If you’re among the many Americans contemplating an early retirement, you will need to give your health insurance some consideration if you intend to comply with the new mandat concerning coverage under the Affordable Care Act.
Most men and women age 65 or older will qualify for Medicare coverage. Those that have Part A or Part C plans are in compliance with new requirements under the Act that state all individuals must have comprehensive health coverage or pay a fine. Part B is not enough, however, and must be supplemented by an additional plan that meets the law’s definition of “minimum essential coverage“.
For those who are planning to retire before the age of 65, health insurance will become a priority. Early retirees will need to find adequate coverage until such time as they are eligible for Medicare coverage. For those without their employer-based coverage due to retirement or some other reason for losing a job, you have a few options ahead of you so you aren’t subject to a fine.
Early Retirees Who Need Coverage
Anyone who retires before they are eligible to qualify for Medicare coverage will need to find some type of coverage in the interim. The Health Insurance Marketplace is the first step towards getting a plan that applies under the Affordable Care Act’s mandate for minimum essential coverage.
Finding a plan through the Marketplace provides you with a range of coverage options that can fit any budget and meet any medical needs. With the implementation of the new law, preexisting conditions are no longer an obstacle to finding good, affordable coverage.
Those individuals who had a plan but lost it when their job ended are able to enroll at any time; they need not wait for the open enrollment period to begin. This is because a loss of your employer-sponsored coverage triggers a “qualifying event” in which you can enroll in a new plan through the exchange outside of the established open enrollment period.
Some early retirees may also be eligible to receive discounts and credits towards premiums and out of pocket costs on most plans. Determining that eligibility is based upon your income and size of household. Those who qualify can have their costs reduced across the board. Many individuals can also find additional discounts by exploring Medicaid coverage options.
Retiree Health Benefits
Individuals who have some form of retiree health benefit are already covered under the Affordable Care Act. Therefore, they do not need to seek out an additional or alternative insurance plan in order to avoid being penalized for not having proper coverage. However, if your retiree coverage is inadequate or you would rather get a different plan, then you can look to the Marketplace to find the insurance plan that works best.
Before you make any major changes, it’s important that you’re aware of some of the restrictions you could be facing if you are not enrolled with a retiree benefits plan. Without it, you are ineligible to receive tax credits on your premiums or any other cost reductions based on the amount of your income. If you are eligible for retiree coverage but you have not yet enrolled, then you may qualify for these credits and reductions as determined by your income as well as the size of your household.
Anyone who drops their retiree coverage voluntarily for any reason will not be eligible for a qualifying event. This means you are not able to enroll for a new insurance policy outside of the open enrollment period.
Instead, you will need to wait for the next such opportunity to enroll in a health plan. This could leave you without coverage, which would put you in a position for penalty as a result of not having minimum essential coverage under the Affordable Care Act.
A Few Other Alternatives
If these coverage options don’t suit your needs, you have some additional choices that you may want to consider so that you are properly insured. These are coverage plans that don’t rely on any form of governmental involvement. Many of them may vary in price and availability dependent upon the part of the country in which you are located. Eligibility requirements may also be in place for some of these scenarios.
Direct Primary Care
DPC plans are out of pocket programs in which you pay a flat monthly fee to take care of any primary care medical services for routine visits to your physician. That flat fee allows you to see a doctor when you need one. Your medical costs are more predictable from month to month without being surprised by a large bill down the line. These plans can sometimes be paired with Health Savings Accounts or other forms of high-deductible coverage for essential medical care.
A concierge practice is built upon a group of patients who chip in an annual fee in exchange for exclusive access to a physician. Though it’s designed with high income individuals with mind, the concierge model for care is rather successful.
In essence, it provides members with immediate medical care when they need it and without the hassles of getting referrals or going through complex insurance red tape to get the services they require. There are some drawbacks to this model, mainly with respect to keeping up with the technological advances of the industry as a whole.
Similar in some ways to a concierge service, there are faith-based ministries that act like insurance pools for groups of people who need coverage. In these cases, those people have similar views and beliefs with respect to their religion. They have a common connection to bring them together in order to collect their resources as a whole and everyone who buys in has equal eligibility for coverage and benefits.
Each member chips in even when they are healthy so they have enough money invested in the pool to provide for when they become sick or need medical attention in some other capacity. These arrangements don’t come with any government regulations or complex insurance company statutes which make them appealing.