Age 65+ and Employer Plans
Job-based insurance is insurance offered by an employer or union for current employees and family members. Job-based insurance allows you to delay Medicare enrollment. However, you may want to enroll in Medicare depending on whether your job-based insurance pays primary or secondary. In most cases, you should only delay Part B if your job-based insurance is the primary payer (meaning it pays first for your medical bills) and Medicare is secondary.
If you are eligible for Medicare due to age (meaning you are 65+) and are covered by your or your spouse’s job-based insurance, you have a Special Enrollment Period (SEP) to enroll in Part B up to eight months after you no longer have coverage from current work. This means that you are not required to take Part B during your Initial Enrollment Period (IEP). However, remember that in most cases you should only delay Part B enrollment if your job-based insurance is the primary payer.
- Job-based insurance is primary if it is from an employer with 20+ employees. Medicare is secondary in this case, and some people choose not to enroll in Part B because of the additional monthly premium.
- Job-based insurance is secondary if it is from an employer with fewer than 20 employees. Medicare is primary in this case, and if you delay Medicare enrollment, your job-based insurance may provide little or no coverage. You should enroll in Part B to avoid incurring high costs for your care.
To find out if your job-based insurance is primary or secondary, contact your or your spouse’s human resources department. If you plan to delay enrollment into Part B and use the SEP later, keep records of your health insurance coverage. You will be required to submit proof of your enrollment in job-based insurance when accessing the SEP.
Importance of Creditable Drug Coverage
Creditable drug coverage is, on average, as good as or better than the basic Part D benefit. You should receive a notice from your employer or plan around September of each year, informing you if your drug coverage is creditable. Click here to see a sample. If you have not received this notice, contact your human resources department, drug plan, or benefits manager. Be aware that this information may not come as a separate piece of mail; it can be included with other materials, such as a plan newsletter.
Several types of plans offer creditable drug coverage, including:
- Veterans Affairs (VA) benefits
- TRICARE for Life (TFL)
- Federal Employee Health Benefits (FEHB)
- Some job-based and retiree plans
If you are considering delaying Part D enrollment because you already have prescription drug coverage, make sure to find out if your coverage is considered creditable. Maintaining enrollment in creditable drug coverage means you will not incur a late enrollment penalty (LEP) for delaying Part D enrollment. Additionally, having creditable coverage means that if you learn that you are going to lose such coverage and you want Part D coverage, you will have a two-month Special Enrollment Period (SEP) to enroll in a Part D plan.
If you have no drug coverage, or have drug coverage that is not creditable, Part D may help you. Even if you do not take prescription drugs, it is important to enroll in Part D so that if you later need to access prescriptions you do not face penalties or gaps in coverage.
Remember, if you decide to delay enrollment in any part of Medicare, keep a record of your insurance until you enroll in Medicare. You may need this documentation in order to sign up for Medicare later.
COBRA and Medicare Coordination
The way that COBRA and Medicare coordinate depends on which form of insurance you have first. While it is possible to get COBRA if you already have Medicare, it is not usually possible to keep COBRA if you have it before you become Medicare-eligible. Specifically, whether you can have both COBRA and Medicare depends on which form of insurance you have first.
- If you have COBRA when you become Medicare-eligible, your COBRA coverage usually ends on the date you get Medicare. You should enroll in Part B immediately because you are not entitled to a Special Enrollment Period (SEP) when COBRA ends. Your spouse and dependents may keep COBRA for up to 36 months, regardless of whether you enroll in Medicare during that time.
- You may be able to keep COBRA coverage for services that Medicare does not cover. For example, if you have COBRA dental insurance, the insurance company that provides your COBRA coverage may allow you to drop your medical coverage but keep paying a premium for the dental coverage for as long as you are entitled to COBRA. Contact your plan for more information.
- If you have Medicare Part A or Part B when you become eligible for COBRA, you must be allowed to enroll in COBRA. Medicare is your primary insurance, and COBRA is secondary. You should keep Medicare because it is responsible for paying the majority of your health care costs. COBRA is typically expensive, but it may be helpful if you have high medical expenses and your plan covers your Medicare cost-sharing or offers other needed benefits.