How to Enroll in Medicare if You Have Retiree Insurance

March 13, 2023

How to Enroll in Medicare if You Have Retiree Insurance

Retiree insurance is employer-provided health insurance that some employers provide to former employees after retirement. This insurance usually pays second to Medicare so in order to be fully covered, you must be enrolled in Medicare. Depending on your policy, you may be required to sign up for Medicare Part A & Part B when you are Medicare-eligible.

Should I Keep My Retiree Insurance?

There are some instances where keeping your retiree insurance along with your Medicare coverage may be beneficial if you can afford the premium. Some Retiree insurance plans cover things like Medicare deductibles, copayments, and coinsurances. The Retiree plan may also include prescription drug coverage. If you are satisfied with that coverage, call your plan to see if you can delay your Medicare Part D enrollment.

It is also important to know that your spouse or family members are not eligible to enroll in your Medicare coverage. If you choose to drop your retiree insurance, keep in mind they may need coverage of their own.

How Do Medicare and Retiree Insurance Interact?

Medicare and Retiree insurance are intermingled because if you have retiree insurance you must be enrolled in Medicare to be fully covered. There are differences, however, in how Medicare interacts depending on the type of plan you have.

Fee for Service (FFS) Plans

Fee for Service plans act almost like a supplemental insurance policy and cover Medicare cost-sharing. They can pay for healthcare from any hospital or healthcare professional.

HMO or PPO (Managed Care) Plans

Managed care plans, known as HMO or PPO plans, require you and rely on you seeing healthcare providers and getting care from facilities in your network. Most of the time, your costs will be lowest when getting care from providers in your network who accept retiree insurance and Medicare. If you see out-of-network providers, you will pay full Medicare cost-sharing & your retiree coverage may not pay anything at all.

Employer-Sponsored Medicare Advantage (Part C)

There are some employers that require you to enroll in a Medicare Advantage (Part C) plan to continue getting your retiree insurance once you are eligible for Medicare. If you choose not to enroll in your employer’s Medicare Advantage (Part C) coverage, you may have difficulty getting retiree coverage back. With this in mind, you are also free to enroll in Original Medicare or another Medicare Advantage (Part C) plan of your choosing.

Employer-Sponsored Medicare Supplements

Another employer insurance plan option is employer-sponsored Medigap, or Medicare Supplement, policies. Just like employer-sponsored Medicare Advantage (Part C) plans, you do not have to enroll in employer-sponsored Medigap plans but it may be harder to get your retiree insurance back later.

Retiree Insurance and Medicare Part D Prescription Drug Plans

Retiree insurance can offer prescription drug coverage as well. If the prescription drug coverage offered with your retiree insurance is creditable drug coverage (as good or better than basic Medicare Part D) you are eligible to delay Part D enrollment. It may be beneficial to keep your retiree insurance even if it doesn’t provide creditable drug coverage. This is because some plans keep you covered when you are in the coverage gap. Remember that some plans don’t allow you to drop prescription drug coverage without losing your retiree insurance.

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