Should working employees enroll in Medicare?

Employees who reach age 65 will want to determine whether to stay on the employer's group health plan, enroll in Medicare or perhaps even maintain coverage under both plans. The Age Discrimination in Employment Act (ADEA) prohibits employers with 20 or more employees from cancelling group health coverage for current employees due to age, even when such employees become eligible for Medicare. Some state laws may also prohibit smaller employers from doing so. Therefore, the choice is usually up to the employee, but it may be a confusing one. 

Employers can help by sharing resources to enable employees to make informed and meaningful decisions. SHRM's For Employees Approaching Retirement, Health Coverage Decisions Loom will help employers understand the issues and decisions that employees need to make. State Health Insurance Assistance Programs offer a national network to free, Medicare enrollment counseling and assistance you can direct employees to.

Additionally, the Transamerica Center for Health Studies' chart, Understanding Medicare, provides a quick review of the various Medicare offerings and timelines for enrollment. The federal Medicare.gov website offers more in-depth information, including searching for providers, hospitals, prescription drug coverage and more. AARP's website also provides helpful tools for understanding Medicare options. Ensure your employees have a current copy of the employer's summary plan description or summary of benefits and changes to enable an easier comparison.

Employees may wish to make a rank-ordered list outlining the features most important to them and then compare those to Medicare coverage. Some of the questions to address may include:

• How do the costs (premiums, co-pays, out-of-pocket limitations, etc.) compare?
• What is the scope of coverage, and will coverage be similar?
• Do the employee's current providers accept Medicare? How important is this to the employee?
• Does the employee have dependents who would lose coverage under the group plan if he or she elects Medicare?
• Which services and options does the employee use most under the group plan, and are these covered under Medicare and at similar rates?

In addition, employees should be aware that if they elect Medicare Parts B and D and remain on the employer's plan, Medicare is usually considered the "secondary payor." This option could be expensive and may not provide additional coverage. Share with employees the following resource from the Medicare website: Medicare and Other Health Benefits: Your Guide to Who Pays First.

Additional Resources:

Centers for Medicare & Medicaid Services employer web page

Fact Sheet: Medicare decisions for someone nearing age 65

Fact Sheet: Deciding whether to enroll in Medicare Part A or Part B when you turn 65

Fact Sheet: Medicare Decisions for Those Over 65 and Planning to Retire in the Next 6 Months