Sannes Insurance

When you retire and/or lose your employer-sponsored health benefits, Medicare can become your primary source of health insurance. Medicare will generally pay first for your healthcare costs, and your former employer’s retiree plan, if you have one, will then act as secondary coverage, potentially covering costs not paid by Medicare. It’s crucial to enroll in Medicare Parts A and B when you retire to avoid potential penalties and ensure continuous coverage.

Here’s a more detailed breakdown:
1. Medicare Enrollment:
Eligibility:
You become eligible for Medicare at age 65.
Enrollment:
You can enroll in Medicare during the Initial Enrollment Period, which is around your 65th birthday.
Special Enrollment Period:
If you are still working and have employer-sponsored insurance when you turn 65, you can delay enrolling in Medicare Part B without penalty, but you will have a Special Enrollment Period when you retire to enroll in Part B. This period typically lasts for 8 months after your employment or employer coverage ends.
Automatic Enrollment:
If you are already receiving Social Security benefits before turning 65, you might be automatically enrolled in Medicare Parts A and B.

2. Medicare and Retiree Coverage:
Medicare is Primary:
Generally, when you have both Medicare and retiree coverage, Medicare will pay first, and your retiree plan will pay second (secondary).
Retiree Coverage as Secondary:
This means that your retiree plan will help cover costs that Medicare doesn’t pay, like deductibles, copayments, and coinsurance.
Coordination of Benefits:
It’s important to understand how your retiree plan coordinates with Medicare. Some retiree plans may require you to enroll in Medicare Parts A and B to access their full benefits.
Check Your Plan:
You should contact your employer’s benefits administrator or the plan documents to understand the specific details of your retiree plan and how it interacts with Medicare.

3. Potential Options:
COBRA:
You may be able to extend your employer-sponsored insurance through COBRA for a limited time after leaving your job. However, COBRA premiums can be significantly higher than your previous employer-sponsored plan. Also, COBRA is not deemed ‘creditable’ by Medicare and therefore you will want to move to a Medicare plan and prescription drug plan right away to avoid lifelong penalties. 
Individual Insurance:
You can explore options for individual health insurance through the Affordable Care Act (ACA) marketplace.

4. Key Considerations:
Timing:
Coordinate your Medicare enrollment with the end of your employer coverage to avoid gaps in coverage.
Costs:
Be prepared for potential costs associated with Medicare, including premiums, deductibles, and cost-sharing.
Consult Professionals:
Seek guidance from your employer’s HR department, a benefits administrator, or a healthcare advisor to understand your specific situation and make informed decisions.