The U.S. Department of Defense has proposed new regulations for coordination of private employee benefits with Tricare.

Tricare is a federal program that provides health coverage for military personnel, dependents and retirees who get care away from military facilities.

The proposed regulation would permit employers to use Section 125 cafeteria plans to make cash payments to employees in lieu of providing health coverage, as long as the same payments were available to all employees and not simply those eligible for Tricare, officials write in a preamble to the proposed regulations, which appear today in the Federal Register.

Federal law does not permit employer-sponsored group health plans to give employees who are eligible both for private coverage and for Tricare incentives to choose Tricare.

The Section 125 cash payments are permissible only if “the plan treats all employees the same and does not illegally take Tricare eligibility into account,” officials write.