347 N. Pottstown Pike, Suite 200 | Exton, PA 19341
610-430-6650
  
Advisors | Individuals | Employers | Contact Us

HTA Insurance

Simplifying complex Insurance decisions

Roadmap to Medicare Over Age 65 Retiree

Customized Roadmap Report

Click on the image to download your 1 page Roadmap

Enrolling in Medicare

After reviewing ALL of the information on this webpage, click on Enroll Now for detailed enrollment instructions based on your situation.

Since Medicare is most likely your PRIMARY Insurance, and you may have penalties and deadlines for not enrolling in Medicare, you may want to...

Enroll Now-Over Age 65

Here is the Request For Employment Information form that you will need to avoid a Medicare Part B penalty when you enroll.

  • Please take this form to the Human Resources Department to complete.
  • You will need a form completed for each spouse that wishes to apply for Medicare.
  • The form confirms you have had creditable coverage since you turned age 65 which will show that you are eligible for enrollment; as well as, waive a late enrollment penalty.

Creditable coverage is verified on the form by:

  • The dates the Employee was Actively Employed.
  • The date you were covered under the Group Health Plan.
  • The start date should reflect the initial enrollment in the group coverage NOT the date of your last enrollment period.

If you have not been covered under the same employer since you turned age 65, you will need an EVF form from each employer that provided group coverage.

Please contact HTA for best practices on how to submit your forms to the social security administration.

If you do not apply in person (ex: mailing/faxing your application or your spouse is visiting the local office on your behalf) a Part B Application is also necessary.

Your Roadmap is based on…

  • You are Over Age 65 and did not enroll in Medicare A (and/or) B at age 65
  • Your 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

Do I need Medicare to have full coverage?

Yes/Likely.  Since Retiree coverage is not based on active employment, it is likely that your Retiree coverage will become secondary coverage and Medicare will become the primary insurance.  If you do not enroll in Medicare, you may not have full coverage.

  • Questions to ask your Retiree plan when retire:
    • Will my benefits change now that I am no longer working?
    • Will my premiums change?
    • Can my spouse get this benefit if I do not enroll?
    • Will benefits and/or premiums change for my spouse should my passing occur first?
    • Will the Retiree plan act as primary insurance or do I need to have Medicare A and B as primary insurance to my plan?

If you wish to defer enrollment in Medicare A and/or B, please confirm from your Retiree plan health insurance carrier (in writing recommended) that they will remain the primary payer or you could have significant gaps in your coverage.

Medicare Rules and Guidelines

Medicare “Who Pays First” Law states since Retiree plans are not based upon active employment, Medicare becomes the primary insurance once you are no longer actively employed through the employer offering benefits.

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.  

Medicare Rules and Guidelines

Part A: If you are eligible for Premium-Free Part A (you or your spouse has paid 40 quarters of Medicare taxes), you WILL NOT receive a Part A Penalty for enrolling after age 65.

  • Since Part A is Premium-Free for many people, they commonly enroll in Part A even if not necessary (special considerations apply if you have an HSA account).

Part B: You will receive a Part B Late Enrollment Penalty if you do not have creditable coverage after age 65.

  • Creditable coverage is group health insurance coverage while the Primary Insured is actively working for the employer providing the Group Health Plan.
    • Severance, COBRA and/or Retiree Plans are not creditable for avoiding the penalty.

A 10% penalty added for every 12 months you go without creditable coverage. Months need not be consecutive. See Details on how the penalty is calculated.

  • The penalty will be assessed on the Base Medicare Premium for as long as you are enrolled in Medicare.

Part D: You will receive a Part D Late Enrollment Penalty if you do not have creditable prescription coverage after age 65.

  • Creditable prescription coverage is drug coverage that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.

A 1% penalty added for every 1 month you go without creditable prescription coverage. Months need not be consecutive.

  • The penalty will be assessed on the Average Medicare Part D Premium for as long as you are enrolled in Medicare Part D.

What is my deadline to enroll?

You can enroll anytime after age 65 up to 8 months after your group coverage or the employment that it is based on ends.

Medicare Rules and Guidelines

Part A: As long as you are eligible for “premium-free” ($0) Medicare Part A, you can sign up for no cost Part A (if you’re eligible) any time during or after your Initial Enrollment Period. Your coverage start date will depend on when you sign up.

  • If you have to pay a premium for Medicare Part A, you can only sign up during a valid enrollment period (see Part B enrollment periods below).

Part B-SEP: You will have an 8 month Special Enrollment Period from the time your group health coverage or the employment that it is based on ends (whichever comes first) to enroll under a Special Enrollment Period.

  • Severance, COBRA and/or Retiree Plans are not based on current employment. Your 8 month SEP starts the date your employment ends. If you have this type of coverage, you will not be eligible for a SEP when it ends if it is outside of 8 months.

Part B-GEP: If you miss your Initial/Special Enrollment Period, you will be able to enroll annually during the General Enrollment Period (however, penalties may apply).

  • The General Enrollment Period is from January 1st to March 31st each year. Your Part B effective date will be July 1st following your enrollment.

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.

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 15th through December 7th) without medical underwriting.

Additional Considerations

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.