Financial Planning for Employees at Brown-Forman

If you’re eligible for retiree medical and haven’t yet reached Medicare eligibility, your coverage automatically defaults to the Traditional PPO Pre-Medicare Plan. No action is needed on your part to enroll.

That said, this coverage isn’t automatic to keep. You can cancel it at any time by calling the B-F Benefits Service Center, and more importantly, it will be cancelled automatically if you miss a premium payment. Set up automatic payments or calendar reminders, since a late payment can end coverage during exactly the gap year it’s meant to protect.

No. Retiree medical coverage extends only to the retiree and an enrolled spouse or partner. Dependent children are not eligible, regardless of age. Both the retiree and spouse/partner must also have already been enrolled in an active B-F medical plan at the time of separation to qualify.

This is the question we hear most, and the honest answer is that it depends on three factors: your hire date, your age at separation, and your years of service.

• Hired before 12/31/2005: You need to be at least age 55 with 10 years of service just to be eligible for coverage. To receive a company subsidy, you’ll need age 60 with 20 years of service, or age 65 with 10 years of service.
• Hired on or after 1/1/2006: You can still be eligible for coverage, but you will never receive a company subsidy. You’d pay the full premium yourself.

That last point catches a lot of people off guard, so it’s worth flagging early in retirement planning conversations rather than at separation.

This is a highly nuanced question that can have both immediate and lasting tax and financial impacts. There is no one-size-fits-all answer; it depends on your current and projected future tax and financial situation, goals, and preferences. We recommend discussing your options with one of our advisors.

While both accounts are used for medical savings, they are fundamentally different in many ways.

• FSA (Flexible Spending Account): Only available on PPO medical plans. Contributions are pre-tax, and withdrawals for qualified medical expenses are non-taxable. Funds are “use it or lose it,” meaning any unspent balance at year end goes away. The account is employer-owned, so leaving the employer means losing the funds in the account. Funds cannot be invested, so contributions should be considered carefully.
• HSA (Health Savings Account): Only available on HDHP medical plans. Contributions are pre-tax, and withdrawals for qualified medical expenses are non-taxable. Unused contributions roll over into the next plan year, allowing you to build up a balance. The account is personally owned, so the funds are always yours, even if you leave the sponsoring company. Funds can be invested and grow tax-free. After age 65, funds can be distributed for any purpose without penalty, though non-medical distributions are taxed as ordinary income (similar to traditional IRA distributions).

Fun fact: Brown-Forman offers an employer contribution to the HSA for those participating.