Are you working past age 65 and still covered by an employer health plan? Even if you delayed Medicare enrollment while working, you still have options when you leave your employer coverage.
As you transition away from your employer health plan, it’s important to understand your Medicare enrollment options and timing. Planning ahead can help you move to Medicare coverage with more confidence and avoid gaps in care.
So, if you’re losing coverage, here are some basic actions that will help make sure you’re covered.
What do I need to know about preventing gaps in health coverage?
As you prepare to move from employer coverage to Medicare, it’s important to plan ahead so you can maintain continuous health coverage.
To help prevent gaps in coverage:
- Confirm when your employer coverage ends
- Enroll in Medicare Parts A and B on time
- Review additional coverage options that may help manage your health care costs
- Understand when your new Medicare coverage will begin
Find out when your employer-sponsored health insurance coverage ends
There is no hard-and-fast rule about when your employer health coverage stops. With some employers, it ends on your last day of work. For others, it ends on the last day of the month that you leave your job.
The only way to be sure of when your employer coverage ends is by contacting your company’s human resources (HR) department. Be sure to get their response in writing so there won’t be any confusion about the date your coverage ends.
Why is it so important to know exactly when your employer-sponsored benefits stop? Because if you haven’t enrolled in alternative health care coverage such as Medicare by that date, you could be without any coverage at all.
Enroll in Medicare Parts A and B (Original Medicare)
If you’re age 65 or older, one important way you can avoid gaps in your coverage is to sign up for Medicare Parts A and B, often called Original Medicare, by the enrollment deadline.
Medicare Part A covers services provided in a hospital setting, like nursing care and hospital stays. Medicare Part B covers services that are separate from a hospital stay, like doctor visits, lab tests and outpatient procedures.
To learn more about what Original Medicare covers and how much it costs, go to What Parts A and B cover.
So how can you switch from your employer health insurance to Medicare? You can sign up for Original Medicare on the Social Security website, which is maintained by the federal government. You will need to complete an enrollment form.
You can retroactively begin your Medicare Part A coverage up to six months from the month you submit your completed enrollment form, but not earlier than the month you first became eligible for Medicare. Your coverage under Part B begins the month after you submit the completed form.
It’s important to remember that you’ll still have health care costs even if you have coverage under Original Medicare. For example, there is a deductible of $1,736 for each inpatient hospital benefit period before Original Medicare starts to pay. The government has worked with private insurers to create a set of plans designed to help cover some of the costs associated with Original Medicare.
These options for additional coverage to limit your out-of-pocket expenses associated with Original Medicare include Medicare Supplement plans, Medicare Part D prescription drug plans and Medicare Advantage plans.
Explore your other health coverage options
Once you’ve confirmed when your coverage ends and have signed up for Original Medicare, you’re in a good position to explore additional coverage options. Let’s take a closer look at some of these.
COBRA health plan
What is COBRA? It’s a way for you to continue the same coverage you had with your former employer’s health plan under a federal law called the Consolidated Omnibus Reconciliation Act (COBRA). COBRA is typically a more expensive coverage option and can generally only be used for a limited period. But it does have the advantage of allowing you to temporarily keep a health plan you’re familiar with after leaving your job.
It's important to know that if you enroll in Original Medicare and also choose to get coverage under COBRA, COBRA will be designated as the secondary insurer. That means COBRA will only pay if there are costs that aren’t paid by Medicare.
To learn more about how Original Medicare and COBRA work together, visit the Centers for Medicare & Medicaid Services website.
To learn more about COBRA in general, go to Answers to your top 5 questions about COBRA.
Medicare Supplement plan
Medicare Supplement plans, sometimes called Medigap plans, are provided through private insurers. By paying a monthly premium for a Medicare Supplement plan, you can get financial help paying for some of the costs not covered by Original Medicare.
Learn more about how Original Medicare and Medicare Supplement plans work together
Medicare Part D prescription drug plan
If you have Original Medicare and want prescription drug coverage, you can enroll in a Medicare Part D plan. Part D is designed to help cover the cost of prescription medications. It works alongside Medicare Parts A and B.
To learn more about stand-alone prescription drug coverage, go to What you need to know about Medicare Part D.
Medicare Advantage plan
Another option is a Medicare Part C plan, often referred to as a Medicare Advantage (MA) plan. Original Medicare doesn't include nonemergency vision, hearing or dental benefits, but many MA plans do include these benefits. And you can bundle your prescription drug benefits and medical benefits in a single MA plan called a Medicare Advantage Prescription Drug (MAPD) plan, making these types of plans a good all-in-one option for your health care coverage.
Speaking to a licensed agent is a good first step in learning how you can use an MAPD plan to get all the coverage included in Original Medicare plus many additional benefits.
To learn more about Medicare Advantage, go to Is Medicare Advantage right for you?
The bottom line
Leaving employer coverage after age 65 can feel like a big change, but you still have Medicare coverage options to explore. Whether you delayed Medicare while working or are enrolling for the first time, planning ahead can help you transition to coverage with more confidence and avoid gaps in care.
Leaving your job after 65? Use this checklist to make sure you won’t experience gaps in your health coverage
If you’re 65 or older and your employer-sponsored health coverage is coming to an end, make sure you check the following boxes, so you don’t go without coverage.
- Contact your HR department to determine the date your employer health coverage will end.
- Go to the Centers for Medicare & Medicaid Services website and sign up for Medicare Parts A and B.
- Contact your HR department again to determine if you are eligible for COBRA.
- If you are eligible, work with your HR representative to determine the monthly cost of COBRA.
- Evaluate your coverage options to determine the most effective way to address both your health needs and the cost of care.
- In consultation with your doctor, make a list of your prescription medications, any health conditions you have and any specific procedures or surgeries you may need in the near future.
- Contact an independent agent and set an appointment to discuss MAPD and Medicare Part D plans available in your area to help you avoid coverage gaps.
Commonly asked questions about preventing gaps in health coverage
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After employer coverage ends, you may need additional coverage to help pay for costs not covered by Original Medicare. Some people choose Medicare Supplement plans, Medicare Part D prescription drug plans or Medicare Advantage plans based on their health needs and budget. Review your options before your employer coverage ends so you can avoid gaps in coverage.
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If your employer has fewer than 20 employees, Medicare is usually the primary payer once you are eligible. You may need to enroll in Medicare Part A and Part B to avoid gaps in coverage and unexpected costs. Check with your employer to understand how your coverage works with Medicare.
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Retiree health coverage may not replace Medicare Part B, so you may still need to enroll to maintain full coverage. If you delay Part B without qualifying coverage, you may have to pay a late enrollment penalty. Review your retiree plan details to understand how it works with Medicare before making a decision.
Enroll in Medicare Part B with the Social Security Administration
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