How to Retire Early with Health Insurance

Some early retirees worry about their employer-sponsored health insurance plan. There are various ways to start your retirement life and still have affordable health insurance. In today's article, we will tell you how to retire early from your 9-5 desk job with health insurance.

Employer Health Insurance

A recent study found that over 25% of companies in the U.S with 150-200 employees offer health insurance plans to early retirees. Therefore, it is essential to check with your company’s HR or accounts department.

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If your company offers such a plan, they will cover your premium even after you have left the working life. You can also sign up as dependent on your husband or wife's employer-based health plan.

Federal Exchange

In most situations, your employer will cover your premiums. However, if the company does not offer a health plan, you can apply for a federal exchange program via healthcare.gov website. Leaving your current employer provides you with an opportunity to have a health insurance plan through the federal exchange program.

The "Obamacare" or Affordable act has made the marketplace possible. However, there are some plans, which carry increased premiums that is over $1,000 per month. Therefore, you need to shop around and find a plan that best fits your financial needs. However, an insurance firm on the federal exchange won't increase your premiums or deny your coverage due to any pre-existing conditions.

COBRA Health Insurance

COBRA is an excellent opportunity for early retirees who want to sustain their employee benefits for some time. COBRA offers employees to hold onto their benefits for up to 1.5 years after their retirement. Remember, this benefit applies to workers from large companies.

Also, COBRA wants to let you know that you will be responsible for the entire premium. Your employer will cover the most for you, and if you think the plan offers quality care, you must consider it.

Health Savings Account

Many early retirees open health savings accounts or HSAs to invest in their health. If you want to open an HSA account, you must enroll in HDHP (high-deductible health plan) offered by several employees. So, make sure you check it with your company or read your employee manual to figure it out.

Remember, a health savings account offers you a triple tax benefit, and you will contribute to the account with pre-tax money. Thus, it decreases your taxable income. At the same time, your investment earnings will grow tax-free.

Private Health Insurance

Last but not least, many early retirees go for the option of private health insurance because they are not satisfied with the federal exchange program and COBRA. You can find a large number of private insurance companies online.

Make a list of those companies and analyze their offerings. Make a comparison table to check for the perks, such as low-interest rate, quality care, and affordable prices. Talk to a health insurance agent who will help you find a policy based on your specific needs.

Final Words

An early retirement is a good option when you have enough money to live a comfortable life. If you want to retire early with health insurance, you must check the health coverage options as mentioned in the article.

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Thomas Moore the a Expert Financial Author with Cash King Thomas Moore is a proud American with a Bachelors Degree in Business Administration from the University of San Diego. He has been in the financial industry since 2007 holding numerous licenses in multiple states. He currently helps operate cashkingco.com and our resident expert on all things finance. LinkedIn Profile