What Happens If An Employer Discontinues Retiree’s Health Insurance Plan?
Kaiser Health News recently answered readers’ questions about the Affordable Care Act and the federal Marketplace exchange, which has caused a lot of confusion for folks. Here’s an excerpt From: http://www.kaiserhealthnews.org/Stories/2014/May/20/Andrews-IYH.aspx?p=1
Q: I will be retiring this year from my company, before age 65. My company is dropping retiree health care in January, stating that retirees younger than 65 can elect coverage through the exchanges. Will the company be required to offer COBRA starting in January? I fear that coverage will be expensive through the exchanges since we will not be eligible for any subsidies due to my husband’s $200,000 income. He’s self-employed and covered under my company’s health plan.
A: In general, if an employer discontinues its retiree plan, it’s not required to offer retirees the opportunity to extend their coverage for up to 18 months under the federal law known as COBRA, according to a Treasury Department official. The cancellation of your retiree plan will create a special enrollment opportunity for you to sign up for a plan on the health insurance exchanges. You won’t need the special sign-up period; however, since January is midway through the annual open enrollment period that runs from Nov. 15 through Feb. 15 when people can change plans anyway.
As you note, you won’t be eligible for subsidized coverage on the exchange because your husband’s income exceeds 400 percent of the federal poverty level ($62,920 for a couple next year). But it’s worth checking out plans on the marketplace anyway, says Laurel Lucia, a policy analyst at the Center for Labor Research and Education at the University of California, Berkeley. Depending on your health needs, a marketplace plan might be a better fit. “The typical job-based plan resembles a gold or platinum marketplace plan, but on the marketplace they’d have the option of buying silver and bronze level plans as well,” she says. Many individuals find the costs of Marketplace plans are much more affordable than COBRA plan rates.
