What You Need to Know
- The rules for small employer plans and large employer plans are different.
- The large-employer cutoff is low.
- Clients who can go to work for large employers may face more complicated decisions.
All of the news about hard-to-fill job openings may tempt some of your retired clients back into the labor market.
What if a retired client is already on Medicare?
Here are some key ideas to consider when an older client is thinking about enrolling in an employer-sponsored health plan for active employees.
What happens to your Medicare coverage when you return to work after retiring?
A client who is rejoining the workforce and has Medicare may have a choice between keeping the Medicare health care coverage or discontinuing it until the client needs to reenroll.
The most important aspect to consider is the size of the new employer.
The rules for small and large companies are different.
If your client’s new employer qualifies as a small company — has less than 20 workers on staff — the requirements are straightforward.
Your client will be free to explore the option of signing up for the employer-provided health plan, but your client must keep Medicare Part A hospitalization coverage and Medicare B physician and outpatient services coverage.
Medicare regulations require that anyone working for an employer with fewer than 20 employees must use Medicare as primary coverage. The company’s group health coverage will be a secondary plan.
Depending on the client’s medical needs and situation, the client may want to consider what makes for the most cost-effective option when thinking about adding the group health plan.
Health plans through smaller employers can be higher priced, and the Medicare plan coverage may already be sufficient.
Cost tends to be a leading factor for people choosing added coverage.
The process is a bit more complex once the client is entering the large-company tier, meaning, in this context, that the employer has 20 or more workers on staff.
If your client returns to work and is offered creditable health coverage through an employer that has more than 20 employees, the client will have to decide whether to keep the Medicare Part A and Medicare Part B coverage.
Part B coverage, for instance, comes with a premium.