in "military status" for final administrative tasks
• Gives you a buffer between military work and civilian employment

Option 2: Selling Leave Back (Less Common)

How it works: You separate without using all your leave and receive a lump-sum payment for up to 60 days of unused leave (lifetime limit). Payment is at your base pay rate, not including allowances like BAH or BAS.

Why this is usually less attractive:

• TRICARE ends on your separation date (potentially weeks or months earlier than if you took terminal leave)
• You lose the buffer time for job search and relocation
• The lump sum is taxed as income—you don't get "extra" money, you get paid for days you didn't use
• You give up the strategic flexibility that terminal leave provides

The Math Example Most People Need

E-6 with 60 days of leave at separation date: June 30, 2026

Option A: Take 60 days terminal leave

• Terminal leave starts: May 1, 2026
• Separation date: June 30, 2026
• TRICARE coverage through: June 30, 2026 (then TAMP if eligible)
• Pay continues through: June 30, 2026 (including BAH, BAS, all allowances)
• Job search time: 60 days while still receiving full pay and benefits

Option B: Sell back 60 days of leave

• Last day of work: April 30, 2026
• Separation date: April 30, 2026
• TRICARE coverage ends: April 30, 2026
• Lump-sum payment: Base pay only for 60 days (no BAH/BAS), taxed as regular income
• Healthcare gap: May 1 until new coverage starts (could be 30-90 days)

Result: Option A provides 2 extra months of TRICARE coverage and paid time. Option B creates an immediate healthcare gap and provides less total compensation (base pay only vs. full pay + allowances).

When Selling Leave Back Makes Sense

There are a few scenarios where selling leave might work:

• You have a civilian job starting immediately with day-one healthcare coverage
• You are covered under a spouse's insurance plan
• You need the lump sum for a specific financial obligation
• You are retiring (not separating) and will have immediate TRICARE retiree coverage

For most separating service members, terminal leave is the better choice.

If you want a deeper "calendar reality" explanation of how terminal leave competes with SkillBridge and PTDY inside the same final window, see this guide.

3) Healthcare: What Happens to TRICARE When You Separate

This part matters because healthcare is where the “gap” risk is highest.

TRICARE’s official FAQ states that for people ETSing, TRICARE coverage ends at 11:59 p.m. on the date of separation, unless you have transitional coverage eligibility (such as TAMP) or you enroll in another qualifying option. It also notes that you may qualify to purchase CHCBP coverage.

• TRICARE FAQ: I’m ETSing, what happens to my TRICARE benefits?
• TRICARE: Separating from Active Duty
• TRICARE: Transitional Health Care Benefits (TAMP, CHCBP)

TAMP (Transitional Assistance Management Program)

TRICARE explains that if you qualify, TAMP provides 180 days of transitional coverage beginning when you separate. Not everyone qualifies, so you should confirm eligibility early.

CHCBP (Continued Health Care Benefit Program)

If you are not eligible for TAMP, or after TAMP ends, TRICARE indicates you may be able to buy CHCBP coverage. This is commonly used as a bridge plan while you transition to employer coverage or another option.

What TAMP Eligibility Actually Looks Like

TAMP is not automatic for everyone who separates. Here are the common qualifying scenarios:

• Involuntary separation: RIF (reduction in force), non-selection for promotion with mandatory separation, medical separation
• Deployment-related: Separated within 180 days of returning from a deployment of 90+ days in support of a contingency operation
• Reserves mobilized: Reserve/Guard members deactivating from a Title 10 activation of 30+ days

Who typically does NOT qualify for TAMP:

• Voluntary separations at end of contract (ETS)
• Voluntary retirements
• Separations for cause

If you do not qualify for TAMP, you have two options: CHCBP or civilian coverage.

CHCBP: The Expensive Bridge Plan

CHCBP (Continued Health Care Benefit Program) is a temporary health insurance you can purchase after TRICARE ends. It is similar to COBRA for civilian employment.

Key details:

• Coverage duration: 18-36 months depending on eligibility
• Cost: You pay 100% of premiums (no government subsidy). Rates vary by plan and coverage level.
• Enrollment deadline: Within 60 days of losing TRICARE eligibility
• Coverage: Similar benefits to TRICARE, but you are paying the full cost

When CHCBP makes sense:

• You have a gap between TRICARE ending and new employer coverage starting
• Your new employer has a 60-90 day waiting period for benefits
• You have ongoing medical care that cannot be interrupted
• You are self-employed or starting a business

When CHCBP might not be worth it:

• You have immediate coverage through a spouse's plan
• Your new employer provides day-one coverage
• You qualify for VA health care and are comfortable with that as your primary coverage
• You can get an ACA marketplace plan for less money

Real Example: Healthcare Gap Scenario

An E-5 separated June 30 without TAMP eligibility. New civilian job started July 15 with a 60-day benefits waiting period (coverage starts September 15). Healthcare gap: June 30 - September 15 (76 days).

Options considered:

1. CHCBP for 2.5 months: ~$600-800/month for family coverage = $1,500-2,000 total
2. ACA marketplace short-term plan: ~$400-500/month = $1,000-1,250 total
3. Pay cash for urgent care if needed, risk the gap: $0 upfront, unlimited downside

Decision: Enrolled in CHCBP because spouse was pregnant (high-risk to go uninsured). Cost was painful but necessary.

4) VA Health Care: When You Can Apply and What to Expect

VA health care is separate from TRICARE. If you want VA health care, you should apply and enroll.

The VA states that active-duty service members can apply for VA health care as soon as they have received separation or retirement papers, and if eligible, enrollment occurs once you have separated or retired.

• VA: Active-Duty Service Members and VA Health Care
• VA: How to Apply for VA Health Care
• VA Form 10-10EZ (Apply Online)

If you are also filing VA disability claims, see the VA Disability Preparation Checklist and the separation physical prep guide. Those two posts exist because documentation and timing matter.

VA Health Care vs. Private Insurance: What You Need to Know

A lot of people assume VA health care replaces the need for private insurance. Sometimes yes, sometimes no.

When VA health care might be enough:

• You live near a VA medical center
• You have a high VA disability rating (higher priority groups get faster access)
• You do not have complex, time-sensitive medical needs
• You are comfortable with the VA system for primary care

When you probably still need private insurance:

• You live far from VA facilities
• You have family members who need coverage (VA does not cover dependents)
• You need specialist care that VA waitlists cannot accommodate
• You want the flexibility to see any provider

Many veterans use both: VA for service-connected conditions and preventive care, private insurance for everything else and family coverage.

5) The 90-Day Window That Can Save You (QLE)

TRICARE notes that separation is a Qualifying Life Event (QLE), and that you typically have 90 days from your separation date (or TAMP end date) to make enrollment changes to your TRICARE plan. This matters because many transitions are time-window driven.

• TRICARE: Separating from Active Duty (QLE information)

6) A Simple “Gap-Proof” Checklist

If you do not want to overthink this, do these six things:

1. Confirm your final out date and build backward from it.
2. Talk to finance early and ask what debts commonly delay final pay.
3. Confirm TRICARE end date and whether you qualify for TAMP.
4. Pick a healthcare bridge plan if there is any chance of a gap (employer plan timing, CHCBP eligibility, etc.).
5. Apply for VA health care as soon as you have separation or retirement papers (if you want VA care).
6. Keep copies of everything (DD214, medical records access info, finance confirmations, enrollment confirmations).

7) Common Mistakes That Create Problems

Mistake 1: Assuming TAMP Is Automatic

Why it's bad: You plan your healthcare transition around 180 days of TAMP coverage, then discover on separation day that you do not qualify. Now you have no coverage and 24 hours to figure it out.

What to do instead: Confirm TAMP eligibility with your personnel office 90 days before separation. If you do not qualify, start researching CHCBP or marketplace plans immediately.

Mistake 2: Not Budgeting for Healthcare Costs

Why it's bad: You have been paying $0 for TRICARE Prime for years. Civilian healthcare premiums, deductibles, and copays can be $500-1,500+ per month for family coverage. This is a budget shock if you are not ready.

What to do instead: Research your new employer's health plan costs during the job search. Factor healthcare costs into your civilian salary negotiations and post-military budget.

Mistake 3: Delaying VA Health Care Enrollment

Why it's bad: VA enrollment processing takes time. If you wait until after you need care, you might have a gap. Plus, some VA benefits and priority groups are time-sensitive based on when you separated.

What to do instead: Apply for VA health care as soon as you have your separation papers. Even if you do not plan to use it immediately, having enrollment complete gives you options.

Mistake 4: Not Understanding the 60-Day Leave Sell-Back Limit

Why it's bad: You can only sell back 60 days of leave over your entire military career. If you already sold back leave during a previous reenlistment, you might have less eligibility than you think.

What to do instead: Check your LES history or ask finance how much sell-back eligibility you have left. Plan your terminal leave accordingly.

Mistake 5: Forgetting About Dental

Why it's bad: Dental coverage ends with TRICARE. If you have ongoing dental work or family members with braces, you need a plan.

What to do instead: Schedule any major dental work before separation. Research dental coverage options (employer plans, private dental insurance, or VA dental if you qualify).

8) Timeline Examples: What This Looks Like in Practice

Scenario 1: Standard Voluntary Separation (No TAMP)

Separation date: July 31, 2026
Terminal leave: 45 days (starts June 16)
New job: Starts August 15, benefits active October 1

What happens:

• June 15: Last day at unit
• June 16 - July 31: Terminal leave (on active duty, full pay, TRICARE active)
• July 31, 11:59 PM: TRICARE ends
• August 1 - September 30: Healthcare gap (60 days)
• October 1: Employer coverage starts

Solution: Enrolled in 2-month CHCBP to bridge gap. Total cost: ~$1,200 for family.

Scenario 2: Involuntary Separation with TAMP

Separation date: May 31, 2026 (RIF/force reduction)
Terminal leave: 30 days (starts May 1)
TAMP eligible: Yes (180 days)
New job: Starts July 1, benefits active September 1

What happens:

• April 30: Last day at unit
• May 1-31: Terminal leave (on active duty, full pay, TRICARE active)
• May 31, 11:59 PM: Separation occurs
• June 1 - November 27: TAMP coverage (180 days)
• September 1: Employer coverage starts (while still on TAMP)
• September 1: Switches to employer plan, TAMP no longer needed

Result: No healthcare gap, smooth transition.

Scenario 3: Retirement (Different Rules)

Retirement date: October 1, 2026
Terminal leave: 60 days (starts August 1)
Retiree status: Immediate TRICARE retired coverage

What happens:

• July 31: Last day at unit
• August 1 - September 30: Terminal leave (on active duty)
• October 1: Retirement begins, TRICARE retiree coverage starts immediately

Result: No gap. Retirees transition directly to TRICARE retiree plans.

Frequently Asked Questions

When does TRICARE coverage end after military separation?

TRICARE coverage ends at 11:59 p.m. on your separation date, unless you qualify for TAMP (180 days transitional coverage) or enroll in CHCBP. If you take terminal leave, your separation date is the end of your leave period, not your last day at work. Confirm your exact separation date and TAMP eligibility early to avoid surprises.

How long does it take to receive final military pay after separation?

If your account is clean with no debts, final pay typically arrives 2-4 weeks after separation. However, if DFAS finds any debts (even small ones like old travel voucher errors or tuition assistance overpayments), your account goes into audit status and final pay can be delayed 120+ days. Check for debts 90 days before separation to avoid this.

What is TAMP and who qualifies?

TAMP (Transitional Assistance Management Program) provides 180 days of free TRICARE coverage after separation. You typically qualify if: (1) involuntarily separated, (2) separated within 180 days of a 90+ day deployment, or (3) Reserve/Guard deactivated after 30+ days Title 10 orders. Voluntary ETS and retirements usually do not qualify. Confirm with your personnel office.

Should I sell back leave or take terminal leave?

Terminal leave is usually better because: (1) you keep TRICARE coverage longer, (2) you receive full pay plus allowances (BAH/BAS), not just base pay, (3) you get paid time for job search and relocation. Selling leave back makes sense mainly if you have immediate civilian healthcare coverage and need the lump sum for a specific reason.

When can I apply for VA health care?

Apply as soon as you receive your separation or retirement papers (DD Form 214 or equivalent). You can apply before your separation date, but enrollment becomes active after you officially separate. Processing takes several weeks, so apply early. Use VA Form 10-10EZ online at va.gov.

Can I use both VA health care and private insurance?

Yes. Many veterans use VA care for service-connected conditions and preventive care, and private insurance for everything else, specialist access, and family coverage (VA does not cover dependents). Using both is common and often makes sense depending on your situation and location.

What is the 60-day leave sell-back limit?

You can only sell back a maximum of 60 days of leave over your entire military career. If you already sold back leave during a previous reenlistment, that counts toward your lifetime limit. Check with finance to see how much eligibility you have remaining before planning to sell leave at separation.

What happens to my dental coverage after separation?

Dental coverage through TRICARE ends on your separation date (same as medical). There is no TAMP equivalent for dental. If you have ongoing dental work, complete it before separation or research civilian dental insurance options. Some veterans qualify for VA dental benefits based on service-connected conditions or disability ratings.

Final Thoughts

The separation process has a weird habit of making smart people feel dumb. That is usually not your fault. The information is scattered, the timing matters, and everyone you ask has a different situation.

If you do two things, do these: confirm what ends on your separation date, and plan a healthcare bridge if you are not 100 percent sure you have continuous coverage.

About the author: Bruce Goren is an Air Force member retiring in February 2026. As part of his transition, he participated in the SkillBridge program through AllegiantVets and later completed on-the-job training through Service2Software.