Are you preparing for retirement? Now might be a good time to ensure your medical coverage is secure. If you’ve held a stable job for most of your career, you may have never had to consider health insurance. Although, it’s important to understand the benefits covered in your existing plan and how they may change upon retirement. Exploring your available options and comparing them with your retiree insurance plan is essential.

What is Retiree Insurance?

Retiree insurance is health insurance provided by organizations to former employees who have retired. It often includes your basic healthcare costs including dental and vision.

Each retiree plan is different, although there will be some additional out-of-pocket costs.

Some employers do not even offer a retiree coverage plan, so it’s worth consulting with your employer to determine benefits, premiums and how continued coverage can work.

Do you Need Medicare with Retiree Coverage?

When you turn 65 and become eligible for Medicare, you must enroll in Parts A and B; otherwise, you will be considered to have no coverage. Also, it is not in your best interest to delay your enrolment in Medicare since you will incur a late penalty. Medicare will become your primary insurance and pay first, while retiree insurance will be secondary and pay some or all of the costs that Medicare did not cover.

It’s important to understand all out-of-pocket costs and how it will impact your current health insurance and your spouses. Also, premiums for both retiree coverage and Medicare will need to be considered.

Should you keep Retiree Insurance?

After you’ve enrolled in Medicare, the next question to ask yourself is “Should I keep my retiree insurance?”. There are benefits of having both. For instance, some services covered by your retiree insurance are not available under Medicare, such as routine vision and dental. Consider the impact of what continued retiree health coverage will have on your wellbeing, and if you can afford to pay the premiums for both going forward.

Some employers may register employees in Medicare Advantage. If this applies to you, then you won’t have any further steps to take since Medicare Advantage contains Parts A and B.  Check your retiree insurance administrator to see if you have creditable drug coverage. If there you’re are not covered, you can enroll in a stand-alone Part D.

If you stop your retiree insurance plan, you may not be allowed to enroll in it again. This is an important consideration, especially if you have dependents covered that are ineligible for Medicare.

Review Your Options Yearly

If you have a retiree insurance plan, you should consistently evaluate each year. Is it worth keeping it going? Is there an alternative option? Benefits and costs can change unexpectedly. Conducting an annual review during the open enrollment period can ensure you keep your options open and secure the best coverage at the lowest price.

Choose the Best Combination

Refusing to enroll in Medicare is not an option. However, you can decide to stop your retiree insurance and keep Medicare alone. If you still have questions about whether you should have both policies, please feel free to contact us.