If you’re nearing 65 (or you’re older) and get both Medicare and employer coverage because you’re actively working, you have some things to evaluate.
You can be enrolled in Medicare and simultaneously receive employer coverage. Before you decide, you may do a quick cost-benefit analysis between the Medicare expenses and the cost of your group insurance.
A licensed agent at Trusted Senior Specialists can guide you through this and offer suggestions. If it makes sense to stick with your employer coverage, we’ll let you know.
The information below applies to Medicare users ages 65 or older.
Options
Employer Group Health Insurance
You may stay on the group plan from your employer as long as you’re still working. This means you’re not retired and you’re not on COBRA. Your Medicare benefits can accommodate your employer health insurance, but it will depend on how many employees the company has. If you get group coverage through your spouse’s employer, the same rules will apply.
Large Employers: 20 or More Employees
If the company has over 20 workers, it’s regarded as a large employer. In this situation, your employer insurance would be primary and Medicare would be secondary. This means your group health plan would pay its portion first and Medicare would pay second.
Medicare Part A
With employer coverage, the easy option is to enroll in Medicare Part A. Your premiums will be $0 if you’ve worked in the U.S. for least 10 years. Part A can adjust to reduce your costs if you need a hospital stay. The exception is if you’re giving to a health savings account (HSA) plan and you intend to keep contributing, don’t enroll in Part A.
Medicare Part B
Part B works differently than Part A. You’ll pay a monthly premium that’s based on your income. Some people delay enrollment for Part B and Part D, and this saves them money on premiums. Since your employer insurance already has outpatient benefits, you may not need to pay those premiums for Parts B and D.
Delaying enrollment for Medicare Part B makes your employer plan “creditable coverage” — so you can sign up without having to pay a late fee when you’re ready to retire.
Medicare Can Be Your Primary Coverage
Some people prefer to leave their employer coverage and enroll in Medicare as their primary insurance. Then, they may choose to add a supplement policy. This is usually a cost-effective option because it reduces deductible spending and eliminates all doctor copays.
Again, a cost-benefit analysis would be a smart idea before you decide. Consider your plan copays, deductible, and medication usage, and examine how your employer coverage affects your payroll deductions each month. Your licensed agent at Trusted Senior Specialists can help you choose whether to join Part B now or wait to enroll.
Small Employers: Less Than 20 Employees
If the company has under 20 workers, it’s deemed as a small employer. Medicare would then be the primary coverage and employer group insurance would be secondary. This means Medicare would pay its share first and your employer coverage would pay second. In this case, you’ll need Medicare Parts A and B.
The Exception: Health Savings Account Plans
Health Savings Account (HSA)-compatible health plans are a deviation to either large or small employer insurance. If you have a high deductible plan and join Medicare, you can’t contribute to your HSA anymore. If you’re signed up for any part of Medicare, you can’t contribute to an HSA and you can’t take contributions from your employer.
Enroll in Original Medicare If You Work for a Small Employer
If you work for a small employer, enroll in Original Medicare to avoid tax penalties.
If you want to keep your HSA-qualified employer insurance, you will need to stop contributing to the account. However, your spouse is able to give if he or she is insured on your employer group plan and has yet to join Medicare.
Give Us a Call
For more information about Medicare and employer coverage, call (844) 325-8710. A licensed agent at Trusted Senior Specialists will be glad to help.
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