Roadmap to Medicare Over Age 65 Retiree

Roadmap to Medicare

Over Age 65, Retiree or Severance Benefits

More information on:

Your Roadmap is based on…

You are over Age 65 and did not enroll in Medicare A (and/or) B at age 65
The Primary Insured is not (or will not be) actively working at the employer providing your benefits
You are (or will be) covered under the group health Retiree plan or Severance Benefits

Recommendation Summary:

Retiree Coverage/Severance benefits are not considered creditable coverage (group coverage based on current active employment).
In order to avoid a late enrollment penalty and have full coverage, we recommend that you enroll in both Part A and Part B as soon as possible.
Schedule your Roadmap to Medicare appointment with an HTA Medicare Advisor if you have not done so already.
Select the enrollment instructions that best applies:
- How to Enroll in Medicare Part A and Part B over age 65
- How to Enroll in Medicare Part B only (already have Part A)

What is my deadline to enroll?

You have a Special Enrollment Period and can enroll anytime after age 65, up to 8 months after your group coverage or the employment that it is based on ends (whichever comes first).

Do I need Medicare to have full coverage?

Yes/Likely. Medicare “Who Pays First” Law states since Retiree plans are not based upon active employment, Medicare becomes the primary insurance once you turn 65.

Even if your Retiree plan says that they will remain the primary insurance and Medicare is not necessary, it may still be worth enrolling in Medicare within enrollment period and penalty timelines so you do not get temporarily locked out or get a penalty if you decide to enroll in Medicare later.

Will I receive a penalty if I don’t enroll now?

Yes. You will receive a late enrollment penalty because your Retiree coverage is not considered creditable coverage to Medicare. Creditable coverage is defined as group coverage based on current active employment. Retiree plans are not based on active employment.

Secondary Insurance Options

Since your Retiree benefits are likely considered secondary insurance to Medicare, you MUST be enrolled in Medicare A and B to have full coverage. You will have the option to keep your Retiree Plan as secondary or elect a Medicare Supplement and Medicare Prescription Drug Plan as secondary.

Medicare or Group Health?
Does it make sense to drop my Retiree plan to enroll in a Medicare Supplement Insurance and a Medicare Prescription Plan?

A general rule of thumb is that if your Retiree plan costs on average less than $150-200/month/person or about $2000-2400/year/person, then your Retiree plan is more cost effective than Medicare.

Please add up the premiums, copays, deductibles and coinsurances (everything except Rx cost) of your Retiree plan for comparison.

However, if you think you may pay more than that, or you are seeking lower deductibles and copays, then you may want to explore a Medicare Supplement further.

Please contact us for a Medicare Cost Analysis to help you better evaluate if your Retiree plan or a private Medicare Supplement and Medicare Prescription plan is more cost effective.

If Medicare Secondary coverage is more cost effective than your Retiree plan, you may want to replace your Retiree plan.

If your employer is paying the premium on your Retiree plan, you may want to approach them to see if they would be willing to reimburse you the amount they are currently paying for your insurance to help you pay for Medicare instead.

Additional Considerations
Underwriting Considerations: Medicare Supplement Insurance has an Open Enrollment Period for the first 6 months that you are enrolled in Medicare Part B. During this time, you will be able to purchase ANY medicare supplement plan with no medical underwriting.

If you stay with your Retiree plan and decide to elect a Medicare Supplement later (when Retiree plan ends, but you have already been on Medicare for more than 6 months) you will have SOME plans available on a Guaranteed Issue basis. There will be less options available that do not require you to answer medical questions to qualify.

Medicare Advantage Plans and Medicare Prescription Drug Plans provide an Initial Election Period when you enroll in Medicare, a Special Election Period when you come off your Retiree plan, and also allow you to change plans once a year during the Annual Election Period (October 15^th through December 7^th) without medical underwriting.

Important HSA Considerations– You cannot continue to contribute to your Health Savings Account (HSA) once you enroll in Medicare Part A. If you are enrolling in Medicare after age 65, your Part A effective date may be back dated up to 6 months. Please contact us to discuss the HSA maximum contribution rate for you circumstances. Click Here for Details and Rules.

This does not apply to Flexible Spending Accounts (FSA) or Health Reimbursement Accounts (HRA). Medicare does not have any restrictions on these types of accounts.