Keeping Workplace Extended Health Insurance or Not?

[lv61]

Hi Everyone,

After working at a Megacorp for 30 years, I unexpectedly received a layoff package this week.

Since I am older than 55 year old and working for them for 30 years, I am qualified for the extended health insurance. The problem is I have to pay for the full premium, which is $754 for myself for Blue Cross Blue Shield High Deductible. I have a certain time window to enroll in it and can not delay enrollment until the time we need it which is when my wife retire sometime in the future.

The question I have and appreciate any input is should I enroll in it? My other option is to enroll on my wife health insurance at her workplace which would cost much less. I am 57 and my wife is 53. She plans to work for another 4 years. If we go this rout, when my wife retires, we will have to shop for medical insurance on our own. We do not have any pre existing condition, however the uncertainty of the health care in the future is a big concern for me.

[Mulligan]

Quote:

Originally Posted by lv61 Hi Everyone, After working at a Megacorp for 30 years, I unexpectedly received a layoff package this week. Since I am older than 55 year old and working for them for 30 years, I am qualified for the extended health insurance. The problem is I have to pay for the full premium, which is $754 for myself for Blue Cross Blue Shield High Deductible. I have a certain time window to enroll in it and can not delay enrollment until the time we need it which is when my wife retire sometime in the future. The question I have and appreciate any input is should I enroll in it? My other option is to enroll on my wife health insurance at her workplace which would cost much less. I am 57 and my wife is 53. She plans to work for another 4 years. If we go this rout, when my wife retires, we will have to shop for medical insurance on our own. We do not have any pre existing condition, however the uncertainty of the health care in the future is a big concern for me.

If you stay on your company plan will you be able to remain there until Medicare?

[lv61]

Yes I could stay with them until Medicare. At today price the cost for a couple is $1800

[Donno]

Quote:

Originally Posted by lv61 Yes I could stay with them until Medicare. At today price the cost for a couple is $1800

I wouldn't count on it. My employer canceled retiree health insurance starting next year after offering it for the 35 years I worked there.

[lv61]

Quote:

Originally Posted by Donno I wouldn't count on it. My employer canceled retiree health insurance starting next year after offering it for the 35 years I worked there.

Good point. I for sure do not know what happen to the corp in the future. But the HR lady told me the policy cover it until Medicare.

[MichaelB]

lv61, what is the deductible and total out ot pocket per person for the employer plan?

There's really no downside to taking the employer retiree plan, unless it is substandard in some way. If the employer withdraws the coverage, the retiree just goes to the ACA marketplace. Employer coverage is usually less costly and has lower deductible amounts.

Uncertainty with the future of the ACA is a legitimate concern. If they want comprehensive health care insurance the OP has 2 options - take retiree coverage or look for ACA coverage. The ACA option does not go away.


ETA - The option for the OP's wife to stay on her employer policy for 4 years is the riskier choice, because once she retires, she has only one choice for healthcare, which is ACA. Joining the OP on his retiree policy may cost more today, but it means, for now, they have 2 options.



It would be interesting to estimate and compare how much more the employer retiree cost is for her policy for 4 years vs how much more the ACA will cost for 8 years

[lv61]

Quote:

Originally Posted by MichaelB lv61, what is the deductible and total out ot pocked per person for the employer plan? There's really no downside to taking the employer retiree plan, unless it is substandard in some way. If the employer withdraws the coverage, the retiree just goes to the ACA marketplace. Employer coverage is usually less costly and has lower deductible amounts. Uncertainty with the future of the ACA is a legitimate concern, but it does not affect this choice. If they want comprehensive health care insurance the OP has 2 options - take retiree coverage or look for ACA coverage. The ACA option does not go away.

Deductible is $3K/6K for single/family
Max out of pocket per person is ~$7.5K

I think the downside is the $9K I have to pay for each of the next 4 years just to cover myself with my company plan while if I sign up with my wife workplace plan, I pretty much pay barely anything

[Mulligan]

You have to figure out the variables Micheal and Donno brought up...Consider this though, if you assume company option availability, your group plan will stay a group. You go one your own in ACA, your premium goes up 2 ways...General increase and age specific increase. You dont get to hide out in a group.
ACA screwed me. I could have stayed on my company plan but going individual was way cheaper. Then ACA came in and my plan was dropped. When I was on my own premium went up about $10 first 6 years. In last three years it has gone up for me $480 alone.
If I knew ACA was going to come about, and if I knew “if you like your plan you can keep it” wasnt true, I would have stayed on my employers plan.

[MichaelB]

Quote:

Originally Posted by lv61 I think the downside is the $9K I have to pay for each of the next 4 years just to cover myself with my company plan while if I sign up with my wife workplace plan, I pretty much pay barely anything

Compare that cost with the additional cost of insuring you both on the ACA after her employment ends, vs your retiree policy. ACA pricing allows the premiums to increase with age. A 60 year old with a comprehensive ACA policy will most likely pay more than $1800 for a couple.


edit - Mulligan and I cross-posted but we're making the same point.

[lv61]

Mulligan and MichaelB,

Thank you so much for your help. I was not aware how much ACA premium could increase from one year to another and with age.

[CardsFan]

lv61
Mulligan and MichaelB have made some good points. Unless you can manage income to get a subsidy, ACA premiums for similar deductibles and Max OOP would likely be higher than $754 for 1 or $1,800 for 2.

Two more questions:

Is your Megacorp plan HSA eligible? If so, it is a great way to avoid taxes on medical costs.

Can you add your wife at a later date, when she retires? Usually this is allowed as a "life event", but you should confirm. If so, I think keeping the Megacorp plan may be better, and in any case no worse, than going ACA. If not, then you will be in the ACA market in 4 years, no matter what, at least for 1 of you. In that case it might make sense to go on your wife's plan now and save $36k for the future. Of course, just as happened to you, there is no guarantee she will work 4 more years.

[Mulligan]

Quote:

Originally Posted by lv61 Mulligan and MichaelB, Thank you so much for your help. I was not aware how much ACA premium could increase from one year to another and with age.

Another thought. I know your healthy now, but compare your companies network to an ACA network. I got a restricted network now stuck on ACA. Thank God I dont need it. But, if something happens as I am dropping to the ground, I will put a sign around my neck with instructions to put me on ice and take me an extra 20 miles to get me to an in network hospital, lol.

[lv61]

Quote:

Originally Posted by CardsFan lv61 Mulligan and MichaelB have made some good points. Unless you can manage income to get a subsidy, ACA premiums for similar deductibles and Max OOP would likely be higher than $754 for 1 or $1,800 for 2. Two more questions: Is your Megacorp plan HSA eligible? If so, it is a great way to avoid taxes on medical costs. Can you add your wife at a later date, when she retires? Usually this is allowed as a "life event", but you should confirm. If so, I think keeping the Megacorp plan may be better, and in any case no worse, than going ACA. If not, then you will be in the ACA market in 4 years, no matter what, at least for 1 of you. In that case it might make sense to go on your wife's plan now and save $36k for the future. Of course, just as happened to you, there is no guarantee she will work 4 more years.

Yes we do have HSA. Thank you for bringing up the point of taxes on medical costs.

HR did confirm with me that my wife retirement is considered a "life event" and that I have 30 days from her retirement date to add her on.

So it seems like staying with my Megacorp plan for myself for now and add my wife to this plan when she retire make the most sense.

Thanks again everyone

[lv61]

Quote:

Originally Posted by Mulligan Another thought. I know your healthy now, but compare your companies network to an ACA network. I got a restricted network now stuck on ACA. Thank God I dont need it. But, if something happens as I am dropping to the ground, I will put a sign around my neck with instructions to put me on ice and take me an extra 20 miles to get me to an in network hospital, lol.

Another great point. I will need to do some homework on the network comparison.

Thanks Mulligan

[wolf]

Great information. Very valid points to consider. 16 years ago. 55 yrs old. SF Bay area.
Megacorp. (think H/P, Agilent). Watch for changes....promises do change, my experience.
After retirement, and as the years passed:

1. Megacorp, offered Retiree's insurance. Retires were included with working employees.
Rates very low. Great!

2. Megacorp, said, not fair, working employees subsidizing retires. So Retires lumped
together. Rates increased dramatically. Not Great!

3. Megacorp, dropped group coverage entirely. Based on years of service, was given
monthly $ amount to be used for health insurance. My, case, 27 yrs. service
Got $250/month.

4. Paid very high medical premiums for wife and self, till we reached 65.

5. Good luck. Have plan A, but back up plan B, Megacorps, do change what they
"intend" to do, as in my case.

[CardsFan]

Quote:

Originally Posted by wolf Great information. Very valid points to consider. 16 years ago. 55 yrs old. SF Bay area. Megacorp. (think H/P, Agilent). Watch for changes....promises do change, my experience. After retirement, and as the years passed: 1. Megacorp, offered Retiree's insurance. Retires were included with working employees. Rates very low. Great! 2. Megacorp, said, not fair, working employees subsidizing retires. So Retires lumped together. Rates increased dramatically. Not Great! 3. Megacorp, dropped group coverage entirely. Based on years of service, was given monthly $ amount to be used for health insurance. My, case, 27 yrs. service Got $250/month. 4. Paid very high medical premiums for wife and self, till we reached 65. 5. Good luck. Have plan A, but back up plan B, Megacorps, do change what they "intend" to do, as in my case.

Point well made. Changes WILL occur. But some numbers would be helpful. Was your base premium, in the end, similar to OP?

In my case, we get a subsidy that covers more than 1/2 the insurance cost. My unsubsidized amount would be $1745/month, right in line with OP's $1,800 for two. As I understand, Megacorp is self insured for regular employees, but actually purchases the insurance for retirees from my division.

Since OP is not being subsidized, huge increases are unlikely. Of course, if they eliminate group coverage entirely, like happened to you, then the OP is back to ACA. Could happen, but might not.

[Donno]

The thing about mega corps is that they don't care anything at all about retirees. My mega corp was once in the DJI 30 for over 50 years. Now they're just a shell of their former selves and the management has turned over from worked up from the bottom types to type A personality jerks.

If I didn't love some of my former coworkers, I would relish seeing them filing for bankruptcy.

Anyhow, I have 4 years left to figure out my healthcare until I get on medicare. Hopefully I make it that long and our great politicians don't stick up their middle finger to me until I get there.

[Mulligan]

Quote:

Originally Posted by Donno The thing about mega corps is that they don't care anything at all about retirees. My mega corp was once in the DJI 30 for over 50 years. Now they're just a shell of their former selves and the management has turned over from worked up from the bottom types to type A personality jerks. If I didn't love some of my former coworkers, I would relish seeing them filing for bankruptcy. Anyhow, I have 4 years left to figure out my healthcare until I get on medicare. Hopefully I make it that long and our great politicians don't stick up their middle finger to me until I get there.

One needs to hop on a union backed regulated utility retirement plan. They can pass the cost on to the consumer and dont fight as hard to get rid of it, lol. I got an 89 year old neighbor who retired from local utility. He has free retired health care since he was 56. Never pays a lick as the plan became the backup to Medicare when he turned 65. I had another friend working for a utility bitching his deductible went to $200 a year. He quit complaining when I said I pay currently almost $500 with a $7000 deductible. He has been in bubble for 30 years and had no idea...He was stunned!

[Lakewood90712]

A few things to consider. It can get murky.

?1. How high is the deductible ?

.2. Is the Insurance you are being offered guaranteed in writing, and at that rate until you turn 65 ?

3 Is it a conversion plan from the current carrier ?(H.I.P.A.A.https://en.wikipedia.org/wiki/Health...ountability_Ac ) if so, you can be dropped for many reasons, ex: carrier discontinues that plan or line of insurance in the future

.4 Is it a COBRA extension of your current plan ?, then it's 18 mo.

When you say no pre existing conditions, with medically underwritten plans, have you been treated for any injury / disease or been told you should seek treatment for any injury / illness for THE LAST 10 YEARS ? BECAUSE THAT IS WHAT THEY WILL ASK ON A LONG QUESTIONNAIRE . Many minor medical things a reasonable person would not consider significant can be cause to reject an applicant.

If you stay un employed, best bet would be to sign up on your wife's insurance IMO.

If you go with an ACA plan you don't have to worry about medical history.

? any chance you will go back to work with benefits for a few years ?

[ivinsfan]

Buried in your first line is the fact that your Megacorp did a RIF...why is this happening and were big numbers involved? This is usually a sign that something is going on behind the scenes.

Based on this I'd probably flip over to your spouse's plan and just see how things play out. As of now there is no serious discussion about putting pre-existing conditions into play. In fact when it was talked about after the election, the idea was if you were completely uninsured you wouldn't be able to just buy a policy without underwriting but if you maintained ACA type coverage you would be protected and could still switch insurance companies.

At this point and under current rules one of your goals could be to stash away after tax money and tune up your expenses so that if your DW should get a RIF or want to retire you can control your taxable income and qualify for a subsidy. At your age even coming in a few dollars under the cap will reap big benefits.