A bankruptcy judge recently approved Delphi Corporation’s reorganization and subsequent request to terminate life and health insurance benefits to many of its retired employees. Benefits could be lost as soon as April 1st for the affected retirees. Former salaried employees will need to explore all available options in order to maintain medical coverage.
Fortunately, many retirees will have guaranteed enrollment options available to them. Those over age 65 will be eligible to apply for a Medicare supplement plan without underwriting taking place by the chosen insurance company. There are no health questions to be asked or answered. This period of guaranteed issue for former Delphi employees will vary between states, but will not last long – usually one to three months. If the open enrollment window is missed, then retirees can be turned down by the insurance company due to poor health.
If former employees choose a Medicare supplement plan to compliment Parts A and B offered by original Medicare, then they will also want to consider prescription Part D coverage. Part D monthly premiums and prescription co-payments will vary between companies, but will lower overall drug costs for Medicare recipients. Retired employees will also be guaranteed eligible for rx coverage.
Employees under the age of 65 who are not eligible for Medicare will need to seek insurance in the individual and family markets. There are several companies that will consider them for coverage, but underwriting will need to take place. United Healthcare, Anthem, Aetna, Assurant, American Community, and Medical Mutual are reputable health providers in Michigan and Ohio where many retirees currently reside. Knowledgeable agents can narrow down available options depending on the needs of the insured.
The need for life insurance typically decreases for retired employees, but still may be a necessity for a number of reasons. Term policies will be most affordable while whole life coverage will cost more. Life insurance, when properly structured, can circumvent federal and state inheritance taxes while also passing income tax free to beneficiaries. If needed, a new life policy will be available for most retirees.
In summary, Delphi workers should work with an agent to determine a reasonable course of action to maintain health and/or life insurance coverage by April 1st. Those over age 65 should have little trouble enrolling as long as they take advantage of the guaranteed issue time period. Those under age 65 will need to pursue plans in the individual and family market if a new employer sponsored plan has not been located.
Category: Medicare Supplements