We all know that planning for health care in retirement isn’t something many people give much thought to—until they get close to retirement age. As health-care costs in retirement are now projected to reach $245,000 for a couple retiring at age 65, according to the Fidelity’s 2015 Retirement Health Care Cost Estimate, waiting until retirement is simply too late.

Many of my friends had planned to retire around age 62, but the issue of affordable health insurance pre-Medicare eligibility has them tied up in knots. They may or may not have early retiree coverage, and they don’t realize their options. So they default to what they know best—continue to work, use their current employer’s plan and pay its associated costs, and miss out on the opportunities in today’s marketplace.

For those under 65, retirement health-care costs will certainly be higher: employees are shouldering 77 percent higher out-of-pocket costs than they did a decade ago, according to a Kaiser Family Foundation analysis of data from 2004 to 2014; and employers continue to evaluate strategies to further scale back health-care benefits, if they offer them at all to retirees.

These strategies include more employers—83 percent—offering high-deductible health plans (HDHP), and 56 percent now offering HDHPs with health savings accounts, according to the PWC’s 2015 Health and Well-being Touchstone Survey. Large employers offered 5.7 health plans in 2015, compared to 3.6 plans in 2014. More employers are considering added cost sharing, with 48 percent studying pharmacy benefits and 42 percent reviewing their medical plan design, PWC reported. In addition, more employers are evaluating options to terminate employer-provided early retiree and retiree medical benefits, or shift these individuals to plans on the Health Insurance Marketplace.

By better understanding the changes in employer-provided health-care benefits—both for pre-retirees and retirees—financial advisors can play a crucial role in helping clients prepare for a changing health-care landscape and identify options to make health care more affordable as retirement approaches. Below are strategies important for financial advisors to include in overall planning.

Leverage High-Deductible Plans With Health Savings Accounts

Nearly one in four covered workers (24 percent) were enrolled in a high-deductible plan with a savings options in 2015, most notably a health savings account (HSA), up from just 14 percent in 2010, according to the Kaiser Family Foundation/Health Research & Education Trust (HREIT) 2015 Employer Health Benefits Survey.

In addition to providing health insurance for immediate needs, the HSA portion of these plans allows clients to save tax free for future health-care costs: the dollars contributed are tax deductible, the money grows tax free, and it can be withdrawn tax free to pay for out-of-pocket medical costs, including Medicare (but not Medigap) premiums in retirement. For 2016, the HSA contribution limit for individuals is $3,350 and for families $6,750, with the amount indexing to inflation each year.

This means millennials contributing the maximum annually could amass six-figure HSAs by the time they retire. However, according to the Employee Benefits Research Institute, HSA balances fall far short of this—with the average 2014 year-end account balance at just $1,933. Clients 55 and older can use a $1,000 catch-up contribution to add to their HSA savings.

While HSAs offer a great tax-free investment option, financial advisors should ensure their clients are aware that they will face tax penalties if they make contributions to an HSA once they are 65 or older and enrolled in Medicare Part A. This complication typically occurs either because:

1. Someone signs up for Social Security before full retirement age and, unbeknownst to them, is automatically enrolled in Medicare at age 65; or

2. They enroll in Social Security after age 65 at which point their Medicare Part A is given to them six months retroactively, subjecting any HSA contributions made for that time to tax penalties.

Evaluate Health Insurance Marketplace Plans For Early Retirees

While just 25 percent of workers plan to retire before age 65, about one-half of retirees leave the workforce earlier than they’d planned, according to the EBRI 2015 Retirement Confidence Survey. Often this is the result of hardships such as health problems or disability, but nearly one-third also report retiring early because they can afford to do so.

One crucial aspect of retiring early is understanding how to secure affordable health care until becoming Medicare eligible at age 65. Only 39 percent of employers offer medical benefits for early retirees, according to the PWC 2015 survey, and many of them are scaling back or eliminating these benefits as they look to manage costs. For example, one company we assisted with health-care benefits coordination was in the unsustainable position of providing health insurance to more early retirees and retirees than its current employees.

Changing economic forces are affecting early retirees’ options as well. Even early retirees who have employer-provided health coverage may benefit from plans offered through the public Health Insurance Marketplace. Often, pre-retirees can find a plan that better meets their needs at a more affordable price on the public exchange.

The Marketplace remains a bit messy—and scary—with at least one major carrier indicating they will scale back their participation and plan offerings, which could trigger increased premium rates for consumers if more nimble and savvy competitors don’t fill the gaps. The Marketplace isn’t well understood and may come with political bias, which provides financial advisors with an opportunity. Educating your clients about these dynamics can help them overcome misconceptions about Marketplace plans, such as that the plans have poor benefits. The truth is that all Marketplace plans offer a minimum of 10 essential health benefits, such as prescriptions, hospitalization, emergency services, lab services and preventative and wellness services. With multiple options available, your clients may be able to find a plan that more closely matches their health-care needs and budget than the handful of plans or fewer offered by their former employer.

Some people who have higher pre-retirement incomes struggle to understand subsidies and cost sharing in the Marketplace. Because subsidies are based on taxable income only, not assets overall, these subsidies aren’t just for low-income individuals. Subsidies are available for individuals with modified adjusted gross income (MAGI) of up to 400 percent of the federal poverty level. For a household of two people, the MAGI amount is $64,080. You have a role here, too: financial advisors can help clients identify ways to reduce taxable income and help ensure they are eligible for greater cost-saving subsidies.

Comparing Benefits And Costs: Employer-Provided Retiree Coverage Vs. Medicare

Employers also continue to trim retiree health-care benefits, with just 31 percent offering retirees benefits and nearly one-half of these employers looking to change or eliminate retiree benefits, according to the 2015 PWC survey.

At the same time employers are scaling back benefits, many retirees are paying more for fewer benefits. These retirees may be better off foregoing employer-provided health-care benefits and opting instead for Medicare and supplemental, or Medigap, coverage.

Whereas many employer-provided retiree plans have high premiums and out-of-pocket costs, Medigap offers first-dollar coverage with no out-of-pocket costs beyond the premium. One of Medigap’s features is broader access to doctors, particularly when compared with employer plans that incorporate doctor networks and higher costs when participants go out of network. Moreover, the client may find a Medigap plan that better meets their needs with a premium a few hundred dollars less than employer-provided coverage. Combined with no out-of-pocket costs, this could result in clients potentially saving hundreds or thousands of dollars each year on their health-care costs.

Fostering Health-Care Literacy

Helping to educate clients about financial decisions is a cornerstone of providing sound financial advice. Decades ago, when employers began eliminating defined benefit plans for defined contribution plans, financial advisors stepped in to help clients understand how to manage their investments and plan for retirement.

Now, with employer strategies for health-care benefits changing or being eliminated, more clients are becoming responsible for their own health-care decisions and health-care costs as well. Financial advisors recognizing this can step in to help educate and guide their clients to make the best choices to meet their goals and further secure their retirement.

Mary Dale Walters is senior vice president of Allsup Inc. Allsup and its subsidiaries provide nationwide assistance for individuals and business navigating the complexities of private and public health insurance benefits before and after retirement. Financial advisors may contact (888) 220-9678 or go to FinancialAdvisor.Allsup.com for more information.