Insurance When Retiring Early

directory-1334441_1920If you are working towards retiring before the age of 65, you need to consider what you will do for health insurance during your retirement. Medicare eligibility begins at age 65, so you will need to plan accordingly for the years leading up to that. Here are some options:

You Can Possibly Stay on with Your Last Employer

Not every employer offers this option, but you should check with your HR department to see if there is the option to stay on the offered health insurance. There may be not cost-effective and there is usually a time limit for how long you can stay on it.

COBRA may be a good option for you 

The Consolidated Omnibus Budget Reconciliation Act (COBRA) created a program that allows former employees, their spouses, and dependent children to continue receiving health insurance coverage from a former employer, but only applies to employers with 20 or more employees.  Under COBRA, a retired employee can receive the same health insurance coverage for up to 18 months. But you must pay the entire premium - part of which your employer probably previously covered. In some cases, people who opt to use COBRA also have to pay an extra 2% to cover administrative fees associated with it. This can be an expensive option, but maybe worth it if you wish to maintain your current coverage for up to 18 months. 

You could join your spouse's insurance plan

You may have the option to enroll in your spouse's insurance if they are still working. This may be the best option for coverage and price if this is the situation you find yourself in. 

You might qualify for Medicaid

Medicaid recipients must meet a number of requirements. The main one is income level. A qualifying income is considered to be low or very low. Other things are that you must be a U.S. national, citizen or have an immigration status that meets certain criteria. If you qualify, this is most likely the cheapest option, but it is good to keep in mind that not all care and providers accept Medicaid. 

Take a look around the Marketplace

A new Marketplace was created with the 2010 Affordable Care Act. Visit HealthCare.gov to see what options are available to you. The options that you are given on the exchange are based on what is available in your area. 

Health Sharing plans may be an option

Health Sharing plans, also known as “health sharing ministries,”  are plans that are based on the idea of sharing bills with individuals who are grouped under a certain set of values.  It works by paying in a certain amount of money each month and when you have an unexpected medical expense, the Health Sharing plan will chip in to help out. You should note, that these plans are very limiting and individuals that have certain lifestyles may not be accepted.

Keep working part-time 

You may be able to get health insurance coverage by working part-time. Some companies offer such benefits. There could be some restrictions so be sure to ask questions before signing up.


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