Employee Medical Benefits Post Resignation or Retirement: Navigating Your Options

The Importance of Medical Benefits Post Resignation or Retirement

Employee medical benefits are a crucial component of job security and overall well-being. However, the question often arises: what happens to these benefits when an employee leaves their job, whether through resignation or retirement? Understanding the conditions under which medical benefits can be continued is vital for employees making career decisions.

Continuing Group Insurance After Resignation or Retirement in the U.S.

In the United States, eligible former employees may continue their previous group insurance for up to 18 months, provided they pay the premiums. This coverage is typically governed by the Consolidated Omnibus Budget Reconciliation Act (COBRA). However, certain exceptions, such as company bankruptcy, may affect employees' ability to continue coverage through COBRA.

Trade union contracts can also provide specific benefits post-retirement. My parents had this as part of my father's retirement package, ensuring continued healthcare coverage. When my mother passed away, the medical bill for services and amenities amounted to $50, highlighting the importance of continued coverage.

Porting Group Policy to Individual Coverage

For those fortunate enough to work within certain organizations, there may be provisions allowing individuals to port their group policy to an individual policy with the same company that provided the group insurance. This can be particularly beneficial, as it includes credits for the time one was part of the group, extending the duration and benefits of coverage.

Employee Health Coverage Before and After Leaving the Company

Generally, employees covered under a company's group health insurance scheme lose the benefits upon resignation or termination. However, some private companies offer limited coverage to spouses for a certain period after retirement. My employer, Zensar Limited, extends health cover after retirement as part of the superannuation scheme, but this is a rare exception.

Zensar Limited provides health coverage for employees who retire at 58, with a yearly coverage of Rs. 3 lakh. This coverage is cashless, with no sublimits or caps, and continues until the employee is 80 years old. Despite the limited coverage, it remains a significant benefit, especially in case of hospitalization. If either spouse is hospitalized, the coverage ensures a combined limit of up to Rs. 18 lakhs for one spouse and Rs. 5 lakhs for the other, subtracting any amount used from the initial Rs. 10 lakh top-up plan.

Dependence on Employer's Health Cover Scheme

These examples underscore the necessity of not relying solely on employer-provided health coverage. Ensuring alternative health insurance options is crucial for maintaining long-term medical security.

Therefore, it is essential for employees to understand the specific conditions that determine whether medical benefits can be continued post-resignation or retirement. Whether through COBRA, union-provided benefits, porting policies, or employer-provided extensions, making informed decisions about healthcare coverage is imperative for a smooth transition during and after a career change.