A growing number of people over the age of 65 are choosing to continue working rather than retiring, according to a report by the Pew Research Center. In 2023, 19% of individuals aged 65 and older were still employed, which is nearly double the number from 35 years ago. This trend has led to some challenges for older workers when it comes to enrolling in Medicare, as their employers may have policies that require them to switch from their employer-provided insurance to Medicare once they reach the age of 65.
Two common situations faced by older workers include being told by their employer that they must enroll in Medicare upon turning 65, or having their company terminate their insurance plans after their 65th birthdays, forcing them to sign up for Medicare. The Centers for Medicare and Medicaid Services (CMS) has implemented the Medicare Secondary Payer (MSP) program to ensure that Medicare does not pay for services that should be covered by other health insurance plans. The primary payer is responsible for paying healthcare bills first, while the secondary payer covers any remaining costs. The number of employees in a company determines whether the employer plan is considered the primary or secondary payer.
For large employers with 20 or more employees, the MSP rules require them to offer the same primary coverage to employees and spouses ages 65 or older as they do to younger employees. These employers cannot offer incentives for older workers to terminate enrollment in the group health plan and enroll in Medicare. On the other hand, small employers with fewer than 20 employees are exempt from these rules, and can choose whether to provide health insurance as the secondary payer for older workers or discontinue employer coverage altogether.
Some individuals may believe that small employers dropping coverage for older employees violates the Age Discrimination in Employment Act (ADEA), which prohibits discrimination against individuals aged 40 or older. However, the ADEA only applies to private employers with 20 or more employees, as well as state and local governments, employment agencies, labor organizations, and the federal government. Overall, individuals who are turning 65 and eligible for Medicare should enroll in Part A and Part B, regardless of their employer’s coverage decisions.
In navigating the complexities of Medicare and employer-provided insurance, it is important for individuals to carefully review the rules that apply to their specific situation. Working through the various regulations and guidelines can be challenging, so it is advisable to seek multiple sources of information and not solely rely on one person’s advice. Ultimately, individuals should make informed decisions about whether to continue with their employer plan or enroll in Medicare based on what is best for their individual healthcare needs.
