Cuts in school district budgets have made healthcare options less favorable to spouses and children, so it is worth evaluating alternate coverage options for your loved ones.
If you have not yet reached age 65 and thus qualified for Medicare, upon your retirement you may qualify for STRS health benefits if you have at least 15 years of service. Upon reaching this qualification, STRS will subsidize your individual monthly healthcare premium at the 2012 rate of 2.4% for each year of service credit, up to a maximum of 72%.
This subsidy is changing, however. Starting in 2013 and ending in 2015, the subsidy rate will decrease by 0.1% per year. In 2015, your new subsidy will be 2.1% with a maximum of only 63% of your healthcare premiums. Spouses and dependent children of qualified retirees (15+ years of service) are eligible to join the STRS healthcare plan, but must pay full premiums. These changes can drastically increase your out-of-pocket premiums and can consume your retirement assets quickly if proper planning is not taken. The bottom line: In order to keep healthcare coverage costs in check during the “gap years” to age 65, it makes sense to explore alternate coverage options for your loved ones and maybe even yourself depending on your years of service.