How to Manage Your Employer Insurance and Medicare When You Turn 65
If you are approaching 65 and still working, you may be wondering how your employer insurance and Medicare will work together. You may also be confused about whether you need to sign up for Medicare or delay it until you retire. In this article, I will explain the basics of employer insurance and Medicare, how they coordinate with each other, and what you need to consider when making your decision. This article is worth reading because it will help you avoid costly mistakes, such as paying penalties, missing enrollment periods, or having gaps in coverage.
What is Employer Insurance and Medicare?
Employer insurance is the health insurance that you get from your current or former employer. It may cover you, your spouse, and your dependents. Employer insurance can be a group health plan or a private insurance plan. Employer insurance may offer benefits that Medicare does not, such as dental, vision, or prescription drug coverage.
Medicare is the federal health insurance program for people who are 65 or older, disabled, or have certain medical conditions. Medicare has four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage), and Part D (prescription drug coverage). Part A and Part B are also known as Original Medicare. You are eligible for Medicare and employer health coverage when you turn 65. Medicare and employer coverage are essential.
How Does Employer Insurance and Medicare Work Together?
When you have both employer insurance and Medicare, one of them will be the primary payer and the other will be the secondary payer. The primary payer pays first for the health care services that you receive, and the secondary payer pays after the primary payer has paid its share. The secondary payer may cover some or all of the costs that the primary payer does not cover.
The primary payer depends on the size of your employer and whether you are still working or retired. Generally, if your employer has 20 or more employees and you are still working, your employer insurance will be the primary payer and Medicare will be the secondary payer. If your employer has fewer than 20 employees or you are retired, Medicare will be the primary payer and your employer insurance will be the secondary payer.
Do You Need to Sign Up for Medicare When You Turn 65?
If you are still working and have employer insurance, you may not need to sign up for Medicare when you turn 65. You can delay enrolling in Medicare Part A and Part B without paying a penalty if you have credible coverage from your employer. Credible coverage means that your employer insurance is at least as good as Medicare.
However, there are some advantages to enrolling in Medicare Part A when you turn 65, even if you have employer insurance. Part A is usually free if you or your spouse have paid Medicare taxes for at least 10 years. Part A insurance pay for some of the costs that your employer insurance does not cover, such as deductibles and coinsurance. Part A can also cover you if you lose your job or your employer coverage ends.
If you decide to enroll in Medicare Part A when you turn 65, you should check with your employer if you have a health savings account (HSA). You cannot contribute to an HSA if you have Medicare Part A. You may want to stop contributing to your HSA at least six months before you enroll in Part A to avoid tax penalties.
If you decide to delay enrolling in Medicare Part B when you turn 65, you should make sure that your employer insurance covers outpatient services, such as doctor visits, lab tests, and preventive care. If your employer insurance does not cover these services, you may want to enroll in Part B to avoid paying out-of-pocket costs.
You should also be aware that if you delay Medicare Part B, you will have a special enrollment period (SEP) to sign up for it when you stop working or lose your employer coverage. The SEP lasts for eight months after your employment or coverage ends, whichever comes first. If you do not enroll in Part B during this period, you may have to pay a late enrollment penalty when you sign up later. The penalty is 10% of the monthly premium for each full 12-month period that you could have had Part B but did not.
What Are Your Options for Medicare Coverage When You Have Employer Insurance?
If you enroll in both Medicare Part A and Part B when you turn 65, you will have several options for how to get additional Medicare coverage. You can choose one of the following:
- Stay with Original Medicare and add a Medicare Supplement (Medigap) Plan and a Part D Plan. A Medigap Plan helps pay for some of the out-of-pocket costs that Original Medicare does not cover, such as deductibles, coinsurance, and copayments. A Part D Plan helps pay for prescription drugs.
- Enroll in a Medicare Advantage Plan that includes prescription drug coverage. A Medicare Advantage Plan is an alternative way to get your Medicare benefits from a private insurance company. It covers all the services that Original Medicare covers, and may offer extra benefits, such as dental, vision, or hearing care. Some Medicare Advantage Plans also have lower premiums, deductibles, and copayments than Original Medicare.
- Enroll in a Medicare Advantage Plan that does not include prescription drug coverage and add a Part D Plan. This option may be suitable if you like the benefits and costs of a Medicare Advantage Plan, but prefer to have a separate Part D Plan for your drug coverage.
When you choose your Medicare coverage option, you should consider how it will coordinate with your employer insurance. You should compare the benefits, costs, and networks of both plans and see which one offers you the best value and coverage. You should also check with your employer if you can keep your employer insurance if you enroll in a Medicare Advantage Plan or a Part D Plan. Some employers may require you to drop your employer insurance if you enroll in these plans.
How to Apply for Medicare When You Have Employer Insurance?
If you decide to enroll in Medicare when you turn 65, you can apply online, by phone, or in person. You can apply online at the Social Security website, by calling 1-800-772-1213, or by visiting your local Social Security office. You can apply up to three months before your 65th birthday, the month of your birthday, or three months after your birthday.
When you apply for Medicare, you will need to provide some information, such as your name, date of birth, Social Security number, and current address. You will also need to provide proof of your employer insurance, such as a letter from your employer or a copy of your insurance card. This will help determine if you are eligible for a penalty-free delay of Medicare enrollment.
How to Speak with a Licensed Insurance Agent When You Have Employer Insurance?
If you have questions about your employer insurance and Medicare options, you may want to speak with a licensed insurance agent who can help you understand your choices and find the best plan for your needs. A licensed insurance agent can compare different plans and explain their benefits, costs, and networks. They can also help you enroll in the plan that you choose and answer any questions that you may have along the way.
To speak with a licensed insurance agent, you can call 1-800-Medicare (1-800-633-4227) or visit the Medicare website and use the Find a Plan tool. You can also use online platforms that connect you with licensed insurance agents who specialize in Medicare, such as eHealth or Health Markets.
In this article, I have explained how to manage your employer insurance and Medicare when you turn 65. Here are some key points to remember:
- If you are still working and have employer insurance, you may not need to sign up for Medicare when you turn 65. You can delay enrolling in Medicare without paying a penalty if you have credible coverage from your employer.
- If you enroll in both Medicare Part A and Part B when you turn 65, you will have several options for how to get additional Medicare coverage. You can stay with Original Medicare and add a Medigap Plan and a Part D Plan, enroll in a Medicare Advantage Plan that includes prescription drug coverage, or enroll in a Medicare Advantage Plan that does not include prescription drug coverage and add a Part D Plan.
- When you choose your Medicare coverage option, you should consider how it will coordinate with your employer insurance. You should compare the benefits, costs, and networks of both
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Senior Health Advocates a Call at (386) 222-3030. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
1. I have health insurance coverage through my current employer, how does Medicare work with employer provided insurance?
If you are still working and have employer health benefits, your employer health coverage is typically primary and Medicare is secondary. This means your employer health plan pays claims first before Medicare contributes to any unpaid amounts.
2. I will become eligible for Medicare when I turn 65 but want to keep my employer provided health insurance, can I do that?
Yes, if you have employer health coverage through either your own current employment or a working spouse, you can delay signing up for Medicare Part B and keep your employer coverage primary instead. However, be sure to enroll in Part A and Part B during your Initial Enrollment Period surrounding your 65th birthday to avoid penalties for late enrollment.
3. How do I enroll in Medicare Part B if I am still covered under my employer’s health plan?
Contact a licensed Medicare insurance agent to help you enroll in Medicare Part B as a working individual. Even though your employer coverage is primary, you’ll need to be enrolled in Part B in order to avoid penalties when your work coverage eventually ends. Be sure to provide evidence of your employer coverage to enroll without premium penalties.
4. Will my employer health benefits or Medicare pay first if I have both?
If you have active employer health coverage through either your own job or a working spouse, that coverage is typically primary and will pay medical bills before Medicare contributes as the secondary payer. However, once your active employer coverage ends, Medicare becomes primary unless you have group health plan coverage based on your own or a spouse’s current employment.
5. I currently have health insurance coverage through my employer but plan to retire soon, how does Medicare work then?
When your active coverage through an employer with 20+ employees ends due to retirement, Medicare will become your primary insurance instead. Be sure to sign up for Medicare Part B during your Special Enrollment Period to switch from your employer coverage being primary to Medicare. This ensures you maintain health care coverage during the transition.
6. Can I contribute to a health savings account (HSA) if I am enrolled in Medicare?
No, once you are enrolled in Medicare, even if it is secondary to employer coverage, you become ineligible to contribute to an HSA since Medicare counts as qualifying health coverage. The one exception is if you are enrolled in Medicare solely for premium-free Part A hospital insurance, without Part B medical insurance.
7. I am still covered under my employer’s plan but want to know more about signing up for Medicare when I retire. What should I do?
The best thing to do is speak with a licensed Medicare insurance agent to better understand your options and determine the best time to enroll based on your specific situation. An agent can help you navigate how Medicare coordinates with your current employer coverage, and explain all your coverage choices like Medicare Advantage and Part D prescription plans.
8. If I enroll in Medicare, will it replace my employer provided coverage?
No, enrolling in Medicare does not necessarily replace your employer coverage. If you have health benefits through your employer or a working spouse, Medicare would complement this primary coverage. Even after retiring, you might have the option to keep employer coverage and enroll in Medicare to maximize your benefits. A licensed agent can help you understand your coverage choices.
9. If my employer has fewer than 20 employees, how does that affect when I can enroll in Medicare?
If your employer has less than 20 employees, then Medicare usually becomes your primary insurer immediately upon enrolling, even if you are still employed. When you enroll depends on your specific situation. Be sure to contact the Social Security Administration or consult a licensed Medicare insurance agent regarding your enrollment options and periods.
10. I am planning to retire before I turn 65 and lose my employer provided health insurance, can I enroll in Medicare early?
Yes, even if you retire prior to age 65, you can enroll in Medicare Part B during your 8-month Special Enrollment Period that starts the month after your employer coverage ends. This ensures you have health care coverage through Medicare in place before losing the employer plan. You’ll also want to confirm enrollment in Medicare Part A which is usually automatic based on your Work Credits.
How does employer insurance and Medicare work? Medicare is the primary payer?
In the employer plan, the employer health insurance i pay first for more that 20 employees and Medicare is the secondary payer. For less than 20 Medicare pays first and is the primary insurance. So when looking for insurance coverage or become eligible for Medicare Plan or qualify for Medicare you to understand these things.
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