Keep company medical or get private plan?

[TreyLagger]

Hello All - thanks in advance for any assistance you can provide. I'm retiring on 10/17/14 at the age of 55 and am able to keep my company medical insurance, but at a cost. Based on my years of service the company will subsidize about 25% of the costs with my wife and I paying the remaining 75%. This sounds like a good deal but my monthly cost will be about $1,700 for medical, dental and vision. This seems like a lot to me.... Obviously there's lots of variables here based on the plan type and deductibles. I guess what we're looking for is someone we can discuss our options with. We have to make the decision to keep it or go with private insurance and once the decision has been made there's no going back to the company plan if we opt out.

Again, any help is greatly appreciated!!

 

[MichaelB]

TreyLagger, welcome to the forum. Should you take the company insurance? Depends on what you need, how much that costs in the individual marketplace, and what happens to it when you read Medicare eligibility.

Dental expenses can be very costly. Is this coverage comprehensive, with no limits, covering expensive treatments (implants) and offering a wide network or practitioners, or does it have low yearly limits and reduced networks?

Vision coverage is mostly eyeglasses and in the era of inexpensive online options probably overrated.

Individual healthcare is the easiest to analyze, you can get a quote for similar coverage from the state health exchange. You can also change coverage options and measure the cost impact.

Whether $1700 is excessive depends on how deep the coverage is and how much you would expect to pay in non-covered expenses.

 

[Gotadimple]

TreyLagger,
As you said there are many variables. At a minimum you need medical coverage. Depending on the benefits for your dental and vision care, you may not need coverage, as the 'savings' could be a wash. That is the cost of premiums and out of pocket are higher, the same, or slightly lower than going without coverage and paying from savings or an HSA.

So as Michael indicated, the formula you need to account for is deductibles+out of pocket (co-pays)+premiums. That's the total maximum cost to you each year, based on what you use now. If you have kept your claim benefit statements (commonly called EOB's), you can see what your doctor bills, and what the company pays, and your out of pocket costs. If not, they are likely on-line at your carrier's member website.

This was my experience, and I worked in the health insurance industry. I retired at age 59. Note that I am not an insurance agent, so this is just my experience.

To help you decide, you need to compare your benefits to what's available - including premiums. I too had an employer subsidized plan. I found that the coverage was broader and the premium the same or slightly lower than what I could find with private insurance.

To start your comparison:
* One way is to contact several carriers and have them send you individual insurance packets.
* A second way is meet with an insurance agent to review what you have and what they sell. Most are very happy to advise you, whether you buy from them or not.
* A third way is to use the ehealthinsurance.com website. This is an insurance agent licensed in all 50 states. You will get several quotes, and can use their customer service for questions if you feel comfortable in doing comparisons by yourself.

At an agency, online, or with an individual carrier, when you call to discuss, you are speaking with a licensed agent. Some get compensated directly for selling to you, others get compensated by the work of their team in making sales. Don't let the compensation issue stop you, they all want to help! In the individual market, generally, people who talk on the phone earn salary and commissions. It's how they are paid, and the payment is factored into the premium and is not something you can avoid.

At your age it is beneficial to consider an HSA, especially if you and your family only use the minimum wellness benefits. The HSA creates a tax credit for you and has you socking away a good amount each year to use after you go on Medicare.

Review your options with your employer. You may be able to switch to a different plan when you retire, they may offer an HSA. There many options, but the first step is knowing what you have, what it costs you, and whether it is worth switching. In my case it wasn't worth the switch as the benefits were broader.

Best of luck,
Rita

 

[athena53]

One other question: is your company plan High Deductible and have you absorbed a lot of the deductible? (OK, that's two questions.) My guess is that if you start a new HDHP plan, the deductible is calendar-year and whatever you paid under your company plan won't count towards the new plan. In that case, it may be better to move to a new plan on 1/1/15.

 

[Cat-tirement]

One other question: is your company plan High Deductible and have you absorbed a lot of the deductible? (OK, that's two questions.) My guess is that if you start a new HDHP plan, the deductible is calendar-year and whatever you paid under your company plan won't count towards the new plan.

This isn't true in my case. I will be RE from my MegaCorp next month, so I asked about how the deductible change will be handled. My current plan is a HDHP, but it isn't offered to retirees, only a couple of more traditional PPO style plans. I was told that anything I have paid toward my deductible in my current employee plan will be credited toward the deductible in whichever retiree plan I choose. These are all managed by the same administrator, so that probably makes it easier.

Unfortunately, the company doesn't provide any subsidy tor retiree medical plans, though retirees do get the big self-insured company rates.

 

[Animorph]

I didn't have the option to keep DW's company insurance. I'm shopping on healthcare.gov and I'll probably buy direct with the insurance company since I won't get a subsidy anyway. You get the same price either way for exchange listed policies.

In OP's case, I'd start with healthcare.gov. Is there a plan there that matches fairly closely to your company coverage? Cheaper or more expensive? Then, does one of the HD plans look like it might be less expensive for you? You can have a choice of plans if you shop around, which might be more appealing than your company plan.

I'm going to self insure for dental and vision.

 

[Telly]

I'm going to self insure for dental and vision.

We've done that for 12+ years, has worked out well so far. A couple crowns, new sets of glasses. Major eye problems are covered under medical ins. We've found that our eyes just don't change much anymore, as far as correction, as compared to the young years.