With the volume of retirees from the Boomer generation and loads of people still turning 65, there are still many that have the option of a retiree medical benefit through their previous employer. Along with this type of offering comes a lot of questions about choices and cost comparisons. Myth-Buster Alert!! Your retiree plan is not always the best and lowest cost option! Another important piece to know is that most plans still require enrollment in Medicare Part A and B through Social Security. So, you will still be paying a monthly premium for Medicare Part B. The retiree plan usually functions just like a Medigap (supplement) or Advantage Plan. Read on to see if this applies to you or a loved one needing guidance on the most cost-effective way to handle your health coverage in retirement.
Private Company Retiree Options
These still exist, and I see it with the likes of Eli Lilly, Anthem, IU Health, Purdue University, Union Trades, Retired Teachers and others in Indiana. I am sure there are more, but these examples come to mind. A common myth is that your employer retiree plan is going to have the best benefits at the lowest cost. This is not always true. There is a lot to consider and information to gather to make an educated decision. You will want to first obtain their enrollment guidebook or at least the web portal access to research the plans. Also, many of these companies use a third-party administrator to handle the retiree benefit options and enrollment. The most common I see is a company called Via Benefits. Unfortunately, the people you can call and speak with are not the most knowledgeable of how these would compare to regular Medicare Plan options. This is when an Independent Broker comes in handy to help you compare!
Federal Retiree Programs
I have assisted many federal retirees in figuring out the best combination of coverage once they are Medicare eligible. This excludes VA benefits as that is an entirely different discussion. [See previous blog article: https://www.cdi-cares.com/blog/i-am-a-veteran-with-va-benefits-do-i-even-need-medicare] The federal retirees I have had experience with are folks retired from state and federal government offices, post offices, office administration at military bases who are not service members, etc. In this very special case, you are not required to enroll in Medicare Part B. However, a major note of caution! Federal retiree benefits are not considered creditable coverage for Part B. Therefore, if you choose to add Medicare later, you could incur penalties for not enrolling when first eligible. I have had people come to me paying very high premiums for their federal retiree coverage and wanting Medicare options, however, are stuck because they never enrolled in Part B. The penalties are too high by the time they realize it. Conversely, the federal retiree drug coverage IS considered creditable. So, you do not have to have a Medicare Part D plan. There are many options to combine your federal retiree plan with additional Medicare benefits at no cost and help avoid penalties down the road. This may be a whole blog itself, so stay tuned or reach out for more detailed information!
Reimbursement Accounts
Another retiree benefit to research and factor into your decision is whether your company provides a medical reimbursement account. I find that many retirees have access to such an account funded by their employer. In this case, it will be important to know how much money is in the account, what it can be used for and what limitations apply as far as plan options. For example, some employers require you to utilize their retiree plan in order to use the account funds. However, some do not. You will also want to know if the money can be used for medical premiums and/or out of pocket medical expenses. Some can be used for both; however, some are limited to out-of-pocket expenses OR premiums only. Knowing what it can be used for can help make the decision on what type of plan to enroll in to get the most out of those funds.
Navigating the System
Once you are able to make a general decision on what type of plan you want to enroll in, navigating the enrollment platform can be overwhelming. And since the employers typically farm this out to a third-party, the assistance is usually through an 800 number with someone many states away. As a local Independent Insurance Professional, I have been asked often for assistance with everything from a cost and benefit comparison to navigating enrollment on the third party site. And since nerding out on insurance is my thing, I am here for it!
CDI is here to help you manage your healthcare costs and find the best options for your unique situation. We can meet in person or virtually. Reach out if you would like more information. Email carrie@cdi-cares.com or check out www.cdi-cares.com for a contact page and other helpful blogs.
