# Going part time for 10 yrs, then done at 55.... health benefits?



## Petee_C (Jan 13, 2017)

Hi all,

Newb here.

Last year in the summer we met with our financial advisor from MD Management to discuss what life would look like if I went part time (3 days a week) for the next 10 yrs or so. I don't have the exact numbers, but we have saved all our adult lives in RRSPs, non-RRSP's and my wife has an extensive TD Waterhouse portfolio. I have 17+ years fulltime contributions in HOOPP, and my wife has probably 12+ FT years in HOOPP plus probably 5+yrs with part time contributions to HOOPP. We have a rental home that is paid for, and it grosses about $22,000/yr in rent. We have another rental property that probably grosses $4-5000/yr in rent.

It looks like we have enough already to retire with $6,000 (today's money)/month after 55 with our DB pension, and our portfoilio at 3% growth. I believe we may be able to draw more per month, but he asked if $6,000/month seemed adequate..... 

I'd like to go part time ASAP (need management to agree), and wondering if anyone has insight into how much they pay for HC benefits. At the hospital that I am at, we have really good family (wife plus 11yo and 14yo) benefits through manulife. I looked on the last pay stub from December 2016, and I got these numbers

LTD me: $251 work: $2267
Extended me $639 work $1919
Dental me$270 work$810.

Not sure if I need LTD if going part time.... The extended and dental are something I would like to continue. Looks like my plan cost$3638/yr.... I'm guessing based on this, Benefits coverage would cost me and my wife about $300/month

*Any comments on the "Follow-me" plan from Manulife?* I've phoned for a quote, but the package will take a couple weeks to arrive....

Just doing my research.....

My 'boss' says 2018 is when she would consider it, and that's what I am ramping up for.... Next Career---- "kept man".....


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## OptsyEagle (Nov 29, 2009)

The Follow Me plan will end up being something higher then what you have been spending on medical/dental expenses. That is so that Manulife can obtain a nice profit and pay for all their advertising. If it didn't cost more, how would they do that? Your work plans are different. Your employer will undoubtedly be paying for some of it and is why it appears to be a great deal that everyone should have.

Anyway, check it out but by the time you see the premium and/or the benefits with their maximum payouts, I think you will see what I mean.

If you have an employer to pay for some of the benefits, they are a great idea. If you do not, using an insurance company does not reduce the price of the services, but ends up increasing them to pay for that companies profits and marketing expenses. So, if you do not have a generous employer you are on your own. That will be your cheapest route.


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## OptsyEagle (Nov 29, 2009)

No you do not need LTD. LTD is for people who would be financially destroyed if they lost their income due to a disability. You sound like you have your income already covered in other ways, so if this is the case, you might as well go with the higher odds that you will end up just paying premiums and never collect on it. That is the bet the insurance company is making because it is the one with the better odds...and they know the odds. If you or your family are dependant on your income then it is a bet you cannot make and you would therefore need this coverage.


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## birdman (Feb 12, 2013)

OptsyEagle;.
If you have an employer to pay for some of the benefits said:


> Couldn't agree more and generally speaking the amount paid out in claims for all insurance is small compared to the premium income. Unfortunately, insurance is required for things like your home, auto, etc but I try to avoid it like the plague. I self insure as far as possible and it has saved me thousands over then years.


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## ian (Jun 18, 2016)

The LTD number seems really high. You might want to check to see if there is something else included in the number. Some employers provide an yearly analysis of benefits broken down by the cost to ee and employer paid. You might have this with your t4 data. Could it include some life insurance?

I had the option of Manulife follow me. It was about $300. month four plus years ago which seemed high to me. I declined since as part of my retirement package my employer provides us with catastrophic medical coverage. When I looked at the Follow Me plan two things stood out. Dental was not great. As I recall, the coverage for major events such as root canals was limited to 50 percent, to a max of $1500. year. Vision was $200 but only once every two years. We decided at that price would self insure. So far, so good. Drugs can be a big issue...you could always look at a blue cross prescription plan.


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## Petee_C (Jan 13, 2017)

So you are saying my employer is paying extra per worker other than what is listed on my paystub? 

Definitely need dental and prescription coverage.... I have a lot of money in my mouth, and my wife has rheumatoid arthritis..... 

No to LTD....


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## ian (Jun 18, 2016)

I do not know how much your LTD premiums are. Many unions negotiators and firms choose to de select LTD as a company paid option/benefit. The reason is that the premiums are low and the money can be used for other benefits.

IF the employee pays LTD premiums, then any subsequent claims and monies paid are non taxable. If the employer pays the premium as a benefit, then any subsequent claims paid are considered taxable income. This is my understanding. 

My sister was on LTD for several years. Fortunately, her employer and her collective agreement (she was a teacher) was such that she paid the LTD. The premiums were very low. As a result, she did not have to include the LTD insurance payments in her taxable income for the years that she collected these benefits from the insurance company.

I have no doubt that your employer can provide a complete breakdown of you employer benefits and the employee and employer paid amounts for those benefits. Just ask.


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## OptsyEagle (Nov 29, 2009)

All group benefits mandate that your employer pays a portion of the costs. Usually between 50% to 100%. That is because the group insurance companies know that if your employer did not pay at least 50%, all the employees would demand to opt out of it. It would be unsustainable.

Well, that is what the Manulife personal coverage is. A group plan without an employer. Good luck making that beneficial. It is sold to people who don't understand how it all works. They leave a plan they liked and automatically buy another plan and think they will like it the same. Either they never figure out that they are paying Manulife much more then they would pay their Dentist and Pharmacists, in almost all years going forward, or they do not realize that significantly less then what they paid last year to their Dentist or Pharmacist, will not be paid back to them, due to exclusions and limitations, etc., etc., etc. found within their new individual plan.

It's a law of money physics. The insurance companies do not have a money tree. Someone has to pay more then they claim to cover the entire cost of these plans (claims, plus Manulife administration expenses and profits).

Just because you would like to find someone else to pay your medical expenses, it doesn't mean that you will succeed in doing so...especially when dealing with an entity that has been doing this as long as Manulife.


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## ian (Jun 18, 2016)

Absolutely. 

The medical, dental, and vision benefits that we enjoyed under my former employer'ss Manulife coverage were SIGNIFICANTLY better than the benefits proposed in either of the so called 'follow me' plans that were offered to me at retirement time. Plus, the' follow me' plan, as I recall, even had some fairly limiting maximum caps. For us, given our health, the plan was outrageously expensive. 

We did the math at the time and thought it was a poor offer. Looking in the rear view mirror it was even worse than we thought based on our health care expenditures over four plus years. I guess it depends on your health. I have no doubt that the largest percentage of those picking up the policy have or anticipate having health issues. Hence the average per person cost of the plan goes up. Only you can tell if it is good for you.


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## sags (May 15, 2010)

One of the biggest benefits to group benefits is that they don't normally require medicals or a medical history.

It is often the case that a choice must be made to opt in or out, and once that choice is made it can't be reversed.

In the future a medical examination and history may be required and the insurance companies may deny coverage.

I suspect with a HOOPP employer, the full time and part time employees have separate contracts and the benefits can differ widely.

At many employers, the part time employees receive a small increase in pay "in lieu of benefits".


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## Petee_C (Jan 13, 2017)

Found some details on the follow me plan. Not that good of a deal. We need coverage for some expensive meds. I will continue research. The drug company does have some patient assistance, so we'll explore that as well..... 

Lot of things to line up,before making the switch to semi retired..... 

Peter


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## carverman (Nov 8, 2010)

Petee_C said:


> So you are saying my employer is paying extra per worker other than what is listed on my paystub?
> 
> Definitely need dental and prescription coverage.... I* have a lot of money in my mouth, and my wife has rheumatoid arthritis*.....
> 
> No to LTD....


I looked into this Manulife "follow me"plan...it is not the same as group insurance through employers.
The coverage for dental is VERY LIMITED for what you are paying for, and capped for the first 2 years to a $limit *basically equivalent to just under the premiums you would have paid them*. 

On top of that, they only cover upto 80% on dental such as cleaning, xray and small filings. 
Crowns, root canals, partials and other expensive dental such as IMPLANTS are NOT covered.

I decided that if I had to pay them a significant monthly premium (over $120 at the time a few years ago for
my age group (60-65), I was probably better off just to pay the dentist directly, and claim it on my tax return.

Last year my dental over several visits was over $3K. A couple years before that, I had an implant that
cost me $4K. Also a new partial $1700. Had I gone with their plan, I would had to pay at least 75% of the dental charges + pay their premiums and not get coverage on the dental work I needed done.

Like most insurance companies,they are in the business to make a profit. If you are a lucky individual with
very little dental work required in retirement, (which for most is not the case), their plans may be ok
for you.


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## carverman (Nov 8, 2010)

Petee_C said:


> Found some details on the follow me plan. *Not that good of a deal*. We need coverage for some expensive meds. I will continue research. The drug company does have some patient assistance, so we'll explore that as well.....
> 
> Lot of things to line up,before making the switch to semi retired.....
> 
> Peter


I replied to your previous post before I saw this one. 

This ManuLife "follow me" plan has a lot of exclusions. I suppose if you are a younger person in good health with good teeth, it may be of some peace of mind, but they don't cover much in the first two years and they cap their limits after that. 

If they can't continue to make a profit off you (little or no claims), they probably will give you notice that due your "expensive claims" they may refuse to continue payouts for the balance of the calendar year..then basically you are on your own..as if you didn't have their insurance
plan .


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## naysmitj (Sep 16, 2014)

There is no benefit in purchasing individual medical benefits in Canada. As mentioned, it is only a benefit when your employer pays a portion. Just pay as you go.


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## carverman (Nov 8, 2010)

naysmitj said:


> There is no benefit in purchasing individual medical benefits in Canada. As mentioned, it is only a benefit when your employer pays a portion. Just pay as you go.


The basic plan they offer will just cover most of your premiums. The deluxe plan covers a bit more, but it also costs a lot more, so you basically get what you are paying for. 
After all, they are in there for a profit, so they are not going to pay for any expenses not specified.

The other thing I forgot to mention is that if they pay for a claim, you can't claim that on your income tax, and therefore the monthly premiums you have to pay can't be claimed. 
But you can claim any expenses above what they don't cover, but this requires additional accounting to figure out what you were re-imbursed for... and what wasn't.


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## Spudd (Oct 11, 2011)

carverman said:


> The other thing I forgot to mention is that if they pay for a claim, you can't claim that on your income tax, and therefore the monthly premiums you have to pay can't be claimed.
> But you can claim any expenses above what they don't cover, but this requires additional accounting to figure out what you were re-imbursed for... and what wasn't.


I agree that if they pay a claim, then you don't claim that on income tax. But you can claim the monthly premiums, according to TaxTips.ca:
http://www.taxtips.ca/filing/extendedhealth.htm

I still maintain that private health insurance is not worth it in Canada. For example, Green Shield (one of the first hits when I googled it) limits prescription drug payouts to $550/year for their only plan that doesn't ask health questions. If you can't self-insure for that amount there's something wrong! And dental maxes out at $450/year. If you want more than that, you need to answer health questions, and they'll exclude prescription drugs for pre-existing conditions (i.e. your wife's arthritis meds wouldn't be covered).


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## Mechanic (Oct 29, 2013)

I had a group plan when I ran my business but it was expensive for our smaller group. The benefits were limited too. After I retired at 55 I looked at costs vs benefits and a lot of the items I wanted covered were excluded. Also to take out Blue Cross they would not cover any prescription drugs that we had been prescribed previously. Decided to just pay as needed. Biggest expense was some dental work, which wouldn't have been covered mostly, followed by a couple of prescriptions for antibiotics here and there.


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## carverman (Nov 8, 2010)

Spudd said:


> I agree that if they pay a claim, then you don't claim that on income tax. But you can claim the monthly premiums, according to TaxTips.ca:
> http://www.taxtips.ca/filing/extendedhealth.htm


Thanks for correct info. After I went to retirement, the Nortel retireee health/dental/life plan covered me up until the point they went bankrupt. The Nortel pensioner plan was a benefit, but when the retiree plan stopped at point of their bankruptcy,
the pensioners investigated various private plans..as it was evident that most were too expensive for what the plans actually covered in benefits.

here is the CRA info:


> Include the amount that the employee paid on a T4 slip in the "Other information" area under code 85. *The use of code 85 is optional. If you do not enter code 85, we may ask the employee to provide supporting documents.*


As I mentioned, when you pay for these plans privately, you will have to do more bookkeeping to submit premium paid, which you have to ask the insurer for a yearly statement of premiums paid, claims the insurer paid and any claims they refused to pay due to conditions of the health/dental option contract you chose. 



> I still maintain that private health insurance is not worth it in Canada. For example, Green Shield (one of the first hits when I googled it) limits prescription drug payouts to $550/year for their only plan that doesn't ask health questions.


Their plans are more complicated depending on whether you are just leaving a group plan, self employed or soon to be retired. (leaving a group plan).


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## ian (Jun 18, 2016)

The only supplemental health care plan that I have been involved in purchasing was a Blue Cross add on drug program attached to my fathers pension plan. 

After about ten minutes of reviewing the Manulife Follow Me plan that I was offered on my retirement it became clear that this was not for us.

My mother was taking certain drugs that were not covered by the DVA (she was a veteran). We knew the annual cost. The Blue Cross program covered these drugs. The rest was pure math. I signed her up for this pension program option because there was a significant annual advantage in doing so. But there were three different flavours/levels of programs and they each had a different outcome/payback. Only you can tell whether any plan is right for you based upon your heath, and the plan thresholds and caps.


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## sags (May 15, 2010)

We have a union administered benefit plan in retirement, and a recent audit showed the cost of services to members was $3500 per year.

The largest cost was for prescriptions and dental. The fund is 103% funded and deemed financially sound until 2070.

The member contributions are $40 per month for active working members and $18 per month for members over 65.

The balance of the costs are derived from investment returns on the $2 Billion dollar fund. The average age of plan members is 69.

The trust is operated in the same model as an insurance company. (combined ratio)

The numbers give a rough idea of what it costs to administer a comprehensive health plan.

It should be noted that at age 65, health care plans merge with the Ontario senior's plan and only pay for "top ups" to the Provincial plan.


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## carverman (Nov 8, 2010)

sags said:


> We have a union administered benefit plan in retirement, and a recent audit showed the cost of services to members was $3500 per year.
> 
> The largest cost was for prescriptions and dental. The fund is 103% funded and deemed financially sound until 2070.
> 
> ...


It's good that your employer and union is still around to adminster (or at least engage a health care insurance provider) your plan, that hopefully will be in force for the rest of your life.

Not so with many of us out there. Nortel, while they were still in business, did provide pensioners health care benefits but as soon as they went bankrupt, the HWT (Health and Welfare Trust) did not have enough funding to sustain the requirements of all the pensioners or even former employees that would be elgilble for future pension benefits..so the health benefits stopped In 2011. In 2010 for 1 yr only, the courts made a 
ruling that pensioners benefits had to continue for one year until the pensioners could find alternative
health/dental/life plan they could afford. However the plans that were quoted on an individual basis
were generally much more than what we expected or received as taxable benefit from Nortel. 

So most of us ended up on our own, in the most financially vulnerable time of our lives, not to mention that the DB pension fund was at least 33% underfunded well before they went bankrupt in early 2009.

So what they did was to wind up the pension fund and divvy out a tiny lump sum that was allotted to each eligible pensioner from the HWT in two payments 2011and 2012 from what I recall (mine was $2155 in 2011, and $1140 final payment in 2014. This was all taxable income but I got the tax back that they deducted.

While the $2155 may have been enough for one years worth of insurance from Greenshield or whomever, in 2011, by 2014, it wouldn't be enough to pay for my dental expenses plan , so I just put the money into my TFSA , and paid out of my own pocket and claimed it on my income taxes.


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## OhGreatGuru (May 24, 2009)

Petee_C said:


> So you are saying my employer is paying extra per worker other than what is listed on my paystub?
> 
> ........


Once again, an OP asking questions online that should be directed to their pay& benefits office first. If you are a contributor to a HOOPP defined benefit pension plan, it's 99% likely your employer is also contributing to your group healthcare/dental plans. Their contributions do not show on your pay stub. Ask your P&B office for information.

You will also have to ask them if you can continue to be a member of the group plans if you go on part-time work


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## OptsyEagle (Nov 29, 2009)

It's 100% likely the employer is contributing to an employee's/pensioner's group plan. As I said previously, an insurance company will not even consider providing a group insurance plan unless the employer is willing to pay a minimum of 50% of the cost. Why the employer does not tell their employees of this I do not know. 

The insurance company demands this because without employer contributions, these plans do not work and they know it.


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## sags (May 15, 2010)

Just a notation for the OP.

My wife is a HOOPP retiree and we opted for her to receive a slightly lower monthly benefit to guarantee a 100% pension survival benefit. My pension provides a 66% survival benefit and small insurance policy. The health plan continues as long as we live.

With the invevitable loss of one OAS and CPP benefit when one of us passes on, we opted to max out the survival benefits for each of us.


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## Petee_C (Jan 13, 2017)

Guru, eagle, & sags.... 

Extended me $639 work $1919
Dental me$270 work$810.

The 'work' portion of the line is the YTD portion that shows up on my last December paystub that my employer contributes. 

You're still saying it's more?


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## Petee_C (Jan 13, 2017)

Sags, 

I eat and spend more than my wife, and probably the most liability.... 

If I go 1st, she will likely be doing better on the ledger books with the 60% benefits.... Vs me alive..... ?


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## TomB19 (Sep 24, 2015)

I've considered going part time but after quite a few projections of various scenarios, it became clear it would make more sense to work full time for three years and then just quit, rather than working part time for ten.

The problem is that part time people tend to make a lower wage, as well as have reduced hours. If you could find a situation where your wage remains the same but the hours are reduced, it could be ideal.

Now that I'm almost done the third year, I am questioning the decision. It's very nice to feel secure but it's not as nice to dislike life as I do. There are only so many years you can live for tomorrow, before you start wondering what the Hell you are doing to yourself.


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## OhGreatGuru (May 24, 2009)

Petee_C said:


> Guru, eagle, & sags....
> 
> Extended me $639 work $1919
> Dental me$270 work$810.
> ...


I misread your second post to mean no employer contribution was showing on your pay stub. They didn't on my federal government pay stubs - but the information was available as to what % employer was paying of our benefit plans.


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