Group Retiree Health plans can reduce out-of-pocket healthcare costs for those ages 65+.
In today’s era of job-hopping and quiet quitting – the phenomenon where employees remain at their jobs but don’t perform at their highest level – enticing employees to stay engaged is more important than ever.
The FIRE movement, or Financial Independence, Retire Early, is leading more individuals to live frugally, plan ahead, and leave their jobs in their 30s, 40s or early 50s – well below the average retirement age.
For employers desperate to keep good employees in the workforce – and in their companies – it’s crucial to evaluate your healthcare insurance, disability insurance, paid family leave and ancillary benefits. But you should also think about retirement benefits, including a Group Retiree Health plan, as important recruiting and retention tools.
Think about it this way: Health care costs account for 15% of the average woman’s retiree’s income and 9% of the average man’s retirement income, according to a study by the Center for Retirement Research at Boston College. A portion of these costs come from paying for Medicare Part B and Part D premiums, Forbes reported. Average Part B premiums cost more than $170 per month in 2022 but can go as high as $538 for high-earning retirees. Part B also requires a 20% coinsurance payment.
Who Will a Group Retiree Health Plan Benefit the Most?
If you’re an insurance broker looking to write Group Retiree Health as part of a benefits package that includes short-term disability, private Paid Family and Medical Leave, and ancillary benefits, it’s important to remind your clients that company owners and the c-suite – who are often closer to retirement age than mid-level employees – will stand to save the most from a Group Retiree Health plan. After all, their out-of-pocket healthcare costs, just based on Medicare premiums, could be more than double the average employee.
Providing Group Retiree Health Benefits, which can cover copays, deductibles, and coinsurance, can entice employees at every level to stay with your company until they ready to retire and – perhaps more importantly – until they are ready for Medicare at age 65. A good benefits package is no substitute for a positive company culture, clear direction, and room for advancement. But for future-focused employees thinking about how they might pay for retirement, it can sweeten the deal.
What You Should Know About Group Retiree Health Benefits
Fully insured group retiree health benefits have no network requirements, which means that beneficiaries can receive treatment from any healthcare provider that accepts Medicare. No medical exam is required, and no medical questions are asked. The DBL Center can write Guaranteed Issue coverage for any retiree and their spouse over the age of 65 enrolled in Medicare A and b
Retirees can begin coverage any time of the year with a qualifying Medicare event.
Coverage may include deductibles, co-pays, and co-insurance, as well as prescription drugs. Plans are available where the retiree pays the premiums, the company pays the premium, or they can share the costs, with employers paying a flat rate or anywhere from 0% to 100% of the premium.
Your clients can opt to include ancillary coverage like vision, hearing, chiropractic, acupuncture, and physical exams as part of the plan. Some programs also provide gym access or at-home fitness tools and resources to plan members.
Who Are Group Retiree Health Plans Best For?
If you have clients who are currently providing retiree healthcare coverage but looking to reduce costs, switching to a GRH plan that works with Medicare coverage could be the solution. Likewise, if you have clients in industries such as manufacturing, financial services, universities, hospitals, utilities, public entities and even the insurance industry, GRH plans can help reduce their costs. These industries tend to have large numbers of retirees and employees close to retirement.
According to the U.S. Department of Labor, employers can shift, reduce, or terminate health benefits at any time. However, switching to a group retiree health plan can reduce costs while maintaining good relations. This is especially important for publicly held companies whose value can be swayed by negative media attention.
Group retiree health plans provide a balance that helps organizations control costs while providing coverage to retirees and offering those close to retirement peace-of-mind that their insurance benefits may cover some significant expenses in their later years.
The DBL Center has the resources and carrier relationships to help you write the best Group Retiree Health plans so your clients can provide the full benefits package expected by employees today. Meanwhile, as a DBL Center broker, you can expand your book of business and commissions with new and existing clients.