Health Insurance and Retirement Tips

Seniorliving.org reports that Baby Boomers will hit retirement age at the rate of 10,000 people per day until the year 2030. Health insurance is one of the most important items that must be addressed by anyone who is contemplating when to retire and/or how long to continue working. Here are some tips:

• You become eligible for Medicare on the 1st day of the month in which you turn 65. You will need to decide whether to enroll in all, some, or none of the Medicare benefits.
• If you are enrolled in health insurance coverage through healthcare.gov at the time you turn 65, you will no longer be eligible to receive a Premium Tax Credit to reduce your monthly premium. Anyone in this situation will want to enroll in Medicare Parts A and B and select other Medicare products to complete your coverage.
• If you are enrolled in an employer-provided health insurance plan, AND you expect to continue working, make sure that you get good advice on how to make your Medicare choices.
  • If the employer has 20 or fewer employees, Medicare will be the primary payer and your employer plan will be secondary.
  • If the employer has more than 20 employees, the employer plan is primary and Medicare is secondary.
  • If you continue on the employer plan, that plan must be “creditable coverage” for Medicare purposes in order to avoid a late enrollment penalty in the future.
  • COBRA is not considered creditable coverage for Medicare. Congress is working on changing this rule.
  • Anyone that is enrolled in either Medicare Part A or Part B is not eligible to contribute to a Health Savings Account.
  • You may defer enrollment in Part A and Part B. When you decide to enroll at a future date, you will be given a retroactive effective date for Part A that is six months prior to the application date. The effective date for Part B will be based on the application date.
  • Anyone that is eligible for Medicare can discontinue their employer plan and switch to Medicare at any time.
• If you retired and enrolled in Medicare, then changed your mind and went back to work, you may be able to disenroll from Medicare if you want to participate in the employer’s plan.

The decision on whether to stay with the employer plan or go to Medicare is typically based on cost, benefits, and timing. A client that uses an expensive medication found that the employer plan provided better coverage than Medicare. It may be wiser to stay on the employer plan until the end of the year if you have satisfied your out-of-pocket expenses. Be certain to utilize the services of a professional to guide you.