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If you’re considering an early retirement, congratulations! You’ve been working and planning for this moment for a long time – but have you considered your health care coverage between retirement and Medicare eligibility?

If you’re retired, Medicare coverage typically begins on the first day of the month you turn 65. But if you retire early, you’ll likely need to bridge the gap with other health insurance options.

Navigating this gap before Medicare eligibility can be challenging. For many early retirees, this often means purchasing private health insurance plans, which can be quite expensive. However, there are plenty of other options worth considering, from spousal coverage to acts like COBRA and ACA.Ìý

We’ll look at some of your choices to help you make sure you have the coverage you need, regardless of when you retire.

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USE IT BEFORE YOU LOSE IT

First, it’s important to ensure you get the most out of your current employer-sponsored health, vision and dental insurance plans before you retire. Try to ensure that you’re caught up on all major medical and dental checkups.

If there are expensive procedures you know you’ll need (common examples include knee and hip replacements), it could be a good idea to use sick leave for those while you’re still working and have robust coverage from your employer. What’s more, you’ll have more flexibility to pivot and adjust your plans if there are complications, developments or unexpected medical expenses compared to after you have already retired.

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EMPLOYER OPTIONS

Most employers no longer offer early retiree insurance – but some still do. Check with your company to find out if it provides health care coverage for its retiring employees.

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COBRA COVERAGE

One of the options your employer may be able to offer you is coverage under the Consolidated Omnibus Budget Reconciliation Act. COBRA allows you to keep your employer-provided health insurance, but you usually need to cover 100% of the cost (employee and employer) plus an additional 2% administrative charge. COBRA coverage is generally available for 18 months, but some exceptions may be available to extend the period.¹

While COBRA is likely among the most expensive health insurance plans, it’s also the only one discussed here that allows you to pay for premiums using Health Savings Account money. So, if you have a large HSA balance, it might be a good choice for you.

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SPOUSAL COVERAGE

If you’re married and your spouse is still working, one of your easiest (and often lowest-cost) options may be to join their plan. Most employers have an open enrollment period during which you can sign up and select your insurance coverage options. Contact your spouse’s benefits department to find out more about spousal coverage for retirees.

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PUBLIC HEALTH INSURANCE MARKETPLACE (ACA SUBSIDIES)

The Affordable Care Act established a public health insurance marketplace to provide options for those who are not yet eligible for Medicare plans. According to the KFF (formerly known as the Kaiser Family Foundation), 24% of those aged 55 to 64 selected public marketplace plans for 2024 enrollment.²

Costs can vary widely, but the public marketplace may be worth investigating if you have a medical situation that may prevent you from getting alternative forms of retiree coverage. (Under ACA, no one can be rejected for coverage, even with preexisting conditions.) More people may qualify for government subsidies through a premium tax credit under the 2022 Inflation Reduction Act.³ To see what plans may be available to you, visit or reach out to your planner for help with your health care options.

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PRIVATE HEALTH INSURANCE COVERAGE

The private marketplace is also an option, albeit likely a more costly one. One possibility is to purchase a high-deductible plan that allows you to set up an HSA. Contributions to the HSA are tax-deductible and can be used for out-of-pocket expenses not covered by the insurance plan.⁴

Once you’re 65 and enrolled in Medicare, you can no longer contribute to the HSA, but you can still withdraw from the account to cover certain premiums and expenses. (The rules get more complicated if you don’t start Medicare until after age 65, so be sure to check the HSA contribution guidelines for your plan.)⁴

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CONSIDER A PART-TIME JOB

Many retirees look to part-time work as a way to keep busy and active in a lower-stress environment. An added benefit? They’re often able to access employer-provided health insurance. Many major retail companies offer coverage to part-time workers, including Starbucks, UPS, Costco, CVS and Staples.⁵ Some professional association memberships also offer coverage options, so that’s another alternative to investigate.

Of course, staying active and fit is a key part of enjoying good health – and that’s the best insurance plan of them all.

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RETIRING EARLY? TALK TO A FINANCIAL PLANNER TODAY

If you're considering early retirement, a financial advisor can help you work through a plan for your situation.

Connect with a planner today.

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¹ U.S. Department of Labor. (2024, September 10). COBRA Continuation Coverage. Retrieved September 19, 2024, from

² KFF. (2024). Marketplace Plan Selections by Age. Retrieved September 19, 2024, from

³ Congressional Research Service. (2024, February 14). Health Insurance Premium Tax Credit and Cost-Sharing Reductions. Retrieved September 19, 2024, from

⁴ U.S. Office of Personnel Management. (2024). FAQs for High Deductible Health Plans, HSA, and HRA. Retrieved September 19, 2024, from .

⁵ U.S. News & World Report. (2023, March 2). 13 Companies Offering Health Insurance to Part-Time Workers. Retrieved September 19, 2024, from