Retiree coverage is a separate promise, and it should be designed like one.
Most retiree programs began as active coverage that someone kept after they stopped working. That leaves eligibility, cost sharing and Medicare coordination decided by default. We help employers who offer retiree coverage set each of those on purpose, with the long-term cost in view.
Four decisions define a retiree program. Most employers made them by accident.
Each one changes cost, the retiree’s experience and the liability you carry.
Who Qualifies
Eligibility tied to age and service decides how many people the promise reaches and how early. Small changes to the rule move the cost a long way, which is why we model them before anyone writes a policy. Eligibility rules drive the cost of retiree benefits.
Pre-65 and Post-65 as Two Programs
Retirees under 65 need primary coverage; retirees on Medicare need a plan that pays second. Treating them as one group prices both badly, so we design them separately. Separate pre-65 and post-65 designs price retiree coverage accurately. Each needs its own design.
What the Employer Pays
A percentage of premium grows with every renewal. A defined-dollar contribution fixes the employer’s share and makes the promise predictable, which is why it is usually the first lever we test. Defined-dollar contributions make retiree benefits predictable. Test this lever first.
The Right to Change It
Whether you can amend or end retiree coverage depends on plan documents, bargaining agreements and what retirees were told. Counsel decides that question, and we make sure the documents are reviewed before any change is announced. Legal review protects retiree benefit changes.
Leaving retirees inside the active plan hides their cost in everyone’s rate.
When retirees are pooled with active employees, the blended rate spreads their claims across the whole plan. That is a cost too, even though nobody receives an invoice for it.
The Hidden Subsidy
An older pre-65 retiree blended into active rates pays the same premium as a young employee. The difference is carried by the plan, and for public employers it is part of what the actuary has to value. Separating retiree costs shows the true cost of retiree coverage.
A Retiree-Only Plan
A plan that covers retirees rather than active employees sits outside the ACA market reforms, which opens design options the active plan cannot use. Counsel confirms the structure before it is built. Retiree-only plans open more design flexibility. Counsel confirms the structure.
Coverage Built Around Medicare
Retirees on Medicare can move to a group plan designed to pay after Medicare. That changes both the retiree’s experience and the cost, so we compare options on your actual retiree census. Medicare-based group plans can improve retiree coverage and cost.
A retiree cannot walk down the hall to HR, so the program has to explain itself.
Retirees contact the plan less often and usually at harder moments. We build communication and support around that.
Before Retirement
The best time to explain retiree coverage and Medicare is before the last day of work. We meet with retiring employees, so their enrollment windows are planned rather than missed. Pre-retirement planning helps retirees avoid missed enrollment windows for retiree coverage and Medicare.
At 65
The move from pre-65 to post-65 coverage is where retirees fall through. We track birthdays and send each person their steps in advance, because a missed Part B enrollment becomes a gap the retiree plan may not fill. Tracking 65th birthdays protects retiree coverage.
Year to Year
Retirees need a phone number that answers. Their questions come to our team rather than to HR, which is why the program keeps working after the person who designed it has moved on. Dedicated support keeps retiree programs working long after the person who designed them has moved on.
What employers ask about retiree coverage.
Should we stop offering retiree coverage?
Sometimes the better answer is to redesign it rather than end it. We lay out the options, and any change to a promise already made goes through counsel first. Redesign can be a better answer than ending retiree coverage. Options come first.
Do retirees need Medicare Part B?
A retiree plan designed to pay second usually assumes Part B is in place. The plan terms decide how it coordinates, so we check them before retirees are told anything. Part B assumptions shape retiree plan coordination. Check plan terms first.
Is retiree coverage only for large employers?
No. Smaller employers with long-tenured workforces offer it too. The design questions are the same; what changes is how the cost is funded and who carries the risk. Retiree coverage can work for smaller employers too. Funding is the difference.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
COBRA Continuation Coverage (29 U.S.C. 1161)
Requires many group health plans to offer temporary continuation coverage after a qualifying event.
Affordable Care Act (Public Law 111-148)
The 2010 health reform law, with later amendments, behind employer coverage, reporting and market rules.
More guides on this topic.
Medicare Section 111 Reporting for Group Health Plans
Section 111 requires insurers and plan administrators to report to CMS every Medicare beneficiary covered under a group health plan, so Medicare knows whether the plan pays first.
Employer Group Waiver Plans (EGWPs) for Retiree Medicare Coverage
Employers that offer retiree coverage can use Medicare Advantage or Part D plans built just for their retirees.
Retiree Health Benefits: Accounting, Funding and Tax Basics
Retiree health commitments can appear as liabilities and have tax consequences.
Retiree Health Benefits: Confirming the Right to Change
Announcing a change first and checking later is hard to undo.
Retiree Health Benefits, Age Rules and Medicare Coordination
Retiree plans often differ for people who are Medicare-eligible.
Group Medicare Advantage for Retirees: Employer Guide
Group Medicare arrangements can lower cost for employers and retirees, but they change networks and rules.
Retiree Health Benefits: Handbooks and Retirement Communications
Retirees remember what they were told at retirement. Loose words in a handbook or packet can be quoted for decades, so here is how to review and rewrite them.
Retiree Health Benefits in Individual Agreements and Severance
A plan may reserve the right to change retiree coverage while an individual agreement promises something else.
Humana Whole Person Care for Group Medicare Retirees
Humana describes whole person care for retirees on group Medicare, written for employers and plan sponsors.
Humana Go365 for Medicare and Medicaid
This version of Go365 is offered to eligible members of certain Humana government-program plans.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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