Will you be turning 65 soon but are still working and plan to keep your job? If so, you’re not alone as nearly 19 percent of age 65 and older Americans are still employed. If you’re like most people your age, you may be wondering if you can drop your employer health insurance for Medicare. Although the answer to this question is usually “yes”, there are several factors you need to consider before you can know if it’s a good idea.
1. The Size of Your Company
Your employer is required, by law, to keep covering you for medical healthcare costs, regardless of your age, as long as you continue to work. In other words, you won’t be forced to take Medicare, provided you’re still employed. However, if your company is small, having fewer than 20 employees, you do need to enroll in Medicare since this will become your primary health insurance, while your company insurance plan becomes your secondary payer. It could also provide coverage for items not covered by Medicare.
2. What’s Covered in Medicare Part A
Usually, it makes sense to enroll in Medicare Part A as soon you qualify even if you’re still covered by your employer.
- Part A provides coverage for necessary hospital costs, restricted home health care as well as nursing care in a facility under specific situations and hospice care.
- Because Part A doesn’t have a premium, there’s no cost involved, so you may as well take advantage of the benefits that are offered. If you or your spouse have a work history of at least 10 years (40 quarters) while paying taxes for Medicare, you’re qualified for Medicare Part A coverage.
- You should still get in touch with our employer to make sure if you’re required to enroll for Part A. If you do sign up for Medicare Part A once your employer medical coverage has ended, you’ll be eligible for a Special Enrollment Period.
3. Medicare Part B Benefits
If you’re still covered by your employer, perhaps you’re asking if you should sign up for Medicare Part B medical insurance.
- Unlike Part A, Medicare Part B does have a monthly premium.
- Thus, some employees with employer health insurance plans decide not to enroll in Part B.
- Consider that if you sign up for the Part B Medicare Initial Enrollment Period, you’ll have to pay a penalty for late enrollment.
- The only exception is if you have a situation qualifying you for what’s known as Medicare Special Enrollment Period.
4. Medicare Advantage Plan
Also known as Medicare Part C, Medicare Advantage is another option for getting Medicare Part A and Part B benefits (Original Medicare), with the exception for hospice care, which is covered by Part A.
- Generally, most Medicare Advantage plans cover prescription drugs.
- What’s more, many Medicare Advantage Plans provide coverage for routine eye care and other benefits.
- The same guidelines for enrollment apply if you still have insurance coverage from your employer, except for the Special Enrollment Period.
5. Both Medicare and Employer Coverage
- If you sign up for Medicare and keep your employer plan, there’s a procedure that determines which insurance is to be your primary payer.
- For example, if your employer insurance plan is the one that is decided as your primary insurer, it pays the cost of your healthcare expenses first.
- Then, Medicare covers a specific amount of the remaining costs that are Medicare-approved.
The Bottom Line
- Because enrolling in Medicare can mean changes in your existing medical insurance plan, check your company plan before making a decision.
- Even though you can drop your employer health insurance for Medicare, it may not be your best option. In most cases, older employers do better by keeping their existing company healthcare plans.
- Consider that keeping your employer insurance plan can mean maintaining the benefits that you and your dependents may need.
- But after doing research, and you determine that your best option is Medicare, then drop your employer coverage.
- Just realize this decision can’t be reversed, so be sure you make the right choice.
- Keep in mind that you’ll have to make payments to Medicare every three months.
As insurance decisions can often be complicated, many people turn to insurance pros when making choices. You don’t have to worry about making the right choice when you let ICUSA do the shopping. At ICUSA, we handle a lot of Medicare consulting, helping our clients determine tricky transitions. Please contact us.