Did you know that traditional retirement age is 65? Did you also know that at age 65 you become eligible for Medicare?
Turning 65 is no guarantee that you will be ready to retire. In fact, a rapidly growing number of older Americans are continuing to work past age 65. According to the U.S. Jobs report released in April 2018, 32% of Americans age 65 to 69 were employed last quarter. Even past age 70, a growing number of seniors are either declining or unable to retire. With the numbers increasing every year, this looks to be a continuing trend.
If you plan to continue working past retirement age, there is one essential detail you cannot afford to overlook- and that is healthcare. So what happens if you decide to continue working past age 65 and are covered by an Employee Sponsored plan? Should you drop your employer’s group health plan and enroll in Medicare? Or keep your Employee plan and delay Medicare enrollment? Does your Employer pay for Medicare premiums?
What Happens to My Health Insurance When I Turn 65?
Most workers choose to enroll in Medicare Part A because you usually do not pay a monthly premium for it if you or your spouse paid Medicare taxes while working for at least 40 quarters, which is 10 years.
The size of your company is what will determine who will be your primary health insurance provider. If your company has 20 or more employees, your employer’s group insurance will be your primary healthcare provider and Medicare will be your secondary.
However, if your employer has less than 20 employees, Medicare becomes your primary insurer, and in this case, you might want to enroll for Medicare Part B as soon as you become eligible.
Primary and secondary insurer denotes who pays first when you incur medical expenses. If your primary insurer is the employer, your group health insurance plan pays first, and then your Medicare coverage takes care of part or all of any remaining costs. If Medicare becomes your primary insurer, Medicare will cover all or part of your Medicare-approved expenses, then your employee coverage will cover remaining expenses.
Can My Employer Pay My Medicare Premiums?
Employers can pay Medicare premiums for active employees if the company’s payment plan is integrated with the group’s health plan. For example, the linked group plan must provide minimum value by paying for at least 60 percent of the actuarial value of services received. These payments must be limited to Medicare Part B and Medicare Part D.
Another way an employer can pay is through the Internal Revenue Code (IRC). Under the Internal Revenue Code’s Section 105 Plan, employers are allowed to reimburse their employees their Medicare health insurance premiums. The section 105 reimbursement plan allows employers to give an allowance to its aging Medicare-insured workforce for a broad range of medical premiums including Medicare Part B, Medicare Part D, Medicare Advantage, and Medigap.
Should I Rely on My Employee Plan? Or enroll in Medicare?
If you choose to keep working past retirement, this is one of the matters you are going to have to tackle first. Everyone past age 65 needs health insurance. Whether you get it via your employer, your spouse’s employer plan or Medicare will depend on your individual situation.
You will want to look at key plan features, maximum out of pocket costs, and deductibles before you make any decisions.
It’s not just about the premiums. Do your current doctors accept Medicare? Are you satisfied with their service? If your employer’s plan provides the most benefits, you might want to stick with it as your primary coverage.
If you decide to stick with your employer’s group health insurance, you can check with Medicare to see if you can delay enrolling in Part B. In some cases, your employer may require you to enroll in Medicare.
If you decide to drop your employer’s group health insurance plan for Medicare, and if you are married and your spouse is covered under your employer’s plan, you will need to research plan options for when they lose coverage from your employer's plan.
This can be a lot of information to take in. What you need to know is that we can help provide answers to all your top Medicare questions and help you research the best options available to you.
We are here for you and will love to walk you through the complexity of your Medicare Journey. Talk to one of our licensed Trusted Senior Specialists agents, give us a call: