Medicare and Your Workforce | What Employers Need to Know

Many employers today have team members who are age 65 or older and eligible for Medicare. For these employees who continue to work, there are important considerations, ranging from costs and benefits coordination to compliance requirements, that can vary based on the size of your organization.

Our benefits team helps employers navigate these rules and educate employees (and their spouses) as they approach Medicare age. When employees retire, our Medicare advisor provides hands-on guidance through the transition to full Medicare coverage, including enrolling in important Supplemental insurance.

Key Employer Considerations

Costs
When employees choose Medicare instead of the employer’s health plan, it can sometimes save money for both the individual and the organization. But the impact depends on factors like employer premium contributions, company size, and the strength of the group plan. Keep in mind: employers cannot offer incentives to encourage employees to leave the group plan for Medicare.

Delaying Medicare Enrollment
Employees can delay signing up for Medicare without penalties if they keep their employer coverage (or a spouse’s employer plan) while still working.

• Once they retire, they typically have 8 months to enrol in Medicare Parts A & B to avoid penalties.

• Delaying can help employees save on premiums, keep HSA contributions, and retain stronger employer plan benefits.

• Delaying Medicare while on COBRA or retiree benefits does not qualify for a Special Enrollment Period, and may trigger penalties.

Coordination of Benefits
How Medicare and your group plan work together depends on employer size:

Under 20 employees

Medicare pays first, and the group plan pays second. In most cases, employees should not delay enrolling in Parts A & B.

20 or more employees

The group plan pays first, Medicare pays second, making coordination simpler.

Health Savings Accounts (HSAs)

Enrolling in any part of Medicare HSA will mean the employee cannot make further contributions to their Health Savings Account (HSA). To continue contributing to an HSA, employees should delay enrolling in Parts A & B and discontinue making HSA contributions at least 6 months before applying for Original Medicare or Social Security. For small employers, Medicare’s primary payer status can make enrolling necessary for full coverage—even if it ends HSA contributions.

Creditable Drug Coverage
Employers must give Medicare-eligible employees an annual notice confirming that their prescription coverage meets Medicare’s minimum standards. This protects employees from late-enrollment penalties for Medicare Part D. We provide this notice in our employee materials.

Let’s make Medicare simple. Whether you’re an employer navigating the rules or an employee approaching Medicare age, our team is here to guide you every step of the way. From understanding your options to making the right enrollment decisions, we’ll help you avoid costly mistakes and feel confident in your coverage. Contact us today to get started.