Heath Insurance What Happens When I Retire?

Health insurance considerations weigh heavily on the
minds of people wanting to retire before Medicare
coverage kicks in at age 65. Many people put off
retirement simply because the cost of an individual
health insurance policy is too great on a limited
income.

What options for health insurance do you have if you
choose to retire before age 65? Although they are not
required to, you may be able to get COBRA-like
coverage from your employer.

As an added retirement benefit, your employer may
allow you to pick up the premium on your policy;
although paying 100% of your premium may initially
appear to be an expensive option, purchasing an
individual policy apart from a group may be even more
costly and not provide you with the level of coverage
you previously had.

Some companies are offering basic high-deductible
insurance reasonably in the hopes that they will be
able to enroll you in Medicare Part C (supplemental
insurance) when you retire.

Another option is to budget and save money to cover
your anticipated medical costs for the time period
between retirement and age 65. If you are in very good
health, this may be a viable alternative for you.

Pre-planning for retirement is an important issue; the
earlier you start planning, the better. Realizing the
Medicare does not pay all of your medical expenses,
you should budget money for medical expenses even
after retirement.

What if I leave my job?

The Consolidated Omnibus Budget Reconciliation Act
(COBRA), a law created in 1986, gives workers (and
members of their family) who lose their health
insurance benefits the right continue their group
health insurance for a limited period of time under
circumstances such as voluntary or involuntary job
loss, reduction in hours, transition between jobs,
divorce, adoption and death.

Generally, the employee pays up to 102% of the premium
cost for the same policy; this is still usually less
expensive than buying an individual insurance policy.

There are three basic aspects for qualifying for
COBRA: the qualifying event, the insurance plan
coverage and the qualified person.

Each aspect is taken into consideration when applying
for COBRA and you must elect to either apply for COBRA
or waive your rights to COBRA within 14 days after a
qualifying event.

You must also have been in the group insurance plan
during your employment to be eligible. Although there
are exceptions, generally you may continue to pay your
own premiums to keep COBRA coverage intact for up to
18 months.

Companies who have fewer than 20 employees, State or
Federal employers or employee organizations may not
offer COBRA coverage.

Check with your health insurance administrator to see
if you may qualify. You may also have this information
readily available in your group health insurance
policy or in your company handbook.

Although it may be expensive, the cost of being able
to keep your group insurance coverage rate may be well
worth it.

 

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