Recently, there has been a shift in the trend of retirement among individuals aged 65 and older. In the past, people in this age group would retire and enroll in Medicare. However, according to a report by the Pew Research Center, in 2023, 19% of individuals aged 65 and older were still employed, nearly double the number from 35 years ago. This increase in older workers staying in the workforce has presented some challenges when it comes to Medicare enrollment.
One common scenario observed is older employees being informed by their employers that they must enroll in Medicare upon turning 65. There have also been cases where employers have discontinued insurance plans for employees after their 65th birthdays, forcing them to sign up for Medicare. This has led many individuals to question the legality of these actions and whether employers can compel them to switch to Medicare from their employer-provided plans.
The Medicare Secondary Payer program, established by the Omnibus Budget Reconciliation Act of 1980, aims to ensure that Medicare does not pay for services that should be covered by other health insurance. The rules under the MSP program determine whether an employer plan is the primary or secondary payer. For large employers with 20 or more employees, they are required to provide the same primary coverage to employees and spouses aged 65 and older as they do to younger individuals. In contrast, small employers with fewer than 20 employees are exempt from these rules, making Medicare the primary payer.
Despite some misconceptions, small employers are not subject to MSP rules or age discrimination laws when it comes to employment. Therefore, they have the discretion to continue offering health insurance as a secondary payer for older workers or discontinue employer coverage altogether. Regardless of the employer’s decision, individuals turning 65 are encouraged to enroll in both Part A and Part B of Medicare. It is important to navigate through the different rules and considerations surrounding Medicare to make informed decisions regarding healthcare coverage in retirement.
Ultimately, individuals who are eligible for Medicare at the age of 65 have the option to remain on their employer-provided plan or transition to Medicare, depending on their specific circumstances. While larger employers are required to offer the same coverage to older employees as they do to younger ones, small employers have more flexibility in their approach to providing healthcare coverage for older workers. It is essential for individuals to be aware of their rights and options when it comes to navigating Medicare enrollment and healthcare coverage during their retirement years.
