Our parents may have had an easier time than many of us do now. When they turned 65 years old, they were eligible for full Social Security retirement benefits and Medicare. Today, depending on the year you were born, your full SS may not take effect until you are 67, so you may continue to work and you’re eligible for Medicare. So what should you do?
Below are factors that may affect your decision.
Health Insurance — Is your health insurance from you or your spouse’s retirement benefit? You may need to enroll in Medicare Part A, Part B and Part D (prescription drug plan) to avoid surcharges or penalties. Medicare becomes the primary payer of health benefits (this includes if you are covered through Consolidated Omnibus Budget Reconciliation Act (COBRA).
◆ If you or your spouse are working and covered by employer’s health plan, then the size of the employer group may make a difference.
◆ If your employer has 20 or more employees, the Medicare Secondary Payer (MSP) provisions of the Social Security Act require Group Health Plans (GHP) to make payments before Medicare. Medicare is the secondary payer under the Working Aged provisions of MSP, if all of the following conditions are met: 1) the beneficiary must be age 65 or older and on Medicare, 2) the insured person under the GHP must be either the beneficiary or the spouse of the beneficiary, 3) the GHP coverage must be based upon the current employment status of the insured person, 4) the employer providing the GHP coverage must have 20 or more
employees, or if the GHP is part of a multiple employer or multi-employer plan. When you leave your job, you have eight months to sign up for Part B under a Special Enrollment Period.
◆ If your employer has fewer than 20 employees, then Medicare is the primary payor. There are some federal protections that include the following: The GHP may not offer coverage that pays after Medicare. The GHP may not pay the provider of service a lesser amount, impose limitations on benefits, apply a higher deductible or coinsurance amount, or charge a higher premium because the patient has Medicare. A GHP may not require a person to wait longer for the GHP coverage to begin because they have Medicare. The GHP may not terminate coverage because a person became entitled to Medicare, except as provided in COBRA. Finally, the GHP is prohibited from providing misleading or incomplete information that might induce a Medicare beneficiary to reject coverage under the employer plan.
Medicare Part D — Prescription drug coverage has to be “creditable.”
◆ Part D offers prescription drug coverage. If your employer plan offers what Medicare calls “creditable” coverage, you may be able to delay enrolling in a Part D plan. Creditable means that your employer plan is as good as or better than the coverage provided by Medicare’s prescription drug benefit. If you don’t have this type of coverage and don’t enroll as soon as you’re eligible, there‘s a late enrollment penalty if you go more than 63 days without prescription drug coverage.
◆ If you’re you turning 65 soon, check with your employer’s benefit administrator about Medicare or go to www.socialsecurity.gov.
KAISER FOUNDATION HEALTH PLAN — HAWAII
Medicare Sales Information – 808-432-5915
Information provided by the Hawaii Kaiser Permanente Medicare Team as an educational resource.