If you are retiring and have employer coverage, then Medicare may or may not be beneficial for you. It’s going to depend on how much your coverage costs, how long you can keep it, and if you have a spouse or dependent that relies on your employer coverage.
When on employer coverage, the first thing to know is if your coverage is “creditable.” This is the term used to identify if your employer coverage is approved by Medicare to pay on average as much as the standard Medicare plan. If it’s “creditable” then your plan is approved by Medicare and therefore you will not have to pay any penalties for not enrolling into any Medicare coverage when first eligible. Your employer is required to let you know if your health and drug coverage is considered “creditable.” If your employer coverage isn’t “creditable” then you may want to enroll into Medicare to avoid any penalties.
Now, even if your employer coverage is “creditable” you may still find Medicare to be a great option in a few situations.
- Does your employer coverage cost you more than $300 per month? If this is the case, you can often enroll into a Medicare supplement plan for less and have most everything covered. The Plan F, for example, pays for 100% of all Medicare copays and coinsurances leaving you nothing to pay in terms of out-of-pocket expenses for all Medicare covered services. You can have Plan F, Medicare Part B, and a Drug Plan for just below $300 per month if you’re 65 years old and just slightly above that if you’re older. A Medicare Advantage Plan can cost you even less than that! Plus if you’re leaving employer coverage, then you’re eligible for guaranteed acceptance, which allows you to enroll in a Medicare Supplement with no underwriting to your health history (since some plans can deny you based on health history if you don’t have a guaranteed acceptance period).
- How long will your employer let you keep their coverage? Some companies kick you off right at 65, working or not. Some let you keep it until you retire, and some let you keep it forever. Obviously, if they let you off at 65 or when you retire, you will need to consider your Medicare options. Even if you can keep it forever or while you’re working, you may want to consider a Medicare option if the cost to keep the plan is too much (as we discussed above).
- Does your spouse and/or any dependents rely on your employer coverage? If so, then you won’t be interested in leaving to a Medicare plan, even if it’s more affordable, until they qualify for Medicare or find other coverage.
All of these reasons should be considered when deciding to keep your employer coverage or not. Whether it’s to stay or leave, help a loved one find coverage or explore your options for peace of mind, we can be a guide to educate and inform your decisions.