An important aspect of early retirement is planning for medical insurance coverage. Here is a list of options for securing coverage if you plan to retire before age 65.
- COBRA: Check with your Benefits Department to see if COBRA coverage is available. These benefits typically need to be activated within 60 days from your loss of coverage date. COBRA benefits allow individuals who would otherwise lose coverage to maintain it for a period of time, typically at a higher, unsubsidized cost. COBRA may be an option, but it may not be the least expensive option.
- Exchange Plans: The public Exchange plans are part of the Affordable Care Act. Attempts to repeal this have fallen flat and it is likely to stick around even if the administration changes, especially in California.
- Private Marketplace: You can secure coverage through private placement. You will face little risk of changes in the law, but you will not receive any tax credits or subsidies.
- Retiree Medical Benefits: Check with your Benefits Department to see if your employer offers medical benefits in retirement. You may be eligible for employer-provided subsidies based on years of service, although this is becoming rare.
- Part-Time Work: Certain large employers are now offering medical benefits to part-time, hourly employees. (Starbucks is an example.)
You can sign up for Medicare 3 months before the month you turn 65. We highly recommend you consult a Medicare specialist before signing up. A consultant will advise on Medicare Part A, Part B, Part C, and Part D, plus dental and vision coverage depending on your situation. Please reach out to us if you would like a referral.
If you plan on an early retirement and you would like to further discuss your options for medical insurance coverage, reach out to the Warren Street team.
Emily Balmages, CFP®, CRTP
Wealth Advisor, Warren Street Wealth Advisors
Investment Advisor Representative, Warren Street Wealth Advisors, LLC., a Registered Investment Advisor
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