My husband’s company that we both receive coverage from has retiree health care. It’s not going to cost us any more than it did when he was employed full time.
But in the last few years coverage has changed, the company will only cover us until we qualify for Medicare. After we are an age for Medicare, they will give us a dollar amount based on years employed, to buy our own supplements.
This is the new model for those companies that offer retiree health care. You can retire before you reach Medicare age (and most employees do) but your employer healthcare will only be until you are eligible for Medicare.
Just noting that even companies with generous retiree benefits are changing. My mother’s employer did the same. Unfortunately her stipend covers less and her costs keep going up.
I cannot imagine lawmakers making up some of the specific rules within Medicare. They most likely leave to the up stream agency (CMS reporting to HHS? IDK). I think also some of their decisions have to do with limitations of their automated systems.
For example one cannot sign up for ‘special enrollment period’ during initial enrollment period - I am sure that has to do with their computer system. They also have rules on their initial enrollment period on when Medicare B can take effect after months of Medicare A. That situation hosed up DH being able to sign up when we wanted his Medicare B to be effective (they have a special rule that if you sign up for B after your birthday but still in your initial enrollment period you have a rule that supersedes a specific month you want to start with a special enrollment period). So we could start Sept 1 or Nov 1 but not Oct 1 (with his application in July), despite having health coverage through Sept. DH turned 65 in June and had Medicare A in place for June with earlier application (during initial enrollment period). Various things may be clicked to on their site easily or not, some may be evident or not in the Medicare and You (the official US government Medicare handbook).
Technically DH ‘could’ start Medicare B on Oct 1 by special enrollment period with backdating, but they had his file so hosed up and we wanted to be sure to have the supplement in place. I totally lack trust in their operational system based on our experiences.
Also if you sign up for Medicare A and B and Social Security for the month you turn 65, they don’t process SS until the first of that month (I imagine they have an automated system to do so). I only found that out by talking to SSA. I already knew my Oct SS would be paid in Nov and the date it would be paid (the 2nd Wed of Nov).
However I do understand Medicare/SSA has to interpret the specific laws with things like the lengthy recorded messages one has to listen to with initially signing up with a Medicare D, drug plan. The pricing and benefits literature one receives at the open enrollment time which tells you what you are paying in the next year for the plan you are currently on (so you have an opportunity to change supplement/advantage and/or drug plan).
If you work for the government, they have different ways of doing things and often different ways of thinking. For example, with DH’s hosed up SSA/Medicare file with them (which was turned over to the payment center 9-28-2021), they told us having a note put in (they were suppose to process in payment center within 30 to 60 days, yet still says ‘pending’) would most likely slow things down. So we had no note put in on our phone call 11-8-2021 (a note was put in with our phone call 10-18-2021), but with our call today 12-6-2021, the local office administration is ‘talking to the payment center’ to handle the pending action. We probably by the phone call today talked to about all of the local agents who all have looked at DH’s messed up file - messed up on their end.
The phone system with SSA absolutely encourages going on line and doing things with the COVID excuse. I regret not phoning the local SSA office very early in the process. Then I could have learned more and maybe avoided DH’s file getting messed up. And avoided all the angst and time DH and I had to spend.
Yes, but the implementation of what is legislatively specified may be complex. A non-Medicare example is the simple-appearing concept of different income tax rates for different levels of income and different types of income. It becomes much less simple when implemented (e.g. when trying to calculate withholding accurately or calculating income tax when there are long term capital gains or alternative minimum tax).
@deb922 - that is what my employer does too. I retired in January and am covered under the plan as a retiree, but when I turn 65, the company will discontinue and pay me an amount per month to be used for Medicare supplement.
Years ago my company switched to a “new model” similar to what you described (covered retiree medical until age 65… then annual stipend). But later they switched to new2 model, where (if retiring with 30 years service) there is lump sum available - mine will last about 3 years, self-coverage only. For even younger employees, they have new3, which is nada for retiree medical.
Same kind of deal with pensions being phased out, transitioning in stages to just 401k matching. But new hires know that’s the deal, which is the same in most other places too. In a way it is good because it makes it easier for them to switch jobs without fear of loosing out in later years.
@busdriver11 Went through that recently with my dad. My mom signed up for Part D coverage but my dad never did. My mom has now passed but we are moving my dad to a different supplemental plan (what he pays now is very expensive and the coverage is just ok). Thankfully his heathcare needs are not significant (few meds particularly for someone almost 90). But he will pay a $70/month penalty for not having Part D coverage. Not sure why they didn’t have it. May have been that coverage was new at the time and he had even fewer meds back then. Mom had more so makes sense that she would have coverage.
Its a complicated process. But my wife and I got on the phone with someone who walked us through different plans in my dad’s zip code (with a healthcare power of attorney). Helped sort throught options.
I am the only employee of a company that I own. Like a different company that I own part of, we use BCBS for insurance. They require employees to shift to Medicare when they hit 65 but pay the 80% of Medicare premiums.
I’m the only employee of that age and ShawWife is just turning 65. So, we have to shift her to Medicare. Apparently, she didn’t have enough credits to do Medicare herself and she had to do it through me, so today we had a call with someone at SSA, who filled out the forms and told us she would start Medicare on 1/1/22. However, they did not have any information that she was a US citizen, so we have to send them her passport to verify her citizenship. So, we Fedexed her passport shortly after the call.
Then my company will pay both of our Medicare premiums.
H is a fed employee and our retiree medical premiums will be double what they currently are. His agency has an additional subsidy towards medical (beyond the regular employer share) in lieu of salary. That doesn’t carry over in retirement. Part D will cost me a LOT more in OOP because of my meds (we’ll go through the donut hole in 2-3 months). Looked at every option in our area and the prices were remarkably consistent.
Wish I could contact a benefits person at H’s agency so I could get a better sense of our options. I don’t know, for example, if H’s med coverage through his agency will still include prescriptions once we’re eligible for Medicare, or if I’ll be forced I to Part D and then subject to the risk that my $100k/yr med goes off the formulary. The dollar amounts are significant enough that it’d be nice to know we’ve covered our bases.
@CountingDown: Why can’t you find a benefits person? Start with the regular HR person, or the person your husband is dealing with about his retirement options. Someone must have this information.
HR staff is still WFH, and H says they aren’t terribly helpful. Just thought he’d be more of an active participant in this, though I probably shouldn’t be surprised. We still don’t have wills after nearly 38 years! (He’s an attorney and financial regulator, maybe it’s too much like work?)
Some info I can get from OPM, other stuff is behind the employee login.
He’s not planning to retire for at least seven more years, but I hit Medicare age in four years. Part of my concern is that LTC and life insurance premiums are getting steep now that we’re 60, so I want to evaluate the cost/benefit analysis of those thing against what we have/will save. Also want to dig into the timing of taking SS, tax efficiency in drawing down taxable retirement vs personal savings, etc. Would be easier if I could poke his financial brain on some of this.
@CountingDown I would start informing myself about wills, probate and estates in your state and asking DH questions. Also about how he wants to handle insurance and LTC premiums. You both need to understand some priorities with important things. Neither spouse plans to get ill or die unexpectedly, but having a lot of loose ends makes it more difficult if this does happen.
DH and I are both 65 - we have wills from long ago (first child stimulates a lot of couples to go this step) - we still live in same state, and plan to remain here in the foreseeable future. We need to get on the ball with other things too, specifically estate planning. I also do need to spell out what are ‘valuables’ and not to go willy-nilly tossing things.
@CountingDown I’ve had some of the same experiences.
HR has been terribly unhelpful as far as answering or having any knowledge about retirement. In fact when my husband filled out his retirement papers, the HR representative used yellow highlighter that he needed to call our benefits provider about a “retirement package”.
Called the number, the representative was confused about any “package” but sent us a paper about taxes. My husband waited almost 2 weeks, no package. And called again. There is no “retirement package”. It can all be done on line. But Retirement HR still thinks there is a paper way instead of knowing what is actually the way of doing it.
My husband is very patient and does not want to bother people. It’s frustrating when I’m more of a get it done and make calls kind of person. He isn’t particularly proactive. When it’s his job, they don’t talk to the wife. It sounds like your husband may be the same.
We are also on a very expensive drug that will not be covered once Medicare starts. Also any program to help pay for said medication requires you not be on any federal medical program. So he won’t be able to be on the medication that is very effective right now. Fortunately there is another formulation that Medicare will pay for.
This is the reality for many. I hope and this isn’t a particular political statement. But for us and for others who are in this predicament, we hope and pray for changes that are being considered. We’d just like to stay on a life saving medication that’s working.
If it’s the same insurance offered to almost all federal civilian employees, then if you keep the same health plan, the prescription coverage will stay the same. I just had a conversation with my uncle over Thanksgiving, and he said they didn’t do part D - just continued with their regular insurance (I think it’s BC/BS, but maybe it was GEHA). They opted to not even do part B, which is something I gather Consumer Checkbook recommends as a viable option for Feds. I suspect we will do both federal retiree insurance and Medicare A&B.
@1214mom We’re on GEHA. My contingency planning includes a worst-case scenario where we keep GEHA and it includes Rx, the govt changes retiree medical and we no longer have Rx coverage, and Part D’s formulary doesn’t include Sprycel. Game over.
The medical expenses are less of a concern than the prescription coverage.
With every situation, there may be some ‘caveats’ and ‘buyer beware’.
Ask a lot of questions and get a lot of information when one needs expensive medications. I have a friend who is continuing to work because he is on life saving treatments for his stage IV cancer, and Medicare as primary will not provide same coverage of his IV treatments or scans, medical testing. They are grateful he can continue to work (EE, computer desk job - can also work from home and varied hours around his treatments and illness).
If stuff is done online - look at the stuff together. DH has gained the skills/insight along the way, but for a long time he has relied on me to manage his 401k (our largest asset that has spun off to other sizable assets).
Full disclosure, I am an FA (fiduciary) who manages lots of money (build portfolios and use third parties) and protects wealth. I explain it that way to echo @bluebayou 's point. I discuss this with clients ALL the time.
Typically break it down in to 3 stages of money / life: accumulation, preservation, and legacy. Retirement is about preservation (preserving your lifestyle). Typically it takes a different approach to build the nest egg vs preserving/distributing the nest egg. As an example, I wouldn’t want to be selling shares in equity during down markets to create my income stream (essentially reverses the effect of dollar cost averaging).
Not saying you shouldn’t have growth in your overall plan, but if you have “won the race”, nowhere near as important. Think of it this way, retirement is the longest period of unemployment you will ever experience. While you’re working, your income typically provides your lifestyle. And you’re accumulating. When you’re retired, that income goes away (less pension - if you’re lucky to have one, SS, etc.) You need to focus on replacing enough of your income to satisfy your lifestyle. Generally I find people don’t need as much as they were earning as they weren’t spending it all. They were putting the excess into accumulation. If you’ve accumulated, you don’t need to focus on that.
Whether or not to roll a 401k isn’t the issue. Building a sustainable, income generating plan that meets your future cashflow needs is paramount. Lots of ways to do that. Don’t take on risk that makes you uncomfortable. That will vary per person.
Also, not everyone is planning (or even wants to) leave a big legacy to the kids. Yet I see so many who are focused are not invading principal to meet their income needs. Crazy. Who cares if your nest egg reduces to meet your life style (as long as it is conservatively sustainable)? I’d rather take less risk to earn $X while reducing principal (by a smidge so it lasts a LONG time) than more aggressively investing to earn same $X. What happens in volatile times when the market decides to reduce your principal anyway and you don’t have time to rebuild? Big problem. If the principal goes down over time, so be it, provided I still get my income. Kids get a little less, oh well.
In my personal plan, I purchased a 2nd to die life policy many yrs ago, which will provide the kids a legacy. If they get any remaining assets, great. If not, I’m OK with that.
@shawbridge is that policy of having to go on Medicare at age 65 specific to the companies you own/co own, or because there are less than 50 employees? I am still on DH’s BCBS insurance and am only on Medicare A.
As for the earlier discussion about when to take SS, calculations said I should start collecting it last year so I did. Its either used as play money by me, or I give it to DH to invest. Warning to people about when to start collecting: do it as late in the year as possible if you are starting before age 70, as for the first year you will only get what the amount is in Jan of that year, even if its accruing at .75% each month for the following year. In other words, if you start to collect in November, the amount you get for Nov and Dec will be what SS calculated your amount was in Jan of that year. Only the following Jan will you get the amount that calculated what your amount was inthe month you retired.