Recently, I was spending time with a family member who is currently a teacher. She was telling me that she was on a Teacher Retiree Health Plan and she couldn’t figure out what to do with her Medicare decision.
Many people on retiree plans feel like they are the best because they’ve been on them for years or on some type of health insurance through their employer.
The bottom line is some of these plans are best for you and some are not.
Choosing between Medicare or your retiree plan is confusing and incredibly complicated.
Typically, employee plans have taken excellent care of you over the years. Due to this, people assume that because it’s worked in the past, it will work once they’re on Medicare. Again, this is not always the case.
Just the other day I was speaking with Rose. Rose is a teacher and she and her husband are on her teacher retiree plan. However, she was recently told that the plans rules and changes are going to cost them thousands of dollars. If Rose had realized how her retiree plan worked with Medicare in the beginning, she would have made a very different decision.
When deciding if you are better off staying on your retiree plan or joining Medicare, you MUST answer these 3 questions:
- What are you paying to remain in the retiree plan and what does that cover?
- Are you required to be on certain parts of Medicare to stay on the retiree plan?
- If you decide to leave the retiree plan, will you qualify for a Special Enrollment Period?
These three questions will help you understand how your retiree plan will work with Medicare and they provide key factors for you when comparing it.
We’ve had a client who didn’t realize that her corporate retiree plan required her to be on certain parts of Medicare. Now that she has been told, it’s costing her hundreds of dollars of Medicare penalties a month to fix it.
As expected, the employers are trying to save money and many times retiree healthcare seems to be an easy place to make cuts. For that reason, you might not have the best options on your retiree plan. The good news is, you can still join Medicare.
My advice to you is this: do not assume that your retiree plan is best for you. Go through your retiree plan details when you’re 64 so you know the answer to the three essential questions above to get you to your best choice.
