Health Insurance

What Health Insurance Should You Choose When You Retire?

Retiring early sounds tempting, but it’s important to consider how you’ll manage your healthcare costs if you decide to leave your job.
Nearly half of Americans receive health insurance benefits through their employer, according to a survey. If you leave your employer, you will have to figure out how to pay for your health insurance yourself. Depending on your income, lifestyle and health needs, you can choose from a variety of health insurance plans.

Employer sponsored pension plan

Some employers offer voluntary health insurance plans to outgoing retirees. These plans may be similar to the insurance you had as an active employee. To make health insurance affordable for employees, most employers subsidize approximately 70% to 80% of their active employee health insurance premiums (the amount you pay each month to get coverage).

However, there is no guarantee or requirement that the employer will subsidize the retiree’s plan – which means you may be required to pay 100% of the premium. The average annual premium for an employer-sponsored plan, before employer contributions, is $7,740 for individual coverage and $22,220 for family coverage.


The Consolidated Omnibus Budget Reconciliation Act (COBRA) is federal law. It helps you stay on your employer’s health plan after you leave your job. If you are eligible, you can typically use your existing coverage for 18 months. You can extend coverage for up to 18 months in the event of other qualifying life events, such as B. job loss or death. Health insurance provided by your employer usually ends on the last business day or at the end of the month.
Your covered family members may be eligible for COBRA renewal even if you do not enroll yourself. Your former employer must tell you about your COBRA rights. You have 60 days from the date of your last day of coverage or the date you received your “optional notice” notifying you were eligible (whichever is later) to continue or decline coverage under COBRA.
While you can use COBRA to stay in your employer’s health plan, it will cost you significantly more than if you were an employee. Since your employer is no longer contributing, you must pay the entire monthly contribution yourself.

Health insurance market

The Affordable Care Act (ACA) health insurance exchange lets you get affordable health coverage. It may also be related to previous diseases. All ACA plans are required to provide 10 essential health benefits, including preventive care, mental health services, and prescription drug coverage.

You can enroll in the ACA program by visiting during the annual open enrollment period. If your state has its own health insurance marketplace website, apply through your state’s website. If you lose coverage while working outside of the standard open enrollment period, you can also apply during the special enrollment period.
When you enroll in the ACA Marketplace program, you may receive a premium tax credit based on your income. This can help you pay your monthly insurance premiums or give you a tax advantage when filing your taxes.

Short term insurance plan

Short term insurance offers up to one year of limited coverage with the option to extend it twice (for a total of up to three years of coverage). Coverage of these programs may be minimal. But for this reason, short-term coverage typically costs less than larger health insurance plans, such as those purchased from an employer, the health insurance marketplace, or outright. The average annual premium for short-term health coverage for individual plans is $1,284.

If you need broader coverage, these plans may not be suitable. Many services — including mental health treatment, prescription drugs and lab tests — are not always covered. You may also be denied coverage for a pre-existing medical condition, leaving you responsible for the entire cost.

Health insurance market

The health insurance marketplace is a government program that allows individuals to purchase private insurance.
If you meet income and family size requirements, you may be eligible for tax credits and cost-sharing benefits. These grants can save you a lot of money on premiums and expenses—grants range from $12,880 to $51,520 for eligible single-family households—but the program can get expensive if you don’t qualify for the grant.
You can apply and see if you qualify for a grant by visiting or you can use the calculator to estimate your eligibility

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