Medicare considerations for person with employer insurance

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AdamP
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Medicare considerations for person with employer insurance

Post by AdamP » Wed Nov 14, 2018 4:19 pm

My parent is turning 65 next year, so will be eligible for Medicare. However, there are two additional considerations: They have been receiving retiree benefits (medical, dental, vision) from a previous employer for many years, and they also receive some benefits (vision) from a current part-time employer. Since it was brought to my attention that the enrollment period is closing soon for any retiree benefit changes, I realized I should skip straight to the most knowledgeable people. All I know is that there are multiple parts of Medicare. However, most of the simple literature assumes the enrollee has completely retired, and Medicare is the only option for them, which isn't applicable in this situation.

I should add that there is no consideration of full retirement (i.e. not working at all) in the next few (hopefully many) years.

(I should've done this about 2 months ago)

vested1
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Re: Medicare considerations for person with employer insurance

Post by vested1 » Wed Nov 14, 2018 4:35 pm

The answer is highly dependent on the individual plan. Most retiree plans force the former employee to transition to Medicare, parts B, supplemental and Part D, or Medicare Advantage for supplemental and prescription coverage if available in your area. For active workers most employer plans continue to cover the employee without the need to transition to Medicare at age 65.

I would suggest having your parent contact their retiree medical plan administrator immediately to ensure that they will not be forced onto Medicare parts B, and/or any Medicare supplemental insurance at age 65. If the administrator says they will still cover your parent as primary insurance or supplemental make sure that the coverage is "creditable", meaning it is as good or better than Medicare. The plan is required to send your parent a letter stating if their coverage past Medicare age is creditable or not. This is important because your parent can be permanently penalized on Medicare supplemental (Part D) coverage if they delay signing up and/or don't have other creditable coverage.

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dm200
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Re: Medicare considerations for person with employer insurance

Post by dm200 » Wed Nov 14, 2018 5:21 pm

The way I understand he post, the parent is not receiving related benefits from the employer -- but rather retiree benefits from a previous employer.

I would lean strongly (unless it is otherwise clear) to enrolling in Medicare - parts A and B. Then, investigate whether a Medicare Advantage (with drug coverage) makes the most sense OR whether the person should get part D (drugs) and a Medigap Supplement.

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Artsdoctor
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Re: Medicare considerations for person with employer insurance

Post by Artsdoctor » Wed Nov 14, 2018 6:10 pm

AdamP wrote:
Wed Nov 14, 2018 4:19 pm
My parent is turning 65 next year, so will be eligible for Medicare. However, there are two additional considerations: They have been receiving retiree benefits (medical, dental, vision) from a previous employer for many years, and they also receive some benefits (vision) from a current part-time employer. Since it was brought to my attention that the enrollment period is closing soon for any retiree benefit changes, I realized I should skip straight to the most knowledgeable people. All I know is that there are multiple parts of Medicare. However, most of the simple literature assumes the enrollee has completely retired, and Medicare is the only option for them, which isn't applicable in this situation.

I should add that there is no consideration of full retirement (i.e. not working at all) in the next few (hopefully many) years.

(I should've done this about 2 months ago)
Adam,

There's a lot of Medicare questions on this site recently!

Please print out one of the many Medicare pamphlets and go over it with your parent:

https://www.ssa.gov/pubs/EN-05-10043.pdf

Your parent will not be receiving healthcare benefits because of CURRENT EMPLOYMENT, but rather as a retirement benefit. This is the key here. Unless the benefit is through current employment under specific circumstances, your parent will have to enroll in Medicare. If he/she does not, there will be a penalty which may be lifelong. The pamphlet will be give you the basics; please read it very carefully.

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Artful Dodger
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Re: Medicare considerations for person with employer insurance

Post by Artful Dodger » Wed Nov 14, 2018 6:22 pm

vested1 wrote:
Wed Nov 14, 2018 4:35 pm
The answer is highly dependent on the individual plan. Most retiree plans force the former employee to transition to Medicare, parts B, supplemental and Part D, or Medicare Advantage for supplemental and prescription coverage if available in your area. For active workers most employer plans continue to cover the employee without the need to transition to Medicare at age 65.

I would suggest having your parent contact their retiree medical plan administrator immediately to ensure that they will not be forced onto Medicare parts B, and/or any Medicare supplemental insurance at age 65. If the administrator says they will still cover your parent as primary insurance or supplemental make sure that the coverage is "creditable", meaning it is as good or better than Medicare. The plan is required to send your parent a letter stating if their coverage past Medicare age is creditable or not. This is important because your parent can be permanently penalized on Medicare supplemental (Part D) coverage if they delay signing up and/or don't have other creditable coverage.

Clear as mud? Join the crowd.
I agree. And, it totally depends on the requirements of the retire medical plan your parent is enrolled in. The plan should be informing him of his responsibilities concerning Medicare A, B, and D. Most commonly, they will require enrollment in A and B, and the retiree plan will provide either supplemental or carve out medical coverage plus creditable part D coverage for RX. There are other scenarios, but that's the most common. There are deadlines for Medicare enrollment, and most people will sign up for Part A because there is no cost, but if he doesn't enroll in Part B, and the plan requires it, he'll have a gap in coverage until the next date he is eligible for enrollment, as well as being on the hook for potential late enrollment penalties. As previously noted, penalties for late enrollment in Part D may apply if he's not receiving creditable coverage thru the retiree plan.

As vested1 also notes, there is the other possibility the plan will terminate at age 65, and he'll need to enroll in Medicare A&B, and get either a supplement with Part D RX or some type of Medicare advantage plan.

retiredjg
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Re: Medicare considerations for person with employer insurance

Post by retiredjg » Wed Nov 14, 2018 6:32 pm

AdamP wrote:
Wed Nov 14, 2018 4:19 pm
My parent is turning 65 next year, so will be eligible for Medicare. However, there are two additional considerations: They have been receiving retiree benefits (medical, dental, vision) from a previous employer for many years....
There is a good possibility that these benefits will change when your parent becomes eligible for Medicare. Meaning, Medicare may become the primary insurance provider and the old plan will become the secondary provider. This is something you need to find out before making other decisions. It is unlikely that the old insurance will continue on as primary.

All I know is that there are multiple parts of Medicare. However, most of the simple literature assumes the enrollee has completely retired, and Medicare is the only option for them, which isn't applicable in this situation.
For me, what changed is who was the primary insurer and who was the secondary insurer.

Prior to 65, my old employer policy was primary and I didn't have Medicare. After joining Medicare, my old employer policy became the second insurance....if I kept it...and Medicare became the primary provider.

I did keep it so I pay for both (old employer's insurance and Medicare Part B both). However, I have no medical bills - no co-pays and no-deductible. I do have co-pays for prescriptions. I don't know if this is common or not, but if I have a catastrophic illness, I expect to pay nothing more than my 2 insurance premiums.

You need to talk to a SHIP advisor. They should be available everywhere. SHIP is your State Health Insurance Assistance Program. These people are specially trained state employees and civilian volunteers who help people with decisions like yours about Medicare.

https://www.medicare.gov/contacts/#sear ... %20Program


If the old employer health insurance plan will continue to cover your relative as a secondary provider, that could be a very good choice if it is not very expensive.

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Artsdoctor
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Re: Medicare considerations for person with employer insurance

Post by Artsdoctor » Wed Nov 14, 2018 6:47 pm

It's important to read the Medicare rules. If you are currently receiving health insurance as a retirement benefit (i.e., not actively working), then you must sign up for Medicare during your enrollment period. If you don't want to wade through government websites to start, you can read about it from a different angle:

https://medicare.com/resources/medicare ... -coverage/

As others have mentioned, sometimes a retirement plan can be used as your secondary insurance, but you must still sign up for Medicare when eligible.

AdamP
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Re: Medicare considerations for person with employer insurance

Post by AdamP » Wed Nov 14, 2018 10:28 pm

Ahh.. page 12 of EN-05-10043 clearly says:
COBRA and retiree health coverage don’t count as current employer coverage.
So, the retiree health coverage they currently have doesn't allow them to not enroll in (or delay enrollment of) Part B.

Although my parent does have vision insurance through their current employer, they do not have medical insurance. That is currently, as a part-time employee. What if they go full-time, and are now, conceivable, eligible for medical benefits through their current employer? (This, admittedly, is not a guarantee, but has been discussed with the employer.)

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dm200
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Re: Medicare considerations for person with employer insurance

Post by dm200 » Thu Nov 15, 2018 9:53 am

AdamP wrote:
Wed Nov 14, 2018 10:28 pm
Ahh.. page 12 of EN-05-10043 clearly says:
COBRA and retiree health coverage don’t count as current employer coverage.
So, the retiree health coverage they currently have doesn't allow them to not enroll in (or delay enrollment of) Part B.

Although my parent does have vision insurance through their current employer, they do not have medical insurance. That is currently, as a part-time employee. What if they go full-time, and are now, conceivable, eligible for medical benefits through their current employer? (This, admittedly, is not a guarantee, but has been discussed with the employer.)
Depending on the employer and other details, the employer may require those eligible for Medicare be enrolled in Medicare Part B.

ResearchMed
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Re: Medicare considerations for person with employer insurance

Post by ResearchMed » Thu Nov 15, 2018 9:58 am

dm200 wrote:
Thu Nov 15, 2018 9:53 am
AdamP wrote:
Wed Nov 14, 2018 10:28 pm
Ahh.. page 12 of EN-05-10043 clearly says:
COBRA and retiree health coverage don’t count as current employer coverage.
So, the retiree health coverage they currently have doesn't allow them to not enroll in (or delay enrollment of) Part B.

Although my parent does have vision insurance through their current employer, they do not have medical insurance. That is currently, as a part-time employee. What if they go full-time, and are now, conceivable, eligible for medical benefits through their current employer? (This, admittedly, is not a guarantee, but has been discussed with the employer.)
Depending on the employer and other details, the employer may require those eligible for Medicare be enrolled in Medicare Part B.
Or Part A (ours does).

RM
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Lynette
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Re: Medicare considerations for person with employer insurance

Post by Lynette » Thu Nov 15, 2018 10:24 am

It really depends on the details of the Employers' Health care plans. I received an incentive from my current employer to use a healthcare plan from my previous employer. But this changed when I turned 65 and the former plan required me to enroll into Medicare. So I enrolled in my current employer's health plan which did not allow for any benefit from the previous employer. I only enrolled in Medicare A as I was getting health care from my employer. When I retired in my seventies, I had to enroll in Medicare B and provide evidence that I had credible health care insurance through my employer. This was a pain as Medicare and my employer were not up-to-date as to what needed to be done to get this proof. I also enrolled in Part D and a Medigap plan.

I get a benefits (HRA) from both former employers. I have to enroll in an Exchange to obtain these supplements.

So it really depends on the terms of the employer's healthcare plan.

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dm200
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Re: Medicare considerations for person with employer insurance

Post by dm200 » Thu Nov 15, 2018 10:26 am

Lynette wrote:
Thu Nov 15, 2018 10:24 am
It really depends on the details of the Employers' Health care plans. I received an incentive from my current employer to use a healthcare plan from my previous employer. But this changed when I turned 65 and the former plan required me to enroll into Medicare. So I enrolled in my current employer's health plan which did not allow for any benefit from the previous employer. I only enrolled in Medicare A as I was getting health care from my employer. When I retired in my seventies, I had to enroll in Medicare B and provide evidence that I had credible health care insurance through my employer. This was a pain as Medicare and my employer were not up-to-date as to what needed to be done to get this proof. I also enrolled in Part D and a Medigap plan.

I get a benefits (HRA) from both former employers. I have to enroll in an Exchange to obtain these supplements.

So it really depends on the terms of the employer's healthcare plan.
Yes - and it can get very complicated :(

vested1
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Re: Medicare considerations for person with employer insurance

Post by vested1 » Thu Nov 15, 2018 11:02 am

Lynette wrote:
Thu Nov 15, 2018 10:24 am
It really depends on the details of the Employers' Health care plans. I received an incentive from my current employer to use a healthcare plan from my previous employer. But this changed when I turned 65 and the former plan required me to enroll into Medicare. So I enrolled in my current employer's health plan which did not allow for any benefit from the previous employer. I only enrolled in Medicare A as I was getting health care from my employer. When I retired in my seventies, I had to enroll in Medicare B and provide evidence that I had credible health care insurance through my employer. This was a pain as Medicare and my employer were not up-to-date as to what needed to be done to get this proof. I also enrolled in Part D and a Medigap plan.

I get a benefits (HRA) from both former employers. I have to enroll in an Exchange to obtain these supplements.

So it really depends on the terms of the employer's healthcare plan.
Our circumstance was similar, in that my wife and I were both covered by retiree insurance past Medicare age which allowed us both to avoid Medigap and part D. Until they didn't. My former megacorp employer was first to transition post Medicare age retirees to Medicare only, but dangled the carrot of a combined $4,200 HRA (member and spouse) to quash complaints while softening the blow.

My wife's former employer just followed suit, and ended non-Medicare coverage for those over age 65 as of 1/1/19. They offered a combined $7,000 HRA. The rules of each employer's plan state that you must have either Medigap or Part D to get the HRA for both spouses, so we both have Medigap through my wife's and Part D through my own former employer for a combined $11,200 in HRA reimbursement. Since this change of policy increases our premiums and co-pays by about 250% next year to nearly 12k, not including deductibles, the HRA's are very appreciated.

However, there is no guarantee from either company that the HRA offerings will continue, which is the Sword of Damocles dangling over our heads. We were both bargained employees, and when we were active employees we fought for the rights of retirees as well as our own. Sadly, that practice has been abandoned by current employees, and the terms of our retiree benefits continue to be eroded without recourse.

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Re: Medicare considerations for person with employer insurance

Post by Spirit Rider » Thu Nov 15, 2018 12:47 pm

Artsdoctor wrote:
Wed Nov 14, 2018 6:47 pm
It's important to read the Medicare rules. If you are currently receiving health insurance as a retirement benefit (i.e., not actively working), then you must sign up for Medicare during your enrollment period. If you don't want to wade through government websites to start, you can read about it from a different angle:

https://medicare.com/resources/medicare ... -coverage/

As others have mentioned, sometimes a retirement plan can be used as your secondary insurance, but you must still sign up for Medicare when eligible.
As has been stated this is entirely dependent on the retiree health plan rules. While COBRA and retiree health coverage don’t count as current employer coverage. That does not mean that you must sign up for Medicare Parts B and D whern you turn 65 if you have retiree health coverage.

It simply means that if you do not enroll in Parts A and B, you will be subject to the 10% per 12 month period until late enrollment.

If your retiree health plan does not provide similar coverages you most definitely want to sign up for Parts B and D

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Artsdoctor
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Re: Medicare considerations for person with employer insurance

Post by Artsdoctor » Thu Nov 15, 2018 5:52 pm

Spirit Rider wrote:
Thu Nov 15, 2018 12:47 pm
Artsdoctor wrote:
Wed Nov 14, 2018 6:47 pm
It's important to read the Medicare rules. If you are currently receiving health insurance as a retirement benefit (i.e., not actively working), then you must sign up for Medicare during your enrollment period. If you don't want to wade through government websites to start, you can read about it from a different angle:

https://medicare.com/resources/medicare ... -coverage/

As others have mentioned, sometimes a retirement plan can be used as your secondary insurance, but you must still sign up for Medicare when eligible.
As has been stated this is entirely dependent on the retiree health plan rules. While COBRA and retiree health coverage don’t count as current employer coverage. That does not mean that you must sign up for Medicare Parts B and D whern you turn 65 if you have retiree health coverage.

It simply means that if you do not enroll in Parts A and B, you will be subject to the 10% per 12 month period until late enrollment.

If your retiree health plan does not provide similar coverages you most definitely want to sign up for Parts B and D
I agree that one can conceivably do anything he might like. But I'm not sure that I'd say "it simply means that . . . " because the penalties can be harsh.

If you don't sign up when you're eligible and you don't have what Medicare considers an acceptable reason, you:

1. May have to wait for the General Enrollment Period to sign up (January 1 to March 31). This means that if you do happen to lose your coverage in August 2018, for example, after having missed your initial sign-up deadline, you can't sign up until that General Enrollment Period. Furthermore, you won't even have coverage until July 1, 2019, after you've signed up during that General Enrollment Period.

2. Will be subject to penalties which can be significant, as you pointed out. For each 12-month period that you are "late" in signing up, you'll be assessed a 10% penalty in the form of increased premiums for the rest of your life. So if you happen to keep that retiree coverage for three years and then discover that you should have signed up for Medicare at 65, you'll have a 30% penalty that you'll be paying for as long as you have Medicare Part B.

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dm200
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Re: Medicare considerations for person with employer insurance

Post by dm200 » Fri Nov 16, 2018 9:57 am

Seems to me that these late enrollment penalties are relatively harsh - since they continue for the rest of your life.

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