If you are in the workforce beyond age 65 and covered by your employer’s group health insurance coverage, it is important to be aware of your Medicare insurance options. There are a few common penalties (both monetary and temporal) that you might face should you miss your enrollment deadlines.
Penalties and Medicare enrollment delays can easily be avoided so long as you are proactive. It is wise to talk with your human resources manager when you turn 65. You will want to ask specifically about your group health insurance eligibility. You can also talk with an insurance agent who is knowledgeable about group plans and Medicare eligibility.
If you are still not satisfied, then you might also reach out to your local social security office. Oftentimes the representative there can provide valuable advice. Additionally, it is a good idea to read about your options online and at Medicare.gov.
As it relates to Medicare decisions, the most important factor is the size of your company in terms of employees when you turn 65. If your group is under twenty employees, then you will need to enroll in Medicare Parts A and B.
You can no longer stay on your group health insurance even if it goes undetected. Once your group insurance carrier figures out that you are Medicare eligible and that your group does not meet the 20 employee requirement, then the insurance company will no longer pay benefits and can recoup costs for benefits already provided.
In a nutshell, if you are within 3 months of your 65th birthday and still plan on working at a company with fewer than 20 employees, then you should enroll in Medicare Parts A and B and you should also consider Medicare supplemental coverages.
If you are soon to be 65 and working for a group with more than 20 employees that provides group health insurance, then you can safely maintain this coverage if you wish.
Some will choose this option in order to avoid paying Medicare Part B premiums. Medicare Part B premiums are means tested, so those in higher income brackets will pay more for this coverage as well as Part D prescription drug plans.
If you are happy with your group health plan, then you can delay enrollment into Medicare Part B and stay on your group health plan while also avoiding the cost of Medicare Part B, supplemental, and Part D premiums.
You may choose to enroll in Medicare Part B at age 65 even if you are still under your large group health plan, but it is important to know that you are not forced into Medicare when you continue working for a large employer group that offers group health insurance.
One simple piece of advice is this: Don’t take COBRA health benefits when you retire and are over age 65. COBRA usually lasts 18 months, but by the time these benefits expire, then you will have missed your individual deadline to enroll in Medicare Part B.
If you are over 65, then there are very few reasons, if any, to stay on COBRA for an extended period of time. Your Medicare Part B enrollment window begins when you leave your job, not when your COBRA benefits end.
If you have waited beyond your 6 month Medicare open enrollment window (after separating from employment) to enroll in Part B, then you will be subjected to a 10% Part B late enrollment penalty when you do try to enroll with the government. The 10% penalty will be for your lifetime. And you will have a new waiting period before you can enroll in Part B. It’s a double whammy and it’s not good.
By avoiding COBRA and talking with your local social security office upon separation from employment or turning age 65, you can be sure that you are enrolling in Medicare at the appropriate time. You will also want to use this guaranteed issue period to find the supplemental coverage that you feel best fits your Medicare needs.
Medicare covers roughly 80% of most health bills. This is why most seniors purchase a Medicare supplement, Medicare Advantage, and/or Part D plan. These coverages can help pick up some or all of what is not covered by Medicare.
Supplemental plans are sold by insurance agents (like us) and are private policies whereas Medicare Parts A and B are federally sponsored public plans. Supplemental plans can also have late enrollment penalties and delays. And in some cases, you may not be able to purchase any supplement if you have waited beyond your open enrollment or guaranteed issue period of time.
Medicare Parts A and B are only the first half of the Medicare puzzle. Once you have enrolled in Original Medicare with the government, you will want to use your open enrollment window to explore your supplemental plan options. It is wise to speak with an independent agency (like us) to decide which plan(s) best fit your needs and budget.
There is no doubt that if you are new to Medicare, the enrollment process can be somewhat intimidating. Above all else, it is most important to enroll at the appropriate time. Missing your open enrollment window will add a premium penalty and delay your eligibility.
If you are unsure, it is wise to lean on the experts who work with senior insurance programs everyday. Talk to a chosen insurance agent, human resources manager and/or a Medicare representative over the phone or in person.
Hyers and Associates, Inc. is a full service independent insurance agency specializing in health coverage for seniors. Contact us today to learn more about your options.