7 Early Retirement Health Insurance Options to Consider

Whether by design or unforeseen circumstances, you may find yourself without health insurance due to early retirement. Medicare is not available for people under 65 without a qualifying disability, so if you've left a job through which you got health coverage, you should consider alternative options for coverage.

1. Retiree Health Coverage

Many companies and unions offer special health insurance to retiring employees separate from the regular employees' plan. If you're married and opt into retiree health coverage, your spouse may be able to remain on your plan. Check with your employer or union representative about costs, sign-up dates, and eligibility requirements.

2. COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue on your employer's health insurance plan, often at additional cost, for up to 36 months. If your spouse and dependents are covered through you, you will have the option of continuing their health insurance coverage through COBRA.

The size of your employer's company may impact the availability of COBRA. Companies with fewer than twenty employees are not required to provide this option.

If you turn sixty-five and become Medicare-eligible while you are on COBRA, your COBRA benefits will cease.¹

3. Retiree Health Reimbursement Account

A Health Reimbursement Account is an employer-funded account that helps you pay for qualifying medical expenses with pre-tax money, but you can only use it after you retire.

Employers may place money in your retiree HRA while you are an employee. Some employers credit the account upon your retirement with a lump sum payment covering retirement incentives, severance pay, unused sick leave, or unused vacation.

You can use the funds for the type of expenses you can pay with a regular HRA including Medicare Part B premiums once you are eligible.²

4. Spouse's Health Insurance

If your spouse has health insurance, you may be able to join their plan. However, do not assume this coverage is automatic. Employers are not required to make health insurance available to their employees' spouses or domestic partners. Have your spouse check with human resources to determine if this option is available to you.

If you can join your spouse's plan, you will have to do it during your special enrollment period (SEP), which is triggered by the loss of your current employment and health care coverage. The SEP is the timeframe during which you can sign up for new health insurance. You may have to act fast — SEPs may last as little as 30 days.³

5. Health Insurance Marketplace

The federal government and some states provide access to health insurance marketplaces or exchanges where you can shop, compare, and enroll in a health insurance plan. This is typically done during specific annual open enrollment periods. However, the loss of your job and health insurance will trigger a special enrollment period for you when you can enroll in a new plan.

You can also find out if you are eligible for and enroll in Medicaid on the Health Insurance Marketplace website.

6. Medicaid

Medicaid may be an option for those with lower incomes or disabilities. Medicaid is co-run by the state and federal government, so eligibility varies from state to state. To see if you are eligible to receive Medicaid, you can check your state's profile at Medicaid.gov. If you are eligible, you can sign up for Medicaid at any time.

7. Health Savings Account (HSA)

A health savings account (HSA) is a type of savings account that lets you set aside pre-taxable income to use for qualifying medical expenses before or after retirement (unlike the Retirement Health Reimbursement Account, which you can only use post-retirement).

With an HSA you can carry over the funds you have accrued from year to year.

Early retirement has its pros and cons. It may provide you with an unending vacation, or with new opportunities to explore creative and business pursuits. Wherever this new road takes you, healthcare coverage is essential for keeping you safe, healthy, and enjoying life without financial worry.

Managing Healthcare Costs with CareCredit

If you are looking for an option to help manage your medical bills, consider healthcare financing with the CareCredit credit card. The CareCredit card can help you pay for the care you want and need and make payments easy to manage.* Apply today and use our Acceptance Locator to find a provider near you that accepts CareCredit. Continue your wellness journey by downloading the CareCredit Mobile App to manage your account, find a provider on the go, and easily access the Well U hub for more great articles, podcasts, and videos.

Our Expert Reviewer

Patty Caballero and her team of consultants together have more than 35 years of health insurance knowledge working for some of the biggest health insurance companies in the US. She has knowledge in building brands and strategic initiatives to help consumers better understand their health benefits.