Your Guide to Coordinating Medicare and Employer-Sponsored Health Insurance

Navigating Medicare is already a bit confusing, and it becomes increasingly more so when trying to coordinate Medicare with employer-sponsored health insurance. If you are nearing retirement, a retiree who's returned to part-time work, or even an HR benefits manager, understanding how these two types of insurance work together is essential to ensure you're fully covered.

With the increasing number of people working beyond the traditional retirement age, and others finding part-time work post-retirement, this is an area of health insurance that deserves more attention. We'll discuss how Medicare and an employer-sponsored health plan can be coordinated for optimal benefits and outline common scenarios that individuals often encounter.

The Intersection of Medicare and Employer Health Insurance

While it’s not common to have both Medicare and an employer-sponsored health policy, there are some scenarios when it makes sense to have both.

If you are 65 but still have a group health plan you’d like to keep, what most people do is elect to enroll in Medicare Part A only. Part A is premium-free for most beneficiaries, so most people enroll just to have the extra coverage. 

Another scenario we see is when someone has a high-deductible health plan. In this case, you may want to add Medicare to help with some of the costs during the deductible phase.

In either of these scenarios, you’ll have to weigh the pros and cons of having both types of coverage. In most cases, it makes more sense to stay on your employer’s plan longer if they pay most (or all!) of the premium for you. However, if your employer’s plan is costing you hundreds of dollars in premiums every month, it may be cheaper to make the transition to Medicare. Also, if the coverage offered by your employer is limited, it might be more cost-effective to switch to Medicare.

Not everyone will be able to delay their Medicare enrollment, even if you have an employer-sponsored plan in place. Unless that plan is creditable, you must enroll in Medicare as soon as you are eligible to avoid the late enrollment penalties.

Coordinating Medicare and Employer-Sponsored Health Insurance

For those of you who are considering having Medicare along with your employer-sponsored plan, it’s helpful to know which of those plans becomes the primary payor. Most of the time, this is easy to figure out.

A good rule of thumb is that if your employer has 20 or more employees, your group policy will remain the primary payor, and Medicare will become secondary. If your employer has less than 20 employees, Medicare becomes the primary.

Remember, everyone's situation is unique. While this guide provides general advice, your individual circumstances may require a different approach. It's crucial to consult with professionals to ensure you're making the best choices for your health and financial well-being.

At Local Medicare Specialists, we're here to help you navigate this process. Our team of experts is ready to provide personalized advice based on your specific circumstances. For more information or to schedule a consultation, contact us today.