Planning for employee retirement at any age

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You’ve provided great benefits and guidance to help your employees make important health care decisions throughout their career. As they prepare to transition to retirement, you may think there isn’t much you can do to assist with their future health insurance needs. However, as your soon-to-be retirees begin asking themselves, “How can I make sure I have coverage in the future?” you can continue to guide them.

Make the move to Medicare easy for them and simple for you. Starting the retirement planning process early will make sure retiring employees will have the health coverage they need and avoid lifelong penalties.

So how do you help them get ready?

Understand all the parts

Medicare is made up of four parts: A, B, C and D.

• Part A covers hospital costs.
• Part B covers medical care.
• Part C, also called Medicare Advantage, is offered through private insurance companies and combines the coverage included in Medicare Parts A and B, and often Part D, into one plan.
• Part D covers prescription drugs.

Retiring employees will first enroll in Original Medicare — Parts A and B — when they turn 65. Once they’re enrolled in Original Medicare, employees may choose additional coverage such as a Medicare Supplement (Medigap) plan to help cover out-of-pocket costs and a Part D prescription drug plan for medication coverage.

In addition to medical costs, retiring employees may ask about prescription costs. Wellmark’s MedicareBlue^SM Rx is an easy-to-use, Part D prescription drug plan (PDP) designed to help manage the cost of prescription drugs and protect employees from unexpected drug costs. Dental, vision and hearing plans are also available to ensure your employees have well-rounded health care coverage.

Know when Medicare enrollment happens

Medicare-eligible retiring employees can only enroll during specific times of the year.

The first time they can enroll is during their Initial Enrollment Period (IEP), which begins three months before their 65^th birthday, includes their birthday month, and ends three months after they turn 65. Employees planning to retire near this time should enroll during their IEP. But what should employees do if they’re retiring early or planning to work past 65?

Learn how to navigate every retirement transition

Not every employee will follow the traditional Medicare journey. With more employees choosing to work past 65, some employees may choose to delay enrolling in Medicare. And some employees will retire before they’re eligible to enroll. Here’s what Medicare enrollment could look like for them.

Scenario 1 — Traditional retirement at age 65

If an employee plans to retire at age 65, they should enroll in Medicare during their IEP. This will ensure they have the health coverage they need once they retire.

Scenario 2 — Early retirement at age 62

Employees who retire before age 65 are not eligible to enroll in Medicare. In this situation, the employee has two options.

Option 1: The loss of their employer-sponsored health coverage would trigger a Special Enrollment Period (SEP), and they could enroll in an individual or family plan from the Health Insurance Marketplace.

Option 2: The retiree can elect to stay on their current health plan through COBRA. However, the retiree is typically only allowed to use COBRA coverage for a maximum of 18 months following retirement. After 18 months, they must enroll in a Marketplace plan or Medicare — if they’re eligible.

Scenario 3 — Delayed retirement at age 70

Employees who work past 65 are not required to fully enroll in Medicare during their IEP if they have qualified coverage through their employer. They may choose to delay Medicare Part A and/or Part B enrollment. Even if they have coverage from their employer, employees should still consider enrolling in Medicare Part A as soon as they turn 65 to avoid gaps in coverage and a lifetime late enrollment penalty down the line.

Take the next step

Let us help you continue the great job you’ve done helping your employees make important decisions — without creating more work for yourself. Wellmark Medicare Consultants are committed to helping employees feel confident making retirement decisions and providing exceptional support services to you.

Our Medicare experts will answer questions, identify Medicare options that fit employee needs and provide guides and resources that simplify complex Medicare topics. Connect with a Wellmark Medicare Consultant to learn how we can support you and your employees during the Medicare transition.