Introduction:
Here you are approaching your 65th birthday. Congratulations – you have become very popular suddenly! You are getting cold calls from ‘friends’ you’ve never met six states away, emails and piles of mail related to signing up for your Medicare benefits. However, if you are still working, should you? Do you even need to sign up for Medicare? And if you do sign up, what happens to your employer plan? What happens if you have a Health Savings Account at work? Here are some points to consider in making your decision. And by the way, the person on the phone cold calling you from six states away will not ask you all these questions and take the time to ensure you and your family are protected! #callyourlocalagent
Decision Factor #1
The most important factor in this decision is to be sure your employer coverage is considered ‘creditable’ coverage according to Medicare standards. Only your HR department will know this for sure. In most cases, if your company employs over 20 people, it is considered creditable. However, we would advise you still check this with your HR administrator. If the employer plan is considered ‘creditable’, you can choose to stay on the employer plan even after you turn 65 without risk of a penalty down the road. So be sure to ask HR. In rare cases where your employer coverage is not creditable or in the case of you being self-employed, you should proceed with signing up for Medicare.
Decision Factor #2
You have and are contributing to a Health Savings Account as part of your employer plan. Something that most people do not know is that if you choose to sign up for Medicare, even if just Part A, at that point you can no longer contribute to your Health Savings Account. You can keep the balance that you have accumulated at that moment and use it towards healthcare expenses, but you cannot put any more money in that account. So, if you want to keep contributing due to the tax advantages, do not sign up for Medicare – A OR B.
Decision Factor #3
Start crunching the numbers! Get with an agent to compare Medicare premiums and out of pockets max amounts to that of your employer plan. In addition, most people do not realize that Medicare Advantage Plans have NO deductible. Medigap plans only have a one-time per year deductible of $203 [in 2021]. So even if the Part B premium plus plan premiums for Supplemental or Advantage Plans are a bit more than your employer premium, there is no large deductible. So, you may still be better off with Medicare should something major happen.
Decision Factor #4
Are you covering any family members on your employer plan? In most cases, your spouse and/or any dependents that you cover on your employer plan can not keep that coverage if you come off the employer plan to elect Medicare. There are other options for your family members such as marketplace or private insurance coverage, however, those can be much more expensive than the employer and Medicare. It may be in the best interest of the ‘family unit’ to stay on the employer plan.
Conclusion:
We have helped many clients sign up for Medicare and take advantage of lower premiums, little to no deductible and less out of pocket expenses than an employer plan. However, there have been instances where we advised potential clients to stay on the employer plan as long as it is creditable, and they plan to continue to work. As always, we encourage you to do all of this through an expert. We are free of charge for you and will then be your advocate! For more information, email me at carrie@cdi-cares.com or check me out on www.cdi-cares.com