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retirees with health insurance who is returning to work May find they have options when it comes to health insurance.
That said, depending on the size of your new employer, you might be able to choose the company’s health plan and forgo health insurance — and then re-enroll.
However, if you go this route, there are a lot of rules and deadlines you need to know. However, sticking with your health insurance may result in higher premiums due to the extra income from your job (more on that below).
Basic health insurance is Part A (hospital coverage) and Part B (outpatient care).Some beneficiaries combine it with the stand-alone Part D prescription drug plan and medical insurance Policy (covers some of the costs that come with basic health insurance). Others choose to get Parts A and B through the Advantage Plan (Part C), which usually includes Part D and some extras like dental and vision.
Part A does not incur any premium as long as you have a 10-year history of contributing to the program through payroll taxes. For Part B, Standard monthly premium is $170.10 (2022) and Part D premiums average $33.
However, higher-income beneficiaries pay more for Part B and Part D premiums. That means it’s worth considering how the extra income from work affects what you pay. (See chart.)
If you’re working for a small employer, you’ll need to keep Parts A and B even if you end up enrolling in a company health plan.
“If they go back to work for an employer with fewer than 20 employees, they’ll want to keep Parts A and B because Medicare is the primary, group,” said Danielle Roberts, co-founder of insurance company Boomer. Insurance is secondary.” Benefit.
It may also not make financial sense to choose a group plan over a Medigap policy or Advantage plan.
“Sometimes, health insurance costs are much higher for small employers,” Roberts said, adding that it’s worth crunching the numbers before making a decision.
If your employer’s plan turns out to be a good fit, you can withdraw from your prescription plan if the group coverage is as good or better than the (“credible”) Part D benefits.
If you’re looking at a health plan at a company with 20 or more employees, be aware of some potential hurdles.
First, if your work-based insurance comes with a health savings account or HSA, you can’t contribute to it if you stay on any part of Medicare, including only Part A.
Also, it may not be practical to eliminate Part A just to take advantage of the HSA.
“If they’ve already started receiving Social Security retirement benefits, they can’t cancel Part A without having to pay back all the benefits they’ve received from Social Security to date,” Roberts said.
If you do want to use an employer health plan, you can waive Part B and save on those premiums. Be sure to confirm that your employer plan will be considered credible coverage for Part D. Your insurance company should provide you with this information.
“These HSA plans may work for Part B, but not for Part D,” said Elizabeth Gavino, founder of Lewin & Gavino and independent broker and general agent for Medicare plans.
Additionally, if you have a Medigap policy, you must waive that policy as well.
However, Roberts said that when you choose Part B again, you’ll get a new six-month window to buy a Medigap policy that doesn’t require coverage.
“This is one of the very few ways a person can get a second Medigap open enrollment window,” she said.
When you do eventually lose employer coverage and want to switch to Medicare, there are other deadlines to be aware of, and often proof that you have eligible coverage.
Once you stop working, you will have 8 months to enroll or re-enroll in Part B. If you miss it, you may face penalties for late registration. You will pay 10% of your standard monthly Part B premium for each year you should be enrolled but not enrolled.
To enroll in Part D—either as a standalone program or through the Advantage program—you’ll get two months after the workplace program ends. If you miss this window, you may face late enrollment penalties. This amount is 1% of your base premium for each full month you could have been insured but not insured.
Likewise, if you want an Advantage plan, you only have two months to sign up for one after your work insurance ends. If you miss it, you have to wait until the next registration period.
For those who may cycle in and out of the workforce and thus in and out of workplace insurance: According to the Centers for Medicare and Medicaid Services, every time you lose coverage, the eight-month window restarts.
In other words, if you go to another employer that offers qualifying coverage before that time period runs out, you’re in the clear. The window restarts the next time you drop it. However, keep in mind that for drug coverage, two months.
As for providing proof of coverage: Once you no longer get coverage through work, the insurance company should mail you a letter stating the date you were covered under their plan.
For Part A and/or Part B enrollment, you will need to provide the Social Security Administration with a copy form From your employer, proof that you have coverage, Roberts said.