Turning 65: Should I Stay on my Employer's Group Health Plan or Enroll in a Medicare Supplemental Plan?

If you're turning 65 and you'll continue working, you face an important decision: should you stay on your company's group health insurance plan or enroll in Medicare and a Medicare supplemental or Medicare Advantage plan?

The question isn't so simple. Your answer depends on:

  • Who is paying for your health insurance (you and/or your employer).
  • If you have dependents (spouse / children) enrolled.
  • The amount of money you earn.

In this article, we'll help you understand some of the things you should consider when turning 65 and choosing health insurance. We'll examine different situations for people who face the same question.

But first: Congratulations! You've made it.

You may be continuing to work because you enjoy your job and your colleagues, or you might have little choice. In either case, you'll enjoy this engaging book by Alain De Botton, The Pleasures and Sorrows of Work. It describes the huge variety of things that human beings do to support themselves and their families – from a tuna fisherman off the coast of the Maldives, to a rocket scientist launching a satellite in French Guiana, to an accountant in London.

The diversity of jobs helps to explain why I've spent a few of days of my life writing this article and why you find yourself reading my prose. So let's make this as fun as possible. Also – here's a shameless plug – let BenefitsCafe.com be the agent/consultant on your group health plan and we'll figure this out for you.

Now, let's get back to the more technical stuff about Medicare, you, and your company's health plan.

IMPORTANT: You can answer many questions by using this handy Medicare worksheet:

Medicare Worksheet PDF
Everyone who turns 65 must answer these three questions:
  1. How much will Medicare cost me? (Hint: the price varies based on your income.)
  2. Am I required to enroll in Medicare Part B? (Your company's group plan may require this.)
  3. Does my group health plan have "Creditable Coverage"? (You'll pay a penalty if it doesn't.)

Again, everyone must answer these questions, so look through the linked-to document above and find the answers to the three questions. After you've done that, the learning curve will have flattened considerably and with the help of the information below, you'll be able to determine whether you should stay on your group health plan or ditch it and enroll in Medicare with a Supplemental (Medi-Gap) plan or a Medicare Advantage Plan.

Now, we're ready to explore your personal situation.

Everyone wants to pay as little as possible for health insurance and receive the best benefits. With that in mind, it's important to note exactly "who" is paying for your health insurance – your employer or you, the employee, or both the employer and you share the cost.

When it comes to paying for health insurance people generally fall into three separate categories:

  1. Employees whose employer pays most or all of the cost of their group health plan.
  2. Employees with dependents enrolled on the company plan and the employee pays part of their cost.
  3. Business owners who pay 100 percent of the cost of their medical insurance.

This information should help you decide which course of action is best for you: staying on your group health plan or enrolling in Medicare with a Med Sup and Part D Prescription plan.

BenefitsCafe.com would love to work on your behalf as your agent/consultant/broker. Give us a call (800) 746-0045.

Read the next article: How much will Medicare cost me?