Retiree Plans vs. Medicare
What's right for you?
While many companies offer coverage for former employees, that doesn’t mean it’s always your best (or most affordable) option.
If you're over 65 and have access to a retiree health plan, you may be wondering if it’s the best option for your needs. We’re here to help you compare your retiree plan with Medicare so you can make a confident, informed decision.
What is a retiree health plan?
Retiree plans are employer-sponsored health benefits for former employees. These plans vary by company but typically fall into two categories:
- Employer Group Waiver Plans (EGWPs):
- Type of Medicare Advantage plan offered by large companies, unions, or government agencies to their retirees
- Cover the same services as Medicare Parts A and B
- Often have custom networks and benefit structures
- Premiums may be subsidized by your former employer
- Most include prescription drug coverage
- Continuation of Active Employee Coverage:
- You stay on your employer's group plan after retirement
- Typically comes with higher premiums as you’re covering more of the cost
- May or may not coordinate with Medicare
- Not all plans include creditable drug coverage under Medicare rules
Companies That Commonly Offer These Plans:
- Large corporations (like GE, Procter & Gamble, or AT&T)
- Government and public sector employers (such as state agencies and school districts)
- Unions and trade associations
- Higher education institutions
While retiree plans may seem like the simplest option—especially if enrollment is automatic—many retirees don’t realize they have other choices that might serve them better.
Real-Life Scenarios:
Dave, 66 – Lowering His Costs
Dave retired from a Fortune 500 company and was automatically enrolled in its retiree group plan. His premium was $240/month, plus he still had additional out-of-pocket costs for doctor visits and prescriptions.
After exploring his options with a RetireMed advisor, Dave found a Medicare Advantage plan that offered similar coverage—including dental and vision—for $0/month. His doctors were still in-network and he gained extra benefits.
Annual Savings: Over $2,800*
Michael, 67 – Ensuring Coverage for His Spouse
Michael retired from a university system and covered both himself and his wife (age 63) on a retiree plan. His total premium was $720/month. Since his wife wouldn’t qualify for Medicare for two more years, he was unsure how to leave the retiree plan and ensure she had coverage. With guidance from a RetireMed advisor, Michael:
- Switched himself to a Medicare plan
- Enrolled his wife in an individual ACA (Marketplace) health plan, with a lower deductible, until she turns 65 and becomes eligible for Medicare
- Maintained similar coverage for both of them at a lower monthly cost
Annual Savings: Over $3,000*
*Individual results may vary based on personal circumstances. Individuals are encouraged to consult with a licensed advisor to explore their specific options, as plan availability and benefits can vary by region and individual circumstances.
Frequently Asked Questions
Yes, if you’re 65 or older and enrolled in Medicare Parts A and B, you have the option to compare plans and switch during specific enrollment periods.
You won’t lose access to health coverage—but your coverage options, provider networks, prescription benefits, and costs may change. That’s why it’s important to talk through the details with a licensed advisor.
You may have options to keep them covered separately, even if you leave the retiree plan. We can walk you through how that could work.
Not always. But for many, it often provides more flexibility and cost savings. A side-by-side comparison will help determine what works best for you.
Let’s find what works for you.
Many retirees are surprised to learn they’re not locked into their employer’s plan and can switch to Medicare—without losing quality coverage. We’re here to provide clarity, not pressure. Let’s have a conversation and explore what works best for your lifestyle, your budget, and your future.