Look into FHA. I found money there I didn't know I had.
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When FHA benefit funds are used for IBM retiree medical premiums, are the funds taxable?
The sad part of the FHA and pension funds is that for both, the interest they earned was Tbilisi+1%, in these crazy times since 2008 interest rates have been way below historic levels so the money did not grow like it typically would have, 1-2% a year yuck
So, I am not 65. I will take the IBM insurance for the year. Are you saying that if my husband is covered by insurance at another job I can stop using the FHA and pick it up again when I retire? What if I get a new job with insurance? Is that considered "continuously insured" or just if it's IBM COBRA coverage?
You can find the amount you have in the FHA in Net Benefits - hard to find, but it is there.
Once when talking to a Money Smart coach they told me that the FHA was a "gift" from IBM and IBM can pull it out from under us any time they want. (It is not guaranteed) They said most people use the FHA up as soon as they (so nothing there if IBM decides to cancel it). They also suggested leaving a little money in the FHA account so that you can come back to an IBM plan if one turns out to be cheaper than what you currently have. If you drain the FHA to zero you can never get back in.
Anyone out there hear something similar with regards to the FHA?
I also had never heard of this
"Take the FHA till 65 and medicare. (NOTE once you make medicare your Remaining FHA goes to a flex spending account where you just have to submit receipts, but still get to spend it down) "
Thanks for sharing it.
Approx 1200-1400 per month depending on which plan you have selected
Anyone have a feel for what COBRA will cost for a married couple ?
1ifj. You do not have to take cobra. You can go directly to FHA if you choose Remember the FHA is at IBM retiree cost plus the Profit IBM builds into the retiree healthcare. (It’s usually around 80%)
I would recommend going like this
- Take the one year of IBM employee cost healthcare. (450-600 per month coverage)
- Take the one year of Cobra if you have no other choice as it’s IBM cost plus 2%
- Take the FHA till 65 and medicare. (NOTE once you make medicare your Remaining FHA goes to a flex spending account where you just have to submit receipts, but still get to spend it down)
Wondering why the FHA can't be used towards the Cobra subsidy? Wondering why eligible retirees are being forced to take Cobra first or seek coverage elsewhere and forfeit the FHA. 62 years old - after 12 months, FIdelity quoted $1800 a month for my spouse and dependents. Really unfair. Would be nice to close the gap between 62 and 65 without wiping out a chunk of my 401k. IBM truly does not want anyone to use the FHA.
The FHA was part of the PPA retirement change charade in the 90s. Both were supposed to grow and replace the original pension plan and fund medical benefits. IBM goes out of their way to hide information about the FHA including links to see what the balance is. It’s almost as if they do not want you to know about this or are hoping you would forget.
You need to understand what FHA will pay for. If under 65, you can only buy full price insurance. Here is my example.
Current plan High Ded with HSA, 3 people, cost $300.
Using FHA after retirement same plan $2200.
You can't use if for Cobra or for outside cheap insurance and you have to be continuously covered. If your spouse has coverage you can switch to that, then switch back to IBM and use FHA then, if you never dropped coverage.