When workers reach their 60s, retirement is often top of mind. While the thought of no longer having to work is exciting, figuring out all the moving parts, including your healthcare options, can be overwhelming. This is why it’s important for employers to educate their employees as they near retirement, explained Sandi Brinson, an Account Executive and Director of HR Solutions at JA Benefits.

A common point of uncertainty people have as they near retirement is how to evaluate their organization’s group plan versus Medicare enrollment.

ASSISTING YOUR EMPLOYEES

One of the best ways employers can help their employees in dealing with uncertainty about healthcare in retirement is by holding onsite educational sessions with experts on the topic. In addition to the educational group meetings, you can also have experts set aside time to provide more personalized advice in an individual session.

“Bringing opportunities onsite and inviting staff in afterhours has proven to be very successful in educating employees. Prior to eligibility, individuals receive a large amount of information regarding Medicare options. The volume of information and the task of comparing their current employer plan options versus Medicare is very overwhelming for employees. Everybody’s situation is unique, so providing educational sessions onsite on information about Medicare, Social Security and how they coordinate are extremely beneficial.”

CLEARING UP CONFUSION

Medicare Part A is sometimes called “Hospital Insurance”. Part A helps cover inpatient hospital care, skilled nursing facility care, hospice care, and home health care. Medicare Part B is often referred to as “Medical Insurance”. Part B helps cover services from doctors and other health care providers, outpatient care, home health care, durable medical equipment, and some preventive services, including certain vaccines and cancer screenings.

Most people enroll in Medicare part A and Part B when they turn 65. You may be enrolled in Medicare Part A and Part B automatically if you are receiving retirement benefits through Railroad Retirement Board (RRB) or Social Security at age 65. Did you know that you can delay enrolling in Medicare Part A and Part B? For example, some people may want to consider delaying Medicare part A until a later date, such as people who contribute to a Health Savings Account (HSA). People who have health insurance from their (or their spouse’s) current employer may be able to delay enrolling in Part B. With the different options available, individuals should meet with an expert to help them clear up any confusion they might have

When to Enroll in Medicare

There are a few situations where Medicare enrollment may occur automatically.

If you are receiving retirement benefits:

If you’re already collecting Railroad Retirement Board or Social Security retirement benefits when you turn 65, you will automatically be enrolled Medicare Part A and Medicare Part B if you sign up for Medicare Part B at the time you sign up for retirement benefits.

If you don’t want Medicare Part B:

If you’re automatically enrolled in Medicare Part B, but do not wish to keep it you have a few options to drop the coverage. If your Medicare coverage hasn’t started yet and you were sent a red, white, and blue Medicare card, you can follow the instructions that come with your card and send the card back. If you keep the Medicare card, you keep Part B and will need to pay Part B premiums. If you signed up for Medicare through Social Security, then you will need to contact them to drop Part B coverage. If your Medicare coverage has started and you want to drop Part B, contact Social Security for instructions on how to submit a signed request. Your coverage will end the first day of the month after Social Security gets your request.

Medicare Part B late-enrollment penalty:

If you do not sign up for Medicare Part B when you are first eligible, you may need to pay a late enrollment penalty for as long as you have Medicare. One exception is if you have health coverage through an employer health plan or through your spouse’s employer plan, you can delay Medicare Part B enrollment without paying a lateenrollment penalty. This health coverage must be based on current employment, meaning that COBRA or retiree benefits aren’t considered current employer health coverage.

Medicare Initial Enrollment Period

For most people, enrolling in Medicare Part A is automatic. However, there are several instances where you may have to manually enroll in Medicare Part A and/or Part B during your Initial Enrollment Period (IEP), the seven-month period that begins three months before you turn 65, includes the month of your 65th birthday, and ends three months later.

Some situations where you would enroll in Medicare during your initial enrollment include the following.

If you aren’t receiving retirement benefits:

If you are not yet receiving retirement benefits and are close to turning 65, you can sign up for Medicare Part A and/or Part B during your IEP. If you decide to delay your Social Security retirement benefits or Railroad Retirement Benefits (RRB) beyond age 65, there is an option to enroll in just Medicare and apply for retirement benefits at a later time.

If you do not qualify for retirement benefits:

If you are not eligible for retirement benefits from Social Security or the RRB, you will not be automatically enrolled into Original Medicare. However, you can still sign up for Medicare Part A and/or Part B during your IEP. You may not be able to get premium-free Medicare Part A, and the cost of your monthly Part A premium will depend on how long you worked and paid Medicare taxes. You will still have to pay a Medicare Part B premium.

*Centers for Medicare & Medicaid 2019, Maryland, accessed 6 November 2019, http://www.cms.gov

HEALTH SAVINGS ACCOUNTS

With all the Medicare enrollment information outlined above, how does that affect employees that have been contributing to Health Savings Accounts (HSAs) for the purpose of utilizing those savings on medical expenses in retirement? Many employees are uncertain how this works with Medicare. Since Medicare doesn’t offer an HSA-qualified option, employees can no longer contribute to their HSA after enrolling in any part of Medicare. Many employees are unaware of their options to continue contributions to the HSA once they are Medicare eligible.

Employees seek answers to these types of questions, especially those who plan to continue working beyond the age of 65. As employees face this potential transition, they value employers that offer these resources and opportunities.

JA IS AT YOUR SERVICE

JA has the expertise necessary to help employers better educate their employees as they near retirement. Sandi brings her extremely valuable perspective to the table for JA’s clients, as she has a background in human resources and understands the challenges and opportunities HR professionals face when it comes to educating their employee base on important topics, including healthcare in retirement.

“I have expertise in the communication pieces of working with clients and HR departments, making sure we’re bringing relevant, valuable topics to employees. Educating employees and broadening their knowledge on topics such as this will ensure employees feel confident in making the best decisions for themselves and their family,” Sandi said.

JA’s flexibility and accessibility for our clients allows us to better assist their needs. While we are able to provide many resources that can be accessed through technology, we also welcome in-person meetings for our clients to better serve them.

Sandi emphasized, “These decisions are important ones that not only affect the individual but also their family. Providing convenient, flexible options so spouses and other family members can attend informational sessions on a variety of topics is important. Being proactive in our approach is key, because it is never too early to start these conversations.”

For further information or questions, please contact Sandi Brinson at sandi.brinson@jabenefits.com or Financial Consultant, Mike Fidler, at mike.fidler@jabenefits.com.

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