It is not uncommon for people who have retired from the workforce, to change their minds and go back to work. This can be for a variety of reasons. Maybe they found they missed the sense of purpose that work gave them. Some return to work for financial reasons, finding their retirement budget cannot keep up with inflation and increasing prices.
If you are thinking about returning to work, you may be wondering what happens to your Medicare coverage when you do. That depends on several factors, including the size of the company you will be working for, and what type of health insurance benefits they offer. It’s important to understand your options in order to make the right decision.
Can You Take Employer Coverage Again When You Have Medicare
If you return to work for an employer who offers health insurance, you can take it. You are allowed to have both Medicare and employer coverage, and you can use them together. One will act as primary coverage and one will act as secondary. Should you have both? That depends on your specific circumstances.
Do You Need to Keep Medicare if You Take Your Employer’s Insurance
The answer to this question depends on the size of your employer.
- Small Employer Group – If your employer has 20 or less employees, you really need to keep Medicare Parts A and B. In this scenario Medicare coverage is considered primary. Some small employers may require you to keep Medicare coverage as your primary payer if you are eligible.
You can decide not to take your employer’s health insurance, or you can enroll and use it as your secondary insurance. You need to weigh the pros and cons of this option. Many small employers offer high deductible plans and cost-wise, it may not make sense to enroll in your employer’s plan.
- Large Employer Group – If you are joining a large employer with more than 20 employees, their health insurance would be considered primary, and you would have the option to drop Medicare and any Medigap plan and re-enroll later without facing a penalty. You need to consider the benefits offered and the cost, to determine which option is best for you.
What to Consider Before Dropping Medicare
- Creditable Coverage: If your employer’s health insurance is considered “creditable”, you can leave your Medicare, Medicare Advantage, Medigap, and/or Drug coverage, go back to an employer plan, and then return to Medicare with no penalties. You will need to provide proof of creditable coverage when you re-enroll in Medicare, otherwise you will face penalties. Creditable coverage refers to health insurance that has coverage least as good as Medicare, or better.
- Pre-Existing Conditions: If you decide to drop Medicare Part B, you’ll also have to drop a Medigap plan if you have one. This could make it difficult to enroll in another one later on as any pre-existing health conditions will be considered when re-applying. You could be denied coverage or charged a higher premium when you re-enroll.
- Health Savings Accounts (HSAs): When you have Medicare and an employer plan, you cannot contribute to an HSA if it’s offered. To contribute you would have to drop Part A, and you could end up having to repay the government for medical services Medicare covered as well as repaying any Social Security benefits money you were getting.
- Premium Payments: If you are currently paying premiums for Part A, you cannot disenroll from Part B without also disenrolling from Part A.
Should you decide to disenroll from Medicare, you will have to talk with Social Security directly, either in-person or on the phone.
Special Enrollment Periods for Re-Enrolling in Medicare
There are rules for re-enrolling in Medicare after you’ve dropped it for an employer-sponsored health plan. You’ll have an 8-month Special Enrollment Period to re-enroll in Medicare Part A and Part B. For those who cycle in and out of the workforce more than once, the eight-month window restarts each time you lose coverage.
You will only have two months after losing employer coverage to re-enroll in a Part D prescription drug plan, or a Medicare Advantage Part C plan. If you wish to re-enroll in a Medigap plan, you’ll be able to do so any time after re-enrolling in Parts A & B.
Missing any of these deadlines could result in late enrollment penalties.
If you are returning to work and need help making the right decision on your Medicare coverage, our experienced and knowledgeable team is here to help. Call us today.