Selecting a Retiree Benefit Plan: How Do You Choose?

Amanda Shaw, Chief Marketing Officer, ARTA

Retirees in Canada are lucky — when it comes to finding a benefit plan to support your health ageing, there are more choices than ever. But with so many options to choose from, it can be overwhelming. How can you select the plan that’s best for you?

Consider Your Personal Health Needs

Do you know what you’re currently spending on extended health care and dental care services, if you had to pay out of pocket? If not, try downloading a report of your claims from your employer-sponsored benefit plan. Also, ask your pharmacist for a print statement of all the prescriptions you had filled in the most recent calendar year — it should list what was covered by your benefit plan, what your copay was, and any administrative fees. Ask your dentist for a similar statement. Calculate what the total cost is across all these sources so that when you compare plans, you can determine what an adequate coverage level is for your needs. You don’t want to be under-covered, but you also don’t want to pay extra premiums for coverage you won’t use.

Do Your Research

Many benefit plan options publish competitor comparison charts, but be wary when using these to make your decision. ARTA has seen our own information become wildly distorted by competitors to create a more favourable comparison for themselves. It’s best to get plan details from each relevant organization and make a direct comparison. This also allows you to focus on the categories that are most important to you, as dictated by your health needs and plans for retirement.

Download the plan booklet, if available, to review the detailed plan provisions. Pay particular attention to the exclusions. Many providers do not make their detailed plan information available until you enrol in the plan — be wary of plans that do not include their plan details and contract provisions for your review prior to enrolling in the program.

Review Reasonable & Customary Amounts, and Inside Limits

Plans offer varying amounts of coverage (typically 80% coverage or 100% coverage). And while it seems apparent that 100% coverage is better, pay attention to “reasonable & customary allowed amounts” (common with paramedical service providers such as massage therapists, chiropractors, and physiotherapists), and “inside limits” (common with dental).

Here’s an example of coverage for a massage that costs $110 for 60 minutes:

While competitor A offers a lower percentage of coverage, they actually pay out more of the cost because they have higher reasonable and customary rates. Similarly, review inside limits on dental coverage — while a plan may offer 100% coverage, they might only allow for so many visits, or so many dental services in a calendar year. Also be sure to review what is covered under each of the maximums. For example, some plans cover things like diabetic supplies under their prescription drugs maximum, whereas others have a separate maximum for these items.

Understand Travel Clauses

If you’re considering an extended health care benefit plan that includes emergency travel insurance, be sure to understand the limitations that come with “clauses.” Does the provider automatically terminate coverage at a certain age? Do you want to put yourself in a position where you’re still willing and able to travel at age 86, but can’t afford to because you now must pay out of pocket for expensive standalone coverage? What limitations do the options have around pre-existing conditions and stability clauses? A stability clause could be a factor, even if you’re in better health and are deprescribed a medication. Despite being healthier, that change in medical condition could now invalidate your travel coverage. It’s also important to check to see if the stability timeframe changes as you age.

When Your Health Needs Change

The coverage you need when you retire may not be the same as the coverage you need next year, in five years, ten years, or twenty. How easy is it to change coverage as you need it? For example, if you have great teeth now, can you add dental coverage later? Once you turn 65 and the Alberta Coverage for Seniors Program becomes first payor for most of your prescription drugs, can you adjust your plan to an option that offers lower prescription drug coverage at a lower premium cost? Check to see if you can increase coverage to a more comprehensive plan, if needed. You may also want to research whether you are “locked in” to coverage for a period of time before you can make plan changes.

Talk to Someone!

Our biggest advocates are our members — if you know other retirees, ask them who they chose coverage with, and why. And if you need help understanding all the fine print, talk to an ARTA member service administrator. Our mission is to help retirees live an active and engaged lifestyle in retirement and we truly want to help you find the plan that is best for you and your lifestyle — even if that plan is with one of our competitors.

Amanda is the Chief Marketing Officer for ARTA. She holds a commerce degree with a focus in marketing from the University of Alberta and a CAAP accreditation from the Institute of Communications Agencies.