Will my retiree health plan impact my ability to buy a plan through the exchange?
In short, probably not, though you will need to keep in mind things like the timing of open enrollment and the eligibility requirements for subsidies.
Being Eligible for a Retiree Health Plan
If you are about to retire and will be offered/eligible for a retiree health plan when you do, you are welcome to seek out better coverage on or off the exchange if you would prefer. If you do choose to purchase a plan through the exchange and your income falls between 100% and 400% of the national poverty level, you will also be eligible for premium subsidies (also called premium tax credits) to help cover the expense of your plan.
Already Having a Retiree Health Plan
Similarly, those who are already enrolled in a retiree health plan from a former employer can also seek out better coverage on or off the exchange. Many people in this situation will also be eligible for premium subsidies, provided they meet the 100%-400% poverty level requirement mentioned above. However, there is an important exception to this. In some cases, employers give retiring employees access to a special type of account called a health reimbursement arrangement, or HRA. This arrangement is used to reimburse the retiree’s medical expenses, including the purchase of an individual insurance policy either on or off the exchange. Those with access to an HRA are considered to have minimum essential coverage through their employer and as such will be unable to claim premium subsidies if they do choose to purchase a plan through the exchange. Of course, this will not be a problem for anyone looking to purchase a plan off the exchange or who does not fit the income requirement for subsidies in the first place.
Open Enrollment for Exchange Plans
The main thing that retirees need to be aware of when purchasing coverage through the exchange is the annual open enrollment period. Barring special circumstances, one can only enroll in an exchange plan during open enrollment, which runs from November 1st to December 15th in most states. It is possible to qualify for a Special Enrollment Period at other times of the year due to loss of coverage or significant life changes, though these periods do not last forever and may require you to submit some form of documentation for the event that triggered them. Note that while “loss of coverage” is a qualifying event, this only applies to coverage loss that is involuntary. Purposely dropping your retiree health coverage will not trigger a special enrollment period, and you will have to wait until open enrollment if you want to get a plan through the exchange. If you do find yourself temporarily without coverage, a short-term health insurance plan may be a good solution.
Will my spouse’s retiree health plan affect my ability to purchase a plan on the exchange?