When you turn 65 and become eligible for Medicare, weigh the costs and coverages to help decide between Medicare enrollment and your employer health plan.
Medicare eligibility can be liberating for many struggling with today’s health care costs. However, having an employer health plan can make Medicare decisions complicated. When choosing between Medicare and your employer’s health plan, understand your options and the costs involved.
Whether you have to apply for Medicare depends on the size of your employer, the status of your employment, and your Medicare eligibility.
| Employer Health Coverage vs. Medicare Eligibility | |
| Company size | Medicare considers companies with 20 or fewer employees to be small, and those with over 20 employees are considered large. Small companies may make Medicare mandatory when you become eligible. Large companies cannot establish this requirement since they are the primary payers, while small companies pay secondary to Medicare. Read the Medicare pamphlet Your Guide to Who Pays First for more info. |
| Employment status | For Medicare to consider a health plan creditable coverage, the benefits must be as good as Medicare’s. The covered employee must be currently working, and retirement and COBRA coverages are not considered creditable by Original Medicare regulations. If you do not enroll in Medicare when you first become eligible, and you lack creditable employer health coverage, you may begin to accrue late Medicare enrollment penalties and have enrollment delays. |
| Medicare eligibility | One requirement is the number of quarters you or your spouse have worked. If either of you have worked and paid taxes for 40 quarters or more during your lifetime, Medicare Part A is premium-free, and you should be enrolled when first eligible. Be careful enrolling in any part of Medicare if you or your employer will continue funding a Health Savings Account (HSA) on your behalf, as there may be tax consequences. |
Part B has a monthly premium of $170.10 in 2022 and escalates as your yearly income passes predetermined thresholds. If you have creditable employer coverage, you will be eligible for a Special Enrollment Period (SEP) once your group coverage terminates. However, enrollment in Part B may still be advantageous.
When becoming eligible for Medicare, compare your coverage choices before enrolling in or deferring Part A and/or Part B. There are several options you can consider:
Whether Medicare is cheaper than employer coverage can only be answered by conducting a thorough comparison of the costs and coverages offered by both types of insurance. It is always wise to contact the benefits department managing your employee coverage to discuss the ramifications of dis-enrollment. Consider the following:
Before you choose to keep an employer plan, compare your coverage options and costs. Visit with the benefits department for your employee plan and research your Medicare options. As you compare, consider these questions:
Before dropping employer coverage to enroll in Medicare, consider all the options that are or will become available once Medicare is elected. Remember the limitations of Original Medicare and the options available through MA and Medicare Supplement Plans. Consider these questions:
Ron Elledge is an accomplished Medicare agent, planner, and author. Elledge earned a bachelor’s degree in Bible theology from International Seminary and spent 30 years in pastoral ministry. He began his current career in insurance with a specialty in Medicare in 2008 and has since authored “Medicare Made Easy: What Expats, Frequent Travelers and You Need to Know” and is often a featured speaker at the International Living conferences. Elledge is a contributor to International Living, supporting Medicare beneficiaries with articles, podcasts, and Q&As.
A licensed seniors market insurance agent in Arizona and New Mexico, Elledge has helped thousands decipher the intricacies of Medicare rules and regulations, enabling them to make educated selections for their health care needs. As a world traveler with his wife, Shelli, Elledge specializes in Medicare for expats and frequent travelers. He’s up to date with Medicare regulations, coverage options, and enrollment protocols and is fervent in his resolve to present trustworthy data on this confusing and often maligned program.
“By obtaining dependable details on how to read their Medicare options, recipients can plan for it correctly and make the best choices,” says Elledge. “These choices often make a huge financial and emotional difference in their futures. When Medicare is correctly utilized, it becomes a powerful financial and medical tool for all who qualify.”
Ron Elledge is an accomplished Medicare agent, planner, and author. Elledge earned a bachelor’s degree in Bible theology from International Seminary and spent 30 years in pastoral ministry. He began his current career in insurance with a specialty in Medicare in 2008 and has since authored “Medicare Made Easy: What Expats, Frequent Travelers and You Need to Know” and is often a featured speaker at the International Living conferences. Elledge is a contributor to International Living, supporting Medicare beneficiaries with articles, podcasts, and Q&As.
A licensed seniors market insurance agent in Arizona and New Mexico, Elledge has helped thousands decipher the intricacies of Medicare rules and regulations, enabling them to make educated selections for their health care needs. As a world traveler with his wife, Shelli, Elledge specializes in Medicare for expats and frequent travelers. He’s up to date with Medicare regulations, coverage options, and enrollment protocols and is fervent in his resolve to present trustworthy data on this confusing and often maligned program.
“By obtaining dependable details on how to read their Medicare options, recipients can plan for it correctly and make the best choices,” says Elledge. “These choices often make a huge financial and emotional difference in their futures. When Medicare is correctly utilized, it becomes a powerful financial and medical tool for all who qualify.”
