How Medicare Works With Your Group Health Insurance
18% of people over age 65 are still working. Many get their health insurance through their employer. This might mean they will have a penalty for late enrollment if they do not have the right type of plan or benefit coordination.
That late-enrollment penalties last a lifetime. For Part B, that surcharge is 10% for each 12-month period you could have had it but didn’t sign up. For Part D, the penalty is 1% of the base premium ($33.06 in 2021) multiplied by the number of full, uncovered months you didn’t have Part D or creditable coverage. That can really add up!
If you work at a larger company, 20 or more employees, you might not need Medicare part B, but Medicare Part A might be required. it costs you nothing to get Medicare Part A under most circumstances, so go ahead and get at least Medicare Part A when you first turn 65. But, if your employer deducts from your paycheck to cover the health care premium, you need to compare that to the cost of a Medicare plan instead. In general, at age 65 with no penalties, your Medicare, Medicare Supplement and Drug plan premiums would be under $300 per month. this is for excellent coverage, with very little out of pocket costs.
To make it even better, many employers will pay for your Medicare because it costs them a lot less too. compared to an average group plan premium of $1200 per month, where your employer pays half, your employer would be better off covering your Medicare premiums at less than $300 than paying his half of your group premium at $600. If you have others enrolled in the plan, spouse or dependents, that might change the math, but we do these comparisons all the time.
If you work for a company with fewer than 20 employees, then you definitely should get Medicare Parts A and B when you turn 65. you can choose to stay on the group plan as well, but Medicare will be your primary health insurer. And staying on the group plan would be overly expensive.
This is provided for informational purposes only and is not intended to substitute for professional advice. Randy Foulds of Foulds Health Insurance Agency is an independent broker and Medicare specialist in La Quinta. license #0G69218. You can reach him at 760-346-6565.