If you want to take early retirement before age 65, it’s critical that you explore your health care choices. Some employers offer health care benefits to those who retire early, making the search for health coverage more manageable. If you’re retiring early, here’s a list of jobs worth considering.
A financial advisor can help you create a financial plan for your early retirement goals.
3 Types of Jobs That Provide Health Insurance After You Retire
Government Jobs
As a federal employee, you have the opportunity to access health care through the Federal Employee Health Benefits (FEHB) program, provided the following conditions are met:
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You are eligible for an immediate annuity under a retirement system applicable to federal civilian employees.
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You have been consistently enrolled (or covered as a dependent) in one or more FEHB plans for the five-year period prior to the start of your annuity, or for the entire period of service since your first opportunity to enroll (whichever period is less than 5 years).
An immediate annuity means that your regular payments will begin within 30 days of your retirement. Even if you have deferred payments after leaving your job, an annuity received through the Minimum Retirement Age (MRA)+10 rule in the Federal Employees Retirement System (FERS) is still considered immediate.
The word “service” refers to the time you spent in a job where you could receive benefits and the government helped with the costs. You don’t have to be in the same care plan all the time. Times when you were in non-FEHB plans do not count toward the five-year or first opportunity rule unless you were covered by TRICARE – which counts as long as you are still covered by FEHB when you retire.
You can sign up for FEHB within 60 days of first becoming eligible and the government will help you pay for it.
Teaching jobs
Employees in the education sector, such as university employees, have the opportunity to access health insurance after retirement. For example, the University of Michigan offers retiree health benefits based on the average cost of the two most affordable plans, taking enrollment into account. Your retirement date and age determine your maximum contribution, while your health plan choice, Medicare status and level of coverage affect the amount you pay.
If you are an employee of Johns Hopkins University, for example, the university extends medical and dental coverage to eligible retirees and their dependents and matches the benefits received by active employees. JHU’s subsidy is calculated based on your age and years of service.
Part-time jobs
Exploring part-time work in retirement can provide both financial benefits and the added benefit of health care benefits. Many companies understand the importance of offering healthcare options to their employees and are extending these benefits to part-time employees as well. Here are four examples of companies that are prioritizing the health care needs of their part-time workforce:
Costco
In Seattle, Costco employees who work more than 23 hours per week for 180 days are eligible for health care coverage administered by Aetna. Part-time workers also have access to an affordable dental plan that covers preventive care and certain basic procedures, in addition to basic vision care.
Employees can take advantage of an on-site pharmacy for prescription needs, with a separate prescription plan with low co-pays, separate from primary health insurance. The specific details of payroll deductions for health and dental plans are clearly outlined in Costco’s exclusive Rate Benefits Booklet.
UPS
If you are a part-time UPS employee and qualify for TeamstersCare, UPS’s current collective bargaining agreement gives you access to basic health plans that cover preventive medical services, dental services and even a vision plan, all without any personal financial contribution. Unlike other part-time benefits, these plans do not require any deductions from your paycheck. Depending on your role, you may also have the option to enroll in union-operated plans subsidized by UPS, but be sure to check with UPS for the latest information as these options may be subject to change.
REI
Non-exempt individuals who work at REI in Seattle and work approximately 20 hours or more per week are eligible for all health insurance plans REI offers. This includes medical and dental coverage, but it is important to note that the specific coverage amount may vary depending on the plan you select.
Chipotle Mexican Grill
Part-time employees at Chipotle may be able to choose between two medical coverage options. Employees in California typically have more options to choose from.
The first option, called Anthem Preventive Plus, offers lower premiums but provides less comprehensive coverage. The second option, Anthem Hourly PPO, carries higher premiums but offers more comprehensive benefits. Additionally, hourly part-time employees at Chipotle can also consider additional dental and vision coverage, although the precise details of these plans are also private.
Alternatives to employer health care plans after retirement
Many companies do not offer health care benefits to those approaching retirement. If you need to purchase health insurance in retirement, it is essential to explore alternative options that will ensure you have the coverage you need for peace of mind during this important life transition. Here are seven common alternatives to getting health care in early retirement:
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COBRA: Allows continuation of employer-provided coverage for up to 18 months after you leave your job, although costs increase as you pay the full premium.
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Health insurance marketplace: Affordable Care Act (ACA) plans with essential benefits. Enrolling during open enrollment or special periods provides access to standardized and comprehensive coverage options.
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Medicaid: If your income decreases, you may qualify for free or low-cost health care coverage through the federal Medicaid program, with mandatory and possibly additional benefits varying by state.
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Private health insurance: Buy plans directly from insurers or brokers, but without ACA subsidies it can be expensive. This option allows you to create a customized plan, but it does require careful budget consideration.
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Short-term insurance plans: Temporary coverage for gaps before you qualify for Medicare, which provides a short-term solution with fewer benefits compared to comprehensive ACA plans.
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Partner insurance: If your spouse has employer-sponsored coverage, explore options for participating in their plan so that you remain covered through your spouse’s employment.
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Benefits of the membership organization: Some groups, both secular and religious (e.g. AARP, Medi-Share) offer health care coverage and discounts, giving you access to specialized plans through your membership. Be sure to check that the benefits meet ACA standards before enrolling.
Remember to assess each option based on your specific circumstances, taking into account factors such as cost, coverage and eligibility.
In short
Whether your current employer provides post-retirement care, there are still several options worth exploring. Working part-time for a company that provides health care benefits to part-time employees will supplement your income and ensure you have the necessary coverage. If you need further clarification on the choices available or which option best suits your needs, speaking to a financial advisor can help point you in the right direction.
Tips for retirement
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Navigating the potential costs as you save and invest can be challenging. A financial advisor can help you create a customized financial plan tailored to your goals. SmartAsset’s free tool matches you with up to three vetted financial advisors serving your area, and you can have a free introductory meeting with your advisors to decide which one you think is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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Are you unsure about the money required for your pension? Use SmartAsset’s retirement calculator to estimate your required savings so you are prepared for any health care costs that may arise unexpectedly.
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