Almost everyone is familiar with someone who continues to work because of the insurance provided by the employer. Nothing is more discouraging than deciding to quit working and then realizing that it is necessary to maintain work-sponsored health insurance.
The choice to quit work or to continue working because of the insurance benefits provided is a complex and confusing area of the retirement planning process.
jdhfgfgfhjfhfhhffhhf
What are the available options?
(The following options are not to be considered exhaustive and all-inclusive. Due to the scope and detail of the information available, the different options will not be presented in a comprehensive form, but rather as an informative overview.)
hhugggbbjhn
*Self Insure (Going naked)–
Probably the least desirable and the most precarious position is self-insurance.
Self-insurance (No insurance) means that the individual is on the hook for all health care
expenses. (Any major health care problem or accident can potentially result in financial
ruin.)
jku9ujhghjujhhghi
*COBRA (Consolidated Omnibus Budget Reconciliation Act)–
The US Department of Labor website states: The Consolidated Omnibus Budget
Reconciliation Act (COBRA) gives workers and their families who lose their health benefit
the right to choose to continue group health benefits provided by their group health
plan for limited periods under certain circumstances such as voluntary or involuntary job
loss, reduction in the hours worked, the transition between jobs, death, divorce, and other
life events. Qualified individuals may be required to pay the entire premium for coverage
up to 102% of the cost of the plan.
COBRA generally requires that group health plans sponsored by employers with 20 or
more employees in the prior year offer employees and their families the opportunity for a
temporary extension of health coverage (called continuation coverage) in
certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It
also requires employers and plans to provide notice. Plans must provide a Summary of
Benefits and Coverage (SBC) that accurately describes the benefits and coverage under
the applicable plan. The SBC is a uniform template that uses clear, plain language to
summarize key features of the plan, such as covered benefits, cost-sharing provisions and
coverage limitations. Plans and issuers must provide the SBC to participants and
beneficiaries at certain times (including with written application materials, at renewal, upon
special enrollment and request).
COBRA may provide longer periods of coverage beyond the maximum period required by
law. When the qualifying event is the covered employee’s termination of employment or
reduction in hours of employment, qualified beneficiaries are entitled to 18 months of
continuation coverage.
hijiujjhygijo
*ACA (Affordable Care Act)–
Wikipedia defines the ACA as The Affordable Care Act (ACA), formally known as the
Patient Protection and Affordable Care Act, colloquially known as Obamacare, is a
landmark U.S. federal statute enacted by the 111th United States Congress and signed into
law by President Barack Obama on March 23, 2010.
The law has 3 primary goals:
-Make affordable health insurance available to more people. The law provides
consumers with subsidies (“premium tax credits”) that lower costs for households
with incomes between 100% and 400% of the federal poverty level (FPL).
– Expand the Medicaid program to cover all adults with income below 138% of the
FPL. Not all states have expanded their Medicaid programs.
-Support innovative medical care delivery methods designed to lower the costs of
health care generally.
Under the Affordable Care Act, patients who may have been uninsured due to pre-existing
conditions or limited finances can secure affordable health plans through the health
insurance marketplace in their state. The AMA is committed to providing information for
physicians to help their patients get coverage, along with securing changes to improve the
law moving forward.
kdh;kfjjhhfjkag withecuring nges to improve the law moving forwar
*Spouse’s Plan–
A widely used option is to initiate, continue, or expand coverage under a plan available to a
working spouse. In many cases, this is the simplest and most affordable option. It is
dependent on having a spouse who is continuing to work and has work-sponsored health
care coverage.
ponsalth cage.
*HSA (Health Savings Account-
Wikipedia defines an HSA as a health savings account that is a tax-advantaged medical
savings account available to taxpayers in the United States who are enrolled in a high-
deductible health plan. The funds contributed to an account are not subject to federal
income tax at the time of deposit. HSA plans can be provided through an employer,
organization, or on an individual basis.
What are the benefits of an HSA?
A health savings account (HSA) can help you lower your taxes, pay for health care more
easily and even save for retirement. HSAs are only available with high-deductible health
plans. You can use HSA funds to pay for eligible health care expenses and for out-of-
pocket costs your health plan doesn’t cover.
What is the main downside of an HSA?
The main downside of an HSA is that you will have a health insurance plan with a high
deductible. A health insurance deductible is the amount of money you will need to pay
out-of-pocket each year before your insurance plan benefits begin. HSAs are said to be a
“Triple Tax Advantage” account for the fact that contributions, funds used to pay qualified
health care expenses, and growth of funds inside the HSA are all tax sheltered. (In simple
words this means that money that is contributed, money used to pay for qualified
healthcare expenses, and earnings inside the HSA Account are not taxed on
a federal level.) Because of the triple tax advantage feature, HSA plans can potentially be
used as a retirement savings account.
dgjjgjksdjkjdnkdsjkd
*Individual health insurance through Medicare, Medicaid, or CHIP–
Medicaid provides free or low-cost health coverage to some low-income people, families
and children, pregnant women, the elderly, and people with disabilities. Many states have
expanded their Medicaid programs to cover all people below certain income levels.
Medicaid qualifications depend partly on whether your state has expanded its program.
djdjnkdgjjksjnjfjjjksjdjfjjkfgjdf
*The Children’s Health Insurance Program (CHIP)–
CHIP provides health coverage to eligible children, through both Medicaid and separate
CHIP programs. CHIP is administered by states, according to federal requirements. The
program is funded jointly by states and the federal government.
and the federal government.djkgjkgjksjgjkjskjgkjsljgkjjlksjkjgjjkgj
*Medicare–
Wikipedia defines Medicare as a government national health insurance program in the
United States, begun in 1965 under the Social Security Administration and now
administered by the Centers for Medicare and Medicaid Services. Medicare is the federal
health insurance program for:
-People who are 65 or older
-Certain younger people with disabilities
-People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a
transplant, sometimes called ESRD)
bjkjkjbvbjnj
*Some types of less regulated private health insurance
are not considered minimum essential coverage. This includes short-term health plans,
fixed indemnity plans, critical illness plans, accident supplements, and dental/vision plans.
It also includes health plans that aren’t insurance at all, such as Farm and health Bureau
plans in some states, direct primary care plans, care sharing ministry plans.
kjioihghuu
It should now be obvious that this is a very diverse and complex subject. I have tried to provide good, solid overview information. Much of the information provided was taken directly from government-sponsored websites. Additional information can be found on those websites.
It is also important to note that some retirees completely circumvent the problem of continuing to work because of employer-sponsored health coverage by pre-planning for this eventuality. This is accomplished by saving adequate funds ahead of time to pay for necessary healthcare premiums before Medicare initiation. With this strategy, potential retirees are not forced to continue working but can continue to work as an option, not a mandate.
If you’d like to be a part of a free online retirement community, join us on Facebook:
COMMENTS