Leaving Group Health
Leaving Group Health
If you still have a group health plan when you become eligible for Medicare, you have a few options to change or leave it.
Group health is the insurance you receive through your employer. As long as you’re working for said employer, you have the option to keep, combine, or leave their plan. In some cases, they will continue to provide you benefits even after you’ve retired.
Whatever the case may be, when you turn 65 and become eligible for Medicare, you must decide what to do with your group health plan.
Why Enroll in Medicare
Maybe you have excellent coverage through your group health plan, and see no reason to enroll in Medicare while you have it. If you would rather keep your employer coverage rather than buy Medicare, you may still want to consider it.
The 7 months surrounding your 65th birthday are called your Initial Enrollment Period (IEP). During this time, you can enroll in any Medicare plan of your choice (Part A, B, C, or D). After this period, however, you may experience late enrollment fees.
For every year you don’t sign up for Original Medicare (Parts A and B) or Part D, your monthly premium is raised. In other words, you will have a permanently higher monthly payment if you do not sign up right away.
So if you are able to keep your group health plan long-term, you should still enroll in Medicare as soon as possible.
Cancelling Group Health for Medicare
However, if you are ready to retire and/or cancel your group health plan, you may be able to avoid those aforementioned late fees. When and if your group health plan ends, you will automatically be eligible for a Special Enrollment Period (SEP), meaning that you can enroll in Medicare without any penalties.
So, if your employer allows you to keep your group health plan after you’ve retired, you should enroll for Medicare during your IEP. But, if you know that your employer plan ends as soon as you retire, you may be able to hold off enrolling in Medicare.
There are still a lot of benefits to signing up right away. For instance, many people sign up for Part A as soon as they are eligible. Because most people are eligible for a premium-free plan, it is like having additional coverage at little to no extra cost.
You may, however, benefit from holding off on Part B. Because Part B has required premiums, you may be able to survive with just your group health for the time being.
Combining Group Health with Medicare
It will likely be a major benefit to combine both your employee insurance and your Medicare coverage, if that is an option.
When you have two forms of insurance, one will function as the primary, the other as the secondary. In other words, when you receive a covered healthcare benefit, the primary plan will contribute their funds first, then the secondary covers their remaining share.
If your group health plan has 20 or less members, it will be the secondary payer. If it has more than 20 members, however, it will be the primary (with Medicare as the secondary).
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Need Help Deciding Which Strategy is Right for You?
Whether you’re ready to enroll in Medicare now or still have more questions, Texas Medicare Advisors has what you need.
We will advise and provide you with a healthcare strategy to make sure you’re getting the coverage you need. So, if you’re ready to get started, give us a call at 512-900-3008.