Small business employees looking to retire also face high prices for health care options for their next steps in life. What are the best options for small business retirees?
Yahoo Finance Health reporter Anjalee Khemlani appears as part of this week's special coverage of Small Business, Big Opportunities, with helpful insights from a conversation with Director of Health at the Employee Benefits Institute. details how retired employees can deal with medical expenses. Research and Education Program Paul Fronstein.
See more of this week's feature on Yahoo Finance's Small Business: Big Opportunities or watch the entire episode.
This post was written by Nicholas Jacobino
video transcript
For employees of small and medium-sized businesses who are preparing to retire, medical expenses are a high cost to consider. So, with even bigger opportunities available as part of Yahoo Finance's Small Business, what are your options for saving health in the small business world? Every week, our very own Angeli Kamrani will break it down for you. Ann He's right, Josh, unfortunately for small businesses, this employee, the road to retirement is not so easy. Of course, for large employers, we know that, there are many services in place, but on the other hand, small and medium-sized enterprises have more avenues related to what the government has set out. . For example, think about when you get health benefits. Many small employers are looking at AC A on the market and are offering it rather than going through a plan design process that extends into retirement, as companies can't necessarily set up much. I am. In fact, you'll be surprised when you see the price tag. I spoke with Paul Franson and here's what he had to say when signing up for a Medicare Advantage plan. It doesn't cover everything. Also, Medicare His Advantage usually doesn't cover everything. Therefore, you may incur a daily out-of-pocket fee. If you go to the hospital, there may be coinsurance, and there may be copays or coinsurance for medications. There may be a limited network. Such as an HMO, a local network in the area where you live, or a national PPO that offers more options. So these are things to consider and should be considered. , if you're looking for a zero-premium Medicare Advantage plan, what does that mean for your potential out-of-pocket costs if you need medical services? we know. Although it's a Medicare plan, it doesn't cover everything and doesn't cover the benefits of private market Medicare. And in addition to all the benefits of Medicare, we're also now seeing changes in what plan designs offer. We've seen the pressures coming from changes in Medicare. As a result, insurance companies are changing their offerings, which could result in very few offerings in the future. Considering all this, Paul was able to gain a little insight into what's what. There were changes he made that could help with his retirement, so here's what he had to say. We found out by how long you live and how much medical care you use. Well, an 865-year-old couple may need more than $400,000 in savings. Just covering them is an expense. Far more workers have health savings accounts than ever before. Well, this is a lot of stuff and it's very flexible in how you use HS A. Well, the benefit is that his taxes will be tripled. That means contributions are coming in. An increase in an account due to interest or capital gains. Additionally, all distributions of qualified medical expenses are tax-free. There are some things to consider. But there are also trade-offs. If you want to save money with your HS A, it means you'll have to join a high-deductible health plan to make contributions when it comes to health care and retirement. Also, if you use medical services, you need to find a way to pay for those services without tapping HS. A if the objective is to maximize HS A for the future. And this was Paul Franson, director of health benefits research at the Employee Benefits Research Institute. So he was basically explaining that it's an expensive path. In the future, there are new and better ways to prepare if you start in time. thank you very much. appreciate.
