Returning to Work
“Why dropping Medicare for employer coverage may come with some snags”
For retirees on Medicare who head back to work, the move could provide the option of employer-based health insurance.
While the current number of retirees who re-enter the workforce is hard to gage, the share of people age 65 or older still working has been steadily rising for years. For people age 65 to 74, it is projected to reach 30.2% in 2026, up from 26.8% in 2016 and 17.5% in 1996, according to the Bureau of Labor Statistics. Among those ages 75 and older, the share projected to be working in 2026 is 10.8%, up from 8.4% in 2016 and 4.6% in 1996.
Most retirees pay no premiums for Medicare Part A, which provides hospital coverage. Part B, which covers outpatient care, comes with a standard monthly premium of $144.60 for 2020 (although higher earners pay more). Part D, which provides prescription drug coverage, has a 2020 base premium of $32.74. Higher earners pay more for that coverage as well. Some people choose to go with an Advantage Plan and receive their Medicare Parts A, B and D benefits (and often extras like dental and vision) through that option. Those plans also often come with a premium. Given the various costs associated with Medicare, the employer’s plan might be cheaper. Yet before you drop parts of Medicare with the idea of picking them up down the road, be aware that there could be some snags.
One example is you can leave your Medicare, Medicare Advantage, Medi-gap, and/or Drug coverage, go back to a plan offered by your work and then return to Medicare, Medi-gap and Drug plan with no penalties or waiting period and Medical-based approval. When you are ready to come back to Medicare and supplemental coverage, make sure you do so within 63 days of leaving your new work coverage for a special enrollment period. If you miss that 63-day window you have to wait for general enrollment, which is January through March, and then the coverage is not effective until July.
So before you make the decision to go with your employer insurance and drop your Medicare call HICAP (Health Insurance Counseling and Advocacy Program we can help you with your Medicare questions so you can make the right decision. Please Give us a call@ 559-224-9117 and make an appointment with a state registered counselor.
By: Laurie Wales, HICAP Program Manager