Medicare and Employer Coverage
People often work past age 65. When Medicare decisions intersect with workplace health insurance, a logical decision should be made to answer the question “which health insurance is better for me?” Yet again, there is no quick answer.
Tip: if you view "Medicare" as "health insurance"; it can become easier to compare.
Our advisors look at the following:
What is the premium that you are currently paying for group insurance?
What are the coverage details?
Who is on the plan? (younger spouse? Children age 26 and younger?)
How is your health?
Are you self-employed?
Are you in a small (under 20 employees) or large (over 20 employees) setting? (see PDF below)
Are you in a high deductible plan and contributing to a Health Savings Account?
People often make the mistake of assuming that because they have access to an employer group plan that it is better than Medicare’s health insurance.
Our answer is always “let’s compare and find out”.
What if my Spouse or I are still working past age 65?
What if my spouse or I are working after age 65?
If you are working beyond age 65 and enrolled in your group plan (or covered through your spouse’s ACTIVE employer coverage), realize that you have the option to stay with that plan OR enroll into Medicare.
Caveat – if the employer size is under 20 employees, you will need to enroll into Medicare’s Parts A and B.
If you are insured through a large employer group plan, you like your coverage, you are paying relatively little for the coverage, you can certainly remain there until you leave that plan.
However, please don't assume that the employer coverage is better than Medicare’s options. It’s typically worth the time to call and talk things through with our advisors. People make mistakes assuming that one coverage is better than the other.
What if I contribute to a Health Savings Account (HSA)
If you contribute to an HSA (Health Savings Account) and want to continue doing so, you will NOT want to enroll into any parts of Medicare (A or B). Health Savings Accounts cause and create much confusion as they relate to Medicare.
If you are contributing to a health savings account and are currently receiving Social Security benefits, you WILL be enrolled into Medicare Part A automatically and therefore need to stop contributing to that health savings account.
Be careful as you go beyond age 65 as well. If you are funding your health savings account and plan to retire at age 68, for example, understand that when you apply for your Medicare coverage, your Part A of Medicare retroactively start six months prior.
Therefore, you need to understand when to stop funding the HSA.
Like we said... this is confusing!
How do I sign up for Medicare when I'm ready to Retire?
Okay, so you finally made the big decision to retire!
Now the only thing you have to do is, of course, figure out what to do for Medicare (probably after you pick out your first vacation).
In this section, we will assume that you've already started Part A of Medicare while you were employed. Take a look back at some of our previous sections in case you need a refresher on why you may ONLY want Part A while you plan to continue working.
This video will highlight how to add Part B of Medicare when you are no longer covered by your employer's insurance.