You may need to sign up for Medicare to access your retiree insurance. While most employers don’t offer retiree insurance, those that do usually have all-encompassing plans that boast great benefits.

To better understand how these plans work with Medicare and the kind of coverage you can expect, keep reading.

What Types of Retiree Insurance Coordinate with Medicare?

There are different retiree insurance options your former employer may offer. It’s best to talk with your benefits administrator to get the details of your options. Below we’ll go over some potential options for retirement insurance.

Employer-sponsored Medicare Advantage Plans must meet Medicare requirements and provide benefits at least as good as Part A and Part B. Many options include vision, dental, hearing, and prescription drug coverage. Some plans will even include more benefits than most Part C plans available to the public.

The retirement Medicare Advantage plan will have a network of health care providers for many. The options may be a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO), or a Fee-for-service (FFS) plan.

Medicare Managed Care Plans (HMO and PPO) Plans have networks you must adhere to, or you’ll pay more for care. Costs are generally lower when you see doctors that take both Medicare and the group retirement health coverage.

Employer-sponsored Medigap policies are Medicare Supplement plans that your employer provides. It’s best to talk with the benefits administrator to compare the options the company offers before considering what else is available.

Fee-for-Service plans work similarly to Medigap plans because you can go to any doctor or hospital that agrees to accept Medicare.

Is Retiree Coverage Considered Creditable Coverage?

Since each retiree insurance policy varies, it’s best to contact your human services department to find out the details. The benefits administrator can tell you if their policy is considered creditable coverage. Also, if the employer health plan includes a prescription drug plan, you’ll want to ensure that coverage is creditable.

Is Medicare Primary Over Retiree Plan?

In most cases, Original Medicare is primary over a group health retiree plan. There may be cost-sharing such as coinsurance, copayments, or deductibles. Although, coverage may vary depending on the type of plan.

Because Medicare is primary, it’s important to enroll in Medicare Part A and Part B as soon as possible.

What Is The Difference Between Medicare and Retiree Insurance?

Medicare coverage works differently depending on the policy your former employer provides. If the retirement insurance plan is similar to a Medigap policy, Medicare will cover 80% of the services, and the plan will pay 20%; this depends on the coverage and some costs may apply to you.

However, suppose the retirement insurance policy is like a Part C plan. In that case, the company likely gets paid the same way private Medicare Advantage companies get paid, which is generally a set amount per enrollee.

When it comes to retiree coverage, your former employer or union will control the benefit options. Since employers don’t need to offer retirement coverage, a change in premiums or benefits is possible. Talk to your former employer’s benefits administrator to obtain a copy of your plan benefits book or summary of benefits.

Group health retirement plans may choose to provide “stop-loss” coverage which means it starts covering benefits when the maximum-out-of-pocket amount is met. A retiree plan may decide to discontinue offering coverage or go bankrupt. If the company goes bankrupt, COBRA could be an option.

If your retirement insurance reduces or discontinues coverage, you may be eligible for a Medigap Special Enrollment Period. Since retiree insurance pays after Medicare, it’s most similar to a Medigap plan.

Can You Have A Retirement Plan and a Medicare Advantage Plan?

Your employer may ask you to join a Medicare Advantage plan to continue getting retiree health benefits once you’re Medicare eligible. It’s best to talk to your Human Resources department or benefits administrator to understand coverage details better.

Can I Leave My Retiree Plan?

You can leave your group retiree health plan for something else. But when you sign up for a plan outside of the retiree plan, you will likely be unable to opt back into the retirement plan in the future.

Before making a choice, consider if the coverage they’re offering is something you’re okay missing out on.

FAQs

Is retiree coverage required to be offered?

Former employers don’t have to offer retiree coverage. In many cases, employers don’t offer these benefits.

Do retirees pay for Medicare?

Yes, Medicare isn’t free. While most people will qualify for Premium-free Part A, Part B has a monthly premium. Plus, there are deductibles, copays, and coinsurances you can expect to pay per service.

Then, there are Medicare Part D prescription costs. Now, these costs can be minimized through additional health insurance.

If I retire at 62, can I get Medicare?

Just because you retire doesn’t mean you’re Medicare eligible. To be eligible for Medicare, you’ll need to be at least 65 years old or meet specific disability requirements.

What happens to your retiree coverage when you’re eligible for Medicare?

You must sign up for Medicare when you’re first eligible to get full benefits from your retiree coverage. A retiree plan may not cover your medical costs when you haven’t enrolled in Medicare, despite being eligible.

Can you have a retirement plan and Medicare Advantage?

Technically, you can have both a retirement plan and Medicare Advantage simultaneously. Logically though, Medicare Advantage would be best utilized if you decided not to use your retirement coverage since MA is usually an all-in-one plan.

How to Compare Medigap with Retiree Insurance

Medicare beneficiaries eligible for retiree insurance know it’s important to compare options.

Medicare Supplement insurance is a beneficial option because it covers the gaps in Medicare, leaving you with little to no out-of-pocket costs.

Our agents can discuss all your options, from Medigap, Part C, and Part D plans. We can even go over your potential Medicare costs.

So give us a call today. Or use our easy online rate form to receive the best rates in your area.

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by Lindsay Malzone, Lindsay Malzone is the Medicare editor for Medigap.com. She's been contributing to many well-known publications since 2017. Her passion is educating Medicare beneficiaries on all their supplemental Medicare options so they can make an informed decision on their healthcare coverage.