Have questions about retiree insurance? We’re here to answer some of those commonly asked questions to help you make an informed decision about your health care coverage when you retire.

What is Retiree Insurance?

Retiree insurance is a form of healthcare coverage that some employers, unions, and trusts may provide to retiring employees. Usually, it is a group health insurance similar to plans offered to active employees. It’s important to note that eligibility, enrollment, coverage, and other rules are specific to each employer’s retiree plan.

Can Your Health Coverage Continue after You Retire?

If you had health coverage while you were working for your employer, you may assume you have an option to continue your health coverage from your employer after you retire. However, that’s not always the case.

Employers aren’t required to provide retiree insurance. In fact, it’s becoming less common for this to be an option. If it is an option for you, you should know that your former employer or union controls the coverage. Meaning they can change benefits and premiums or even cancel coverage at any time.

What Happens to Retiree Coverage When You’re Eligible for Medicare?

You might be wondering how Medicare comes into play in regards to your retiree coverage. For most people with retiree insurance, it makes sense to sign up for Medicare when you’re first eligible to do so. Retiree health plans are typically designed to supplement Medicare, and might not pay for medical costs during any period you were eligible for Medicare but did not sign up. Generally, you’ll need to enroll in Original Medicare, or Part A and Part B.

If you’ve been collecting Social Security or Railroad Retirement Board benefits since turning 65, you will automatically be enrolled in Part A and Part B. You’ll also be automatically enrolled if you’re eligible for Medicare because of a disability or medical condition.

However, when you become eligible for Medicare and have not received Social Security benefits, you must enroll in Part A and B yourself. You can enroll during your Initial Enrollment Period (IEP), which is the seven-month period that begins three months before you turn 65, includes the month you turn 65, and ends three months later.

How Does Retiree Coverage work with Medicare?

As we mentioned before, retiree insurance is typically designed to be a supplement to Medicare. Because of this, retiree coverage is almost always secondary to Medicare. This means it pays after Medicare and may provide coverage for Medicare cost-sharing, like coinsurance, copayments, and deductibles. How your specific retiree insurance coordinates with Medicare can differ as it depends on the type of plan you have. For more information, speak to your former employer.

Should I Keep my Retiree Insurance?

Deciding whether to keep your retiree insurance after you enroll in Medicare can be a tough choice. There are pros and cons to keeping and dropping it. But it’s important to remember it’s a personal one that depends on your costs and anticipated health care needs. To fully understand your options and what benefits you get from your retiree coverage, get a copy of your plan’s benefit booklet and look at the summary plan description provided by your former employer or union. You can also call your former employer to learn more.

If you choose to drop your retiree insurance, keep in mind you may not be able to get the coverage back if you want it at a later date. If you have dependents on this plan, you may want to check with your former employer about how this decision may impact your dependents.

Need more Help? Talk to an Agent.

Being left with the decision of what to do for your retirement health care needs can be confusing and overwhelming. But talking to an experienced insurance agent can help you navigate your retirement health insurance options. The agent can analyze your options by asking you questions about your health care needs. Then they’ll tell you which plans will provide the most cost-effective benefits based on your personal medical situation.

At Jeffery Insurance, we will help guide you through good decision-making and health plan options that will benefit you through your retirement years. We are based in Scottsdale but are happy to assist you no matter where you are in Arizona. We are Arizona’s health care resource!