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What do I choose to do when I turn 65 and still working? Do I take Medicare, or do I stay with my employer’s benefits?

private insurance or medicare?

Turning 65 can be a very confusing time in a “senior’s” life when deciding not to retire at that point in their life. Active employer coverage means you are still actively working, not retired. In this scenario, you have the right to remain on your employer’s group health insurance plan if you choose.

Your Medicare benefits can coordinate with that coverage. How it coordinates depends on the size of your employer.

Do I get Medicare automatically? Yes and no, depending if you decide to take your Social Security benefits. When you turn age 65 and you decide to retire and receive your benefits you will automatically receive a Medicare card in the mail.

On your card will be your legal name, Medicare ID number and your effective date for Part A which should be the first day of the month of your birthday the year you turn age 65.  At that point it is your responsibility to get in touch with your nearest Social Security office and sign up for Part B.

Medicare Part B comes with a monthly premium. Some beneficiaries who are covered by employer health plans choose to delay enrollment in Medicare Part B.

After that important step it is my job as your broker to assist you in your choices for a Medigap plan and Part D prescription plan. On the other hand, whether you decide to retire or not, and you do not activate your Social Security benefits, you will not automatically be enrolled in Part A.

I point this out because there is a lot of confusion in this step because most folks think they get Part A regardless of what they decide to do.

The bigger question here that really confuses senior’s turning 65 who don’t want to retire is do I keep my employer’s benefits or do I enroll in the Medicare program? That is a big decision and tricky if you’re not careful.

If you make a mistake, it could cost you a lot of money. This is a huge decision and you should be the one to make it, but to make the correct decision you should be getting input from your broker. You need to weigh all the options as to how much money do you contribute to your employer’s benefits vs what a Medigap plan and Part B will cost you monthly.

In a lot of cases after sitting down with folks they realize it cost them more being on their employer’s benefits when they factor in how much they contribute, copays to their physicians etc. In some cases, People want to get off their employer’s benefits for the simple fact that they don’t like needing referrals to see a specialist whereas with Medicare with a gap plan you have an open network throughout the United States.

The biggest thing that I find people are most upset with concerning their employers plan is having a large deductible before their benefits even kick in. The rise of high-deductible plans should trigger a serious study by people about the merits of Medicare – either in addition to employer plans or in place of them.

With most Medigap plans any deductible is usually a much smaller amount. In fact, the current plan G which is the most popular plan has only $183 yearly deductible.

Another factor people should consider is prescriptions and how much they would pay with a Medicare Part D plan against their employer’s plan. Another huge concern for example is what if you turn 65 and want to retire and enroll in the Medicare program but your spouse is covered under your current employer’s coverage but has not yet reached the Medicare age?

In some cases, the employee continues to stay employed so their spouse continues to stay covered because private insurance may just be too much of a cost to bear. Something else to consider is additional coverage such as dental, vision, or hearing.

Let’s talk about COBRA for a moment. Generally, COBRA involves the continuation of benefits coverage after someone is no longer part of the company that had provided those benefits, however for only a limited period which is usually 18 months. It used to be that Medicare acknowledged COBRA as “credible coverage”, now it longer does.

So, when you turn 65 it is imperative that you enroll in Medicare Parts A&B, so you are can avoid being charged a penalty by Medicare. Failure to enroll during your Initial Enrollment Period will result in a lifelong penalty. The penalty amount could go up 10% for every 12-month period when you were eligible for Part B but didn’t enroll. For example, if you waited for four years to sign up, your penalty could be 40% of the premium.

Your existing employer coverage may change your benefit details once you enroll in Medicare, so be sure to check with your employer plan before you decide. When you enroll in Medicare, you’ll also have to complete a questionnaire to help Medicare determine which coverage pays first for your health care.

Joseph-BachmeierDo you have questions about Medicare Advantage or Medigap in 2020?

Joe Bachmeier

(855) 494-0097