Retiree health plan

[leftcoaster]

Could folks please share some numbers about any retiree health care benefits you’ve gotten from various mega corps.

I see that mine offers benefits at age 55. One could go on COBRA and retire earlier.

What are the economics of these plans and how do they compare to

1) during employment

2) open market.

Assume no ACA subsidies.

I have yet to call for details from my megacorp and am interested in a cross section here rather than specific guidance.

[jebmke]

I retired at 55 in 2007. Company paid for about half the cost of my premiums during the pre-Medicare period plus a $1,000 contribution to the HSA each year. Once we went on Medicare they provided a subsidy of $900 each for me and my spouse for supplemental insurance for the first three years on a Medicare. After that, we are on our own.

[IowaFarmBoy]

I recently retired. My megacorp offered retiree health insurance if you started your pension at retirement which can be as early as 55. Pre-retirement, member and spouse paid about $250/mth for a $2500 individual deductible and megacorp contributed $2000 to an HSA. Post-retirement coverage costs $750 and has a $1500 individual deductible with no HSA contribution. Once we hit Medicare, we will switch to that and the company will give us $200/each for the purchase of a supplement.

I was fortunate to be grandfathered into subsidized coverage for both my spouse and I. Employees of a younger age and/or less years experience might only have the employee subsidized or no subsidy. Those whose spouse isn't subsidized will pay about $1500.

[jeffyscott]

My understanding is Cobra is very expensive, due to adverse selection, don't have any figures though.

Not a corp, but I can buy in to former employer group coverage, but with no subsidy. The premiums for our $3000 deductible HDHP are around $1900 per month and there is a cheaper plan at ~$1600 (family rate, they have only "single" or "family" and rate for single is about $650-800). As a benefit for accumulated, unused sick leave the coverage is currently free for me and that should last until I am 65, at that time with one person on Medicare the cost drops to about $1100 per month.

If I had to pay, I don't know if it would be worth $19,000-$23,000 per year (or $13,000 when I am 65) to cover my wife and me vs. getting individual coverage, but at least it was something that was certain to be available after early retirement.

[earlyout]

Retired from megacorp at 58. Excellent medical and drug coverage subsidized by megacorp. Our share of annual premiums for 2 people has averaged about $2000 (plus Medicare premiums) over the last 20 years.

[bberris]

Cobra costs are not influenced by adverse selection. You pay the group rate that your ex-company negotiated plus 2 %, unless they provide retiree benefits. It is expensive because you are paying the whole cost instead of the company-subsidized reduced cost.

Cobra may or may not be cheaper than individual unsubsidized plans; you just need to shop the state or federal ACA site and elsewhere. Some insurance is only available off the ACA marketplace.

[leftcoaster]

Cobra costs are not influenced by adverse selection. You pay the group rate that your ex-company negotiated plus 2 %, unless they provide retiree benefits. It is expensive because you are paying the whole cost instead of the company-subsidized reduced cost.

Cobra may or may not be cheaper than individual unsubsidized plans; you just need to shop the state or federal ACA site and elsewhere. Some insurance is only available off the ACA marketplace.

Did not ask about cobra costs. Merely mentioned that cobra is a way to bridge gap to 55 when retiree plan is available. The topic of this post is the retiree plans, not cobra.

[jeffyscott]

Cobra costs are not influenced by adverse selection. You pay the group rate that your ex-company negotiated plus 2 %, unless they provide retiree benefits. It is expensive because you are paying the whole cost instead of the company-subsidized reduced cost.

Cobra may or may not be cheaper than individual unsubsidized plans; you just need to shop the state or federal ACA site and elsewhere. Some insurance is only available off the ACA marketplace.

Thanks for the correction. My only experience with that was getting a quote for individual coverage for 20-something kid who was losing our coverage. So I probably remember it being shockingly high compared to buying an individual policy for a healthy young person at that time (this was pre-ACA, 12-13 years ago).