With more and more people working past 65 years old, HR directors are being asked about Medicare eligibility versus staying on the group plan. ACE has the answers.
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Q: My employees are turning 65 — do they have to go on Medicare, or can they stay on our group plan?
ACE Advises: With more and more people working past 65 years old, this is a common question for human resource managers. The simple answer is yes, they can stay on their employer-based coverage if they want to. However, it’s not a one-size-fits-all solution. Some employees may find better coverage through Medicare while others may not.
Let’s break it down. When your employees turn 65, they usually become eligible for Medicare. They can delay enrollment in Medicare without facing a late-enrollment penalty if they have credible coverage somewhere else. Later, when they retire or their employer coverage ends, they submit proof of job-based health insurance and enroll Medicare.
They may also choose to drop the employer coverage while still employed and enroll in on Medicare immediately, typically picking up supplemental plans from private insurers to pay expenses that Medicare does not cover.
Lastly, they could choose to pay for both the employer plan and Medicare although this can lead to being over-insured.
It’s important to note that Medicare can have premiums. Hospital insurance (Part A) can be premium-free if someone has worked at least 10 years (40 quarters) and paid into Medicare throughout their lifetime. Most people pay a monthly premium for Medicare Part B (medical insurance), based on their income.
Long story short — yes, your employees can choose their coverage, however they need to compare their employer-based insurance with what’s available to them via Medicare. This includes comparing benefits, drug costs, maximum out of pockets, deductibles, co-pays and premiums. Medicare.gov is a good place to start.
ACE member, Brianna Henward, is an independent insurance advisor and owner of Tindon Associates. She specializes in Medicare plans & planning. the Affordable Care Act the Maine Health Insurance Marketplace. She can be reached at brianna@tindon.us or (207) 691-1412.
