Navigating health insurance options can be confusing, especially as you approach retirement age. Take a situation when a spouse is approaching age 65 and will be eligible for Medicare, but the other spouse would like to continue working for an additional 5 years and may have access to health insurance through an employer. The question is, should you both stay on your employer plan or enroll in Medicare?
Firstly, let’s consider the options available to the spouse approaching age 65. When they turn 65, they will be eligible for Medicare. They can enroll in Medicare Part A (hospital insurance) and Part B (medical insurance) during the Initial Enrollment Period (IEP) which starts three months before their 65th birthday and ends three months after. They can also consider enrolling in a Medicare Advantage plan or a Medicare Supplement plan, which can provide additional coverage beyond what Original Medicare offers.
Now, for the other spouse, they have the option to continue working for an additional 5 years and may have access to health insurance through your employer. As long as the employer has 20 or more employees, they are required to offer health insurance coverage to their employees who are 65 or older. This means that that person can choose to stay on their employer’s health plan or enroll in Medicare, but you cannot do both. If the employer has fewer than 20 employees, you may need to enroll in Medicare when you turn 65. In this case, Medicare would be your primary insurance, and your employer’s plan would be secondary. Your spouse will also need to enroll in Medicare when they turn 65 if your employer has fewer than 20 employees.
It’s important to understand these differences because they can affect your out-of-pocket costs and coverage options. For example, if your employer’s plan covers fewer medical services or has higher copayments and deductibles than Medicare, you may have to pay more out-of-pocket costs if you choose to stay on your employer’s plan.
Here are some factors to consider when deciding between staying on your employer’s plan or enrolling in Medicare:
-
Cost: Compare the cost of your employer’s plan with the cost of enrolling in Medicare. Consider premiums, deductibles, copayments, and out-of-pocket maximums.
-
Coverage: Review the benefits of your employer’s plan and Medicare to see which plan covers your medical needs better.
-
Provider network: Check if your preferred healthcare providers are in-network for both your employer’s plan and Medicare.
-
Enrollment process: Consider the ease of enrolling in your employer’s plan versus enrolling in Medicare.
It is important to note that if you choose to stay on your employer’s plan, your spouse looking to retire would not be able to enroll in Medicare until they stop working and loses their employer-sponsored health insurance. This is called a Special Enrollment Period (SEP), and it allows individuals to enroll in Medicare without facing any penalties for late enrollment.
In conclusion, whether you should stay on your employer’s plan or enroll in Medicare depends on your individual situation, including your cost, coverage, and provider network preferences. It is essential to weigh your options carefully and make an informed decision.
Medicare-Adviser.com can help you with many aspects of Medicare, including coverage options, enrollment periods, and how to get the most out of your Medicare coverage. It publishes free educational resources articles covering all aspects and parts of Medicare including Medicare Advantage plans, Medicare Supplement plans as well as Prescription Drug plans (Part D). With help, you can have peace of mind and focus on your retirement and health rather than worrying about the complexity of Medicare. Medicare-Adviser.com offers FREE consultations and can also connect you with a FEE-ONLY (non-commissioned) professional. Individuals looking for help can also visit 1800ADVISER.COM to browse biographies of individual Medicare experts and choose one or more to connect with.
________________
About Us
Founded in 1998, The Independent Adviser Corporation has assisted thousands of individuals, families, and businesses. We are 100% independent and objective and offer free private consultations. It publishes free investment research and educational materials, and when financial or legal advice is needed, it connects clients with a network of FEE-ONLY professionals. For more information, become a member or to schedule a free consultation, visit its website at TheAdviser.com or 1800ADVISER.COM.