Many employees are postponing retirement and working beyond the traditional retirement age of 65. While this segment of the workforce provides important experience, there are some challenges for both the employer and the employees.
Employees may not fully understand what Medicare offers and stay on the group health plan at work since they are familiar with it. This may increase the cost of the group health plan for employers. In many cases, Medicare may actually be a better option for employees. However, Medicare can be complicated and many employers don’t feel confident answering questions about the details of Medicare.
The following article is an overview of the considerations associated with making the best decision for you and for your employees.
InsureOne Benefits offers Medicare education for employees so they are better prepared to make the choices that best fit their individual situation. Whether employees are eligible for Medicare now or will be in the near future, becoming educated about Medicare means they will be better prepared for retirement.
To learn more about how a Medicare Education Webinar can benefit your company and your employees, fill out the form below. Your Oswald Service Team will be in contact.
Medicare in and of itself is confusing. Months in advance of an employee’s 65th birthday, their mailbox begins to fill up with cards, flyers, letters, and packets soliciting the purchase of a certain Medicare plan or the need to “take action and enroll now” or be penalized forever.
For the employee turning 65, this onslaught of Medicare sales material and solicitation calls are overwhelming and add to the confusion associated with Medicare enrollment, timeframes, rules, and regulations.
As a result, more questions are being asked and information requests being made by employers and employees alike regarding enrollment in Medicare Part A (Hospital Insurance) and Part B (Medical Insurance).
Employees or spouses who worked and paid Medicare taxes for a long enough period-of-time (around 10 years) earn the right to Part A and upon enrollment and will not be required to pay a monthly premium. This is called “premium-free Part A”.
Enrollment in Part B requires payment of an income based monthly premium. The standard Part B premium in 2021 is $148.50 per person per month.
Medicare: An Option or a Requirement
For some employees, enrolling in Medicare at age 65 is a requirement. For a growing number of employees, enrolling in Medicare upon turning 65 or later, represents a decision.
If an employer has fewer than 20 employees, an employee turning 65 and covered by the employer-based health insurance plan may be required to enroll in Medicare Part A and Part B. Medicare then becomes the primary payer of the employee’s coverage.
What if an employee works full time for an employer with 20 or more employees and covered by an employer-based health insurance plan?
CMS (Center for Medicare Services) offers that most employees turning 65 should enroll in Medicare Part A…even if they have health insurance through their employer.
Should however does not mean required…
An individual with health insurance through their (or spouse’s) current employer, should also be able to delay enrollment in Part B.
But what if an employee has a qualified High Deductible Health Plan (HDHP) and contributes into a Health Savings Account (HSA)?
Per CMS, should an employee enroll in any part of Medicare, even “premium-free Part A”, they will no longer be able to contribute or receive contributions into their HSA.
To continue making contributions into the HSA, the employee should delay enrollment in Part A and/or Part B until they stop working or choose to move from the employer coverage to Medicare. No penalty will be assessed for delaying Medicare enrollment, as long as enrollment takes place within 8 months of employer coverage ending or stopping work…whichever happens first.
As health insurance premiums or claim and administrative costs paid by employers with more than 20 employees continue to increase, so have employee payroll contribution and out-of- pocket costs.
As a result, employees working beyond age 65 are choosing to enroll in Medicare and coverage that can provide a more affordable option to traditional employer-based coverage.
Under CMS Special Enrollment Period (SEP) guidelines, individuals working beyond age 65 for employers with more than 20 employees, can enroll in Medicare as an option to employer-based health insurance.
Medicare health insurance can cost less than an employee single plan monthly payroll deduction. Plans are available with no or low deductible requirements, provide access to current doctors and hospitals, include 100% coverage for preventative service, prescription, dental, vision hearing benefits as well as telemedicine, transportation, and meal services at no additional cost.
To prevent any “gap or break” in coverage, it is important that the employee enroll and receive approval for Part A and/Part B and Medicare health insurance before ending employer-based coverage.
Develop a Strategy
To develop a “Medicare Strategy” and provide employees with important Medicare information and education, contact your Oswald Companies representative. They will discuss the relationship between employee contribution, plan deductible and out-of-pocket costs with you and determine the number of employees aged 60 to 64 and 65 and older that could benefit from a sponsored “Medicare 101” webinar and Q & A session.
Employees will also have access to the Oswald team of Medicare Specialists at InsureOne Benefits. Free consultative assistance is provided to each employee interested in understanding their Medicare rights, reviewing Medicare plan and cost options and help selecting and enrolling in a Medicare plan that better meets their personal, healthcare and cost-based needs.
Interested in learning how a Medicare Education Webinar can benefit your company and your employees? Just complete the form above and a member of your Oswald Service Team will be in touch.
- Medicare and Individual Insurance: What You Need to Know Now
- Medicare Eligible Employees: Health Insurance Solutions For Employers and Their Workforce
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