Working past age 65 is no longer uncommon. According to the U.S. Jobs report, almost 19 percent of people 65 or older worked at least part-time in the second quarter of 2017.
With that in mind, it pays to be aware of current guidelines for employees who want to keep their group health care benefit plan as opposed to using Medicare.
Medicare is the federal health insurance program for people 65 or older; certain younger people with disabilities; and people with permanent kidney failure requiring dialysis or a transplant.
Seniors can sign up for different parts of Medicare, depending on the services they need:
- Part A – Hospital insurance for inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care. Coverage is free.
- Part B – Medical insurance for certain doctor services, outpatient care, medical supplies and preventive services. Requires a monthly premium.
- Part C (Medicare Advantage Plans) – Offered by a private company that contracts with Medicare and provides all or part of Part A and Part B benefits. Enrollees pay a monthly premium.
- Part D – Prescription drug coverage offered by some insurance companies and other private companies approved by Medicare. Enrollees pay a monthly premium.
Remember that while you can provide basic information, it will be to your employees’ advantage to double check answers with Social Security in case of rule changes or exceptions.
Employee: When must I enroll in Medicare?
Answer: You have a seven-month period to sign up. This period starts three months before the month you turn 65 and ends three months after your birth month. If you don’t sign up, you will see a 10 percent increase in your Medicare Part B premiums for every 12 months you qualify but fail to enroll in Part B. There may also be a late penalty on Part A if you were not entitled to Part A for free because you did not previously work or did not work long enough.
Employee: Do I have to enroll in Medicare Part B if I want to stay on the company’s group health benefit plan?
Answer (if your company has 20 or more employees): No. Since our company has more than 20 employees, you can delay enrolling in Part B, stay on our company’s coverage and not pay a penalty when you decide to enroll in Medicare Part B. When you do retire, or leave work, you’ll have eight months to sign up for Part B without a late penalty. Call Social Security to inform them that you decline Part B. You may have to provide documents showing you have creditable coverage with us. If you decide to stay with our plan plus Medicare Part B, our coverage probably will be your primary insurer and Medicare will be secondary. In this case, it may not be cost effective to pay both premiums.
Answer (if Your Company has Fewer Than 20 Employees): Smaller companies like ours have discretion in deciding if employees must sign up for Part B at age 65. Under current guidelines, if you decide to go with both, Medicare is the primary insurer for organizations our size and our plan is secondary.
Employee: Do these rules apply to my family?
Answer (20 or More Employees): Since our company has 20 or more employees, you can enroll in company coverage instead of enrolling in Medicare Part B and your spouse will be covered, including if you are in a same-sex marriage (even if in a state that does not recognize same-sex marriage). It doesn’t apply for an unmarried partner (unless you live in a state recognizing common law marriage).
Employee: If I stay with company coverage, will I get the same health care benefits?
Answer (20 or More Employees): Yes, federal law requires we offer the same benefits for members over age 65 as we do for all other employees. Also, we cannot offer to pay your Medicare premiums to induce you to enroll in Medicare and drop the employer plan.
Employee: If I don’t sign up for Part B, what are the advantages of signing up for Part A?
Answer: If you qualify, you pay no premiums for Part A, which mainly covers allowable, medically necessary hospital expenses; limited home health care; institutional care in a skilled nursing facility in certain situations; and hospice care. You can sign up during your initial Medicare enrollment period.
Employee: If I sign up for Medicare Part A, B or C, can I keep my health savings account?
Answer: You can withdraw funds, but you cannot add to the account.
Employee: Do I need to sign up for Part D?
Your Answer: Part D is voluntary. If you have our coverage (and we have creditable drug coverage), you probably don’t need Part D. When our coverage ends, you have two months to sign up for Part D without penalty.
For help explaining their Medicare options to your over 65 employees, please contact us.