Medicare is complicated. There are so many confusing messages out there about Medicare plans and programs, and even more confusing are the special circumstances that affect when someone should enroll in Medicare. Unfortunately, not knowing the details of Medicare can cause someone to get stuck with a lifelong late penalty, gaps in coverage, and/or tax penalties.
Human Resource professionals have enough to manage in their day to day without worrying about Medicare details. Every HR Manager can benefit from working with a dedicated Medicare advisor to alleviate stress and potential added costs.
With rising health-care costs, health-care reform, and huge growth in the Medicare population (Baby Boomers), fewer employers are offering group Medicare benefits. That means more people are buying their own individual coverage when they become eligible for Medicare. With so many options and carriers, there is a lot to consider.
Employee Medicare Questions? They’ll Ask HR!
Employees and retirees need information about transitioning to Medicare from employer-sponsored healthcare, so they often turn to their company’s HR staff with questions. However, it’s not your role as an HR manager to advise them.
Because all the rules are so nuanced, incorrect information is sometimes shared which can pose major issues with costs and coverage for the individual enrolling in Medicare.
That’s where a Medicare specialist comes in! A dedicated Medicare advisor takes the burden off of you and your HR staff and helps your employees get the answers they need.
Working with a Medicare specialist can help smooth the transition of employees to Medicare while also working to minimize the costs to the employer. A dedicated Medicare advisor can offer a set of services to employers who don’t provide retiree benefits and become their preferred Medicare resource.
Additionally, it engages employees/retirees who need help understanding their Medicare options and who are in the market for the Medicare products and services you provide.
How a Medicare Specialist Adds Value to HR & Employees
Value to Employers and HR Staff:
- Saves time and trouble by relieving HR staff of the responsibility of explaining Medicare and researching for answers to employee questions.
- Saves money for the company as older employees and retirees move off the group plan to an appropriate individual plan.
- Provides a value-added service at no extra cost to the company or the employee.
Value to Employees and Retirees:
- Boost confidence by having a licensed professional help navigate the Medicare enrollment process and options.
- Provides convenience by offering worksite access to information and support, as well as support for spouses and other family members.
- Provides ongoing support via annual plan consultation for those who enroll.
Working Employees Past Age 65 and Medicare
If you (or your spouse) are still working past the age of 65, Medicare works a little differently.
Whether you need to sign up for Medicare depends on two important factors:
1) how you get your health insurance now and
2) the number of employees that are in the company where you (or your spouse) work.
To clarify, as this causes some confusion, ‘working’ means active employment, not retired.
If you (or your spouse) work for an employer or company with 20 or more employees and are enrolled in their group health insurance plan, you can delay Medicare enrollment without penalty.
On the other hand, if you (or your spouse) work for an employer or company with less than 20 employees, typically, you will need to sign up for Medicare when you turn 65 to avoid penalties and to ensure your insurance claims are paid.
This all boils down to what Medicare considers ‘creditable coverage’ and who pays claims first, Medicare or the group insurance plan.
If your (or your spouse’s) employer or company has less than 20 employees:
- Medicare pays for services first, and your job-based insurance pays second.
- If you don’t sign up for Part A and Part B, your job-based insurance might not cover the costs of the services you get. And you may incur a late enrollment penalty for Medicare.
If your (or your spouse’s) employer or company has more than 20 employees:
- Your job-based insurance pays first, and Medicare pays second.
- In this situation, you do not need to enroll in Medicare.
- If you qualify for premium-free Part A, you can (and should) enroll in Part A only.
- As for Part B, you can wait until you stop working (or lose your health insurance, if that happens first) to sign up, and you won’t pay a late enrollment penalty.
Employer-Sponsored HSA and Medicare
A very important detail for those who fall into this category: If you contribute to a Health Savings Account (HSA), you should not enroll in Part A. You cannot contribute to an HSA and also be enrolled in Medicare. If you do, you may be subject to tax penalties.
If you (or your spouse) get a stipend from your employer to buy your own health insurance. OR you (or your spouse) are still working, but don’t have health insurance through that job:
- Generally, that isn’t considered ‘creditable coverage’ and you need to enroll in Medicare.
- Once you sign up, Medicare pays first.
- Some private insurance has rules that lower what they pay (or don’t pay at all) for insurance services you get if you’re eligible for other coverage, like Medicare. Meaning they will not cover your claims.
If you have COBRA:
- Sign up for Medicare when you turn 65 to avoid gaps in coverage and a monthly Part B late enrollment penalty.
- Medicare pays first, once you turn 65, so if you do not enroll in Medicare while on COBRA, they may not pay your claims since you are now Medicare eligible.
Get the HR Support You Need for Your Employees
HR is such an important part of your company’s overall success. Healthcare is the largest employee-related expense your company has, and with rising costs, it’s important to do everything you can not to incur additional unnecessary expenses.
At JBird Insurance Group, it’s our passion to help businesses all over Texas understand the transition of employees to Medicare. If you’re in Austin, our team can help educate your employees and partner with your HR team in person. If you are out of state, we can assist with webinars and remote assistance.
As mentioned earlier, this service is completely free and can help take burdensome tasks off your plate. For more information, you can give us a call at 512-666-7785 or reach out here.