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High HIC cost may derail 2016 retirement
Old 06-13-2011, 04:53 PM   #1
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High HIC cost may derail 2016 retirement

Just learned that even though my megacorp claims to have 'retiree health coverage' the retiree pays the full cost.

The only benefit we get is group rates. One sentence in the plan says that COBRA coverage is typically cheaper than retiree HIC!

I'm not happy, but now that I know for sure what the plan is I can start investigating alternatives.
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Old 06-13-2011, 05:16 PM   #2
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The goal for business generally might be to get out of the business of employee/retiree coverage altogether. This is the situation in Europe where the state provides the coverage and thus save employers the cost. This is a huge number for Boeing vs. Airbus.
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Old 06-13-2011, 05:23 PM   #3
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I would agree that by the time we retire there will be even fewer companies offering coverage at all.

Just got confirmation on DH's 'retiree' medical plan as well. The lowest plan is $1055/month for the two of us.

Looks like I will be ratcheting up the budget for HIC and rerun Firecalc to see how much more we'll need for a comfortable retirement.
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Old 06-13-2011, 05:40 PM   #4
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Quote:
Originally Posted by Lisa99 View Post
Just learned that even though my megacorp claims to have 'retiree health coverage' the retiree pays the full cost.

The only benefit we get is group rates. One sentence in the plan says that COBRA coverage is typically cheaper than retiree HIC!

I'm not happy, but now that I know for sure what the plan is I can start investigating alternatives.
This is the same situation as DW's ex-megacorp. Isn't that a joke? Like you mentioned, COBRA is cheaper than retiree medical HIC (by half, in our case). I think the only benefit of 'retiree health coverage' is when you have pre-existing conditions when other HI may cost much much more.

But retiree dental and vision is cheaper than COBRA (by the 2% administration fee).

But we knew about these costs and were all budgeted for in our plan.
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Old 06-13-2011, 05:41 PM   #5
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Quote:
Originally Posted by Lisa99 View Post
I would agree that by the time we retire there will be even fewer companies offering coverage at all.

Just got confirmation on DH's 'retiree' medical plan as well. The lowest plan is $1055/month for the two of us.

Looks like I will be ratcheting up the budget for HIC and rerun Firecalc to see how much more we'll need for a comfortable retirement.
I would plan for unsubsidized coverage regardless of the current offerings. A better or more affordable plan would be an opportunity to save.
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Old 06-13-2011, 06:11 PM   #6
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That is why I continue to work PT. It is more about the insurance. It was free up until this year now I have to kick in $40/week.
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Old 06-13-2011, 06:46 PM   #7
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DH and I are in the same boat. The only advantage to being in our group plan is we don't have to worry as much about being dropped. Like you, we're paying big bucks. We're afraid to drop it and go out there on our own 'cause what if the unthinkable happens? There has to be a better way....
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Old 06-13-2011, 08:14 PM   #8
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We recently found out ours will be about $870 month (about double what we had planned because we were told a year ago that we qualified for a state employee plan at half that amount). This includes our 21yo son.

Thing is, we already have retirement dreams running through our veins. DH is retired as of one week ago (officially July 1) and I have one more year so he will be on my plan until July 1, 2012.

After that, we are just sucking it up and cutting back on fun or pulling more out of 403k or WHATEVER it takes. DH has mentioned getting a part-time job down the road and I am not arguing.
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Old 06-13-2011, 09:50 PM   #9
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Make sure you explore high deductible plans with HSA's. Sometimes the individual market is a lot cheaper if you are healthy. I passed on the chance to stay on the group plan at $500 a month, and chose a 5k deductible for under $65 a month. Saving a lot of money.I figure if I stay healthy for 10 years (would be 57 then), I will have enough in my account to make my plan a "zero deductible" until Medicare. If I continue to stay healthy I can use the money to pay for Medicare premiums tax free. I basically get $1000 back on my taxes each year for contributing $3k each year.
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Old 06-13-2011, 09:54 PM   #10
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In our case it's not the cost, although that's definitely rising. But through the retiree health care plan we are guaranteed insurance, whereas if we tried to go individual we might not be able to get coverage at all due to pre-existing conditions. That was my reason for working past FI, just to get that guarantee.
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Old 06-13-2011, 10:04 PM   #11
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Don't forget these retirement benefits are usually unsecured, just sort of promises by the company that they can pretty much change at will. Don't count on it for a long period, even if your already using it.

$1000/month for a couple for a good insurance plan doesn't sound too bad. I wish I had that option. We'll be hitting private insurance when DW retires, and might have pre-existing conditions that could make that pricey to impossible.
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Old 06-13-2011, 10:08 PM   #12
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Every fall, I've been thrilled to see Megacorp offer us retiree coverage for another year. DW has 4 1/2 years till Medicare, I have .....a few more that that.

I'm not very healthy- should have taken better care of myself. The individual market would be out of the question- for me.
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Old 06-14-2011, 02:21 AM   #13
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@SteveL:
At least in Germany, where a lot of the Airbus parts are manufactured, the state does not pay health insurance for employees. It is covered by employees + employers almost equally and retiree healthcare comes at cost of the employees, subsidised by their own payments in their active years.
Some of the payment is deductictible in my tax declaration - if income is high enough.
On Europe: Different health systems within the EU
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