Medicare Overview
Medicare and Employer Coverage
Navigating how Medicare works with your current employer health plan can be confusing, but you don’t have to figure it out alone. We are here to help you understand your options and make the right choices for your situation. Our goal is to provide clear, supportive guidance so you can feel confident about your healthcare coverage as you approach age 65 and beyond.
Keep reading or jump to our Highlights and Frequently Asked Questions.
How Does Medicare and Employer Insurance Coverage Work?
Deciding whether to enroll in Medicare while you are still working involves several important considerations. The rules depend largely on the size of your employer and the type of coverage you have. We’ve broken down the key details to help you understand how these two types of insurance can work together and what decisions you might need to make.
How Medicare Interacts with Your Current Plan
The relationship between Medicare and employer insurance coverage is determined by who pays first, known as the “coordination of benefits.”
- For Employers with 20 or More Employees: If you are 65 or older and have group health plan coverage through your current employer, your employer plan is the primary payer. This means it pays your health claims first. Medicare is the secondary payer and covers costs that your primary plan doesn’t. In this case, many people choose to delay enrolling in Medicare Part B to avoid paying the monthly premium.
- For Employers with Fewer Than 20 Employees: If your employer has fewer than 20 employees, Medicare is the primary payer once you turn 65. Your employer’s plan becomes the secondary payer. In this situation, you will likely need to enroll in both Medicare Part A and Part B when you are first eligible to ensure you have full coverage and avoid potential gaps or penalties.
Key Considerations if You’re Working Past 65
If you plan to continue working after your 65th birthday, it’s crucial to evaluate your options carefully.
- Compare Costs: Look at the total costs of your employer plan (premiums, deductibles, copays) versus the costs of enrolling in Medicare. For some, sticking with an employer plan is more affordable, while for others, Medicare may be a better financial choice.
- Health Savings Accounts (HSAs): You cannot contribute to an HSA once you enroll in any part of Medicare. If you wish to continue contributing to your HSA, you must delay enrolling in both Part A and Part B.
- COBRA and Retiree Coverage: If you have COBRA or retiree health coverage, the rules are different. Medicare generally pays first in these situations, so you will need to sign up for Medicare when you become eligible to avoid coverage gaps.
Transitioning from Employer Coverage to Medicare
When you decide to retire or leave your job, you will be able to enroll in Medicare through a Special Enrollment Period (SEP).
- Step 1: Notify your employer benefits administrator about your retirement date to understand when your health coverage will end.
- Step 2: Use your eight-month Special Enrollment Period to sign up for Medicare Part B (and Part A, if you haven’t already) without a late enrollment penalty. This SEP starts the month after your employment or group health plan coverage ends, whichever happens first.
- Step 3: Once enrolled in Original Medicare, you can choose to add a Part D prescription drug plan or select a Medicare Advantage (Part C) plan.
Medicare Can Be Confusing
We understand. That's why we wrote a simple guide to help you decipher the terms, makes sense of the options and gain enough insight to make an informed decision.
If you're not ready to reach out to Bob and the Insurance Connection team, please grab your free copy of The ABC’s & D of Medicare. Learn More
Medicare and Employer Coverage
Frequently Asked Questions
Do I have to sign up for Medicare at 65 if I'm still working?
Not always. If you have qualifying health coverage from an employer with 20 or more employees, you can often delay enrolling in Medicare Part B without incurring a late enrollment penalty. However, it’s a good idea to enroll in Part A, as it is premium-free for most people.
Can my employer require me to enroll in Medicare?
No, if your employer has 20 or more employees, they cannot require you to enroll in Medicare to keep your employer-sponsored health plan. This is to ensure you can choose the coverage that works best for you without being forced onto Medicare.
What happens if I enroll in Medicare Part A but delay Part B?
Many people who are still working choose to do this. Enrolling in premium-free Part A can help cover some hospital costs that your employer plan might not. You can then sign up for Part B later during your Special Enrollment Period when you stop working. Just remember, you can’t contribute to an HSA once you have Part A.
Insurance Connection USA is a division of Garrison Enterprises a licensed Insurance agency and not connected with or endorsed by the United States government or the federal Medicare program. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options. Medicare has neither reviewed nor endorsed this information. Not connected with or endorsed by the United States government or the federal Medicare program.
Important Highlights
If your employer has 20 or more employees, your employer plan pays first, and you may be able to delay Medicare enrollment.
You cannot contribute to an HSA after enrolling in any part of Medicare.
When you stop working, you will get a Special Enrollment Period to sign up for Medicare without penalty.
Contact Medicare Support
Monday – Friday
9:00am – 5:00pm CST
Click to Call:
940-382-4700