Balancing Medicare and Work-Based Insurance

Posted on 12-21-2021

This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing rules and other considerations faced by workers who are eligible for both Medicare and employer-based health insurance:

The number of working Americans age 65 and older dropped by 1.1 million during the first three months of the pandemic and has been slower to recover than other age groups.

Even so, more than 10.8 million workers are eligible for Medicare, and the number is likely to grow as 10,000 baby boomers turn 65 every day until 2030.

Some employers — especially small businesses — may require employees or covered spouses to enroll in Medicare when they are eligible in order to retain their employer-sponsored health insurance. But many workers who are eligible for both types of coverage can choose one or the other, or both. To make an informed decision, it’s important to understand an array of rules and other considerations regarding costs and coverage.

Primary Insurance vs. Secondary Insurance

If an employer has 20 or more employees, the employer health coverage is primary and would pay first for covered expenses. Medicare is secondary and may pay for some expenses not covered by the employer coverage. Employers with 20 or more employees must offer the same health insurance benefits to employees age 65 and older that are offered to younger workers. The same is true of spousal benefits, if offered.

If an employer has fewer than 20 employees (and is not part of a multi-employer group for health insurance), Medicare would be primary and the employer coverage would be secondary, which is why small businesses may require eligible employees or spouses…

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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 23 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.

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