Retiree health insurance

DeidreFR5

We have always allowed our full time employees, upon retirement to continue their health and dental insurance indefinately at 100% of the cost. (the benefits is stated this way in a retirement benefit notice given our It has always been refered to as COBRA, but since there is no termination date, it really isn't. Is there any impact this could have on medicare or medicaid benefits? Is there anything else we should consider with this benefit?

The second part of the question is, do we have to end our insurance when retirees become medicare eligible or can we allow them to have double coverage? Thanks.

Hunter1

On behalf of the rest of us taxpayers, Thank you very much! This is, of course, a VERY generous policy to have in place. Do you charge retirees 100% of the group premium, or 100% of an actuarially determined cost for the retired group? The retirees would almost certainly have higher costs than the group of current employees. There would be an impact on Medicare and Medicaid benefits, in that as long as you cover the retirees, your insurance would be primary, and you'll (or your insurer) pay the bills.

At a minimum, you should look into providing only medicare supplemental coverage when your retirees turn 65. Then Medicare will pay first and your plan can pay the remainder of what your plan would have covered. That will save you a considerable amount and not leave the retirees with less coverage than before, although they will deal with coordination of benefits headaches.

irenesmsaclaims

When people retire, it is the same as termination of employment as far as COBRA is concerned. You cannot NOT offer COBRA; so it becomes a choice for retirees of COBRA or retiree coverage under your plan, and your plan must be written this way. You can terminate coverage upon entitlement to Medicare, if it's COBRA or the retiree coverage. If they choose retiree coverage (and waive COBRA), when they are entitled to Medicare, your plan becomes secondary, which is usually a supplement, but not always (i.e., if you offer benefits not covered by Medicare). All of this assumes that your plan is self-funded. You must also consider the dependents of the retired employee; are they covered as well? Just remember, COBRA would not protect them because there is not a qualifying event for them as dependents of retirees.