Did you know that you can have both Medicare and employer insurance coverage? Or, if you would rather have one or the other, you can pick the coverage that works best for you.
To understand how both plans interact with the other and your options, you need to understand how you become eligible for and enroll in Medicare.
When you turn 65, you officially become eligible for Medicare and can enroll in any plan of your choice. This is referred to as your Initial Enrollment Period (IEP).
If you miss your IEP, which lasts during the 7 months surrounding your 65th birthday, you may be charged a late penalty and may have a harder time qualifying for certain plans.
There is, however, an exception if you have coverage through your employer. You also have options for combined coverage.
Option number one is to delay your Medicare enrollment. Because there is an exception to late enrollment fees, you can wait till your employer coverage ends to enroll in Medicare.
Option number two is canceling your employer coverage in favor of Medicare. You may opt for Medicare if you feel that Medicare will serve you well and no longer want or need to pay for your employer insurance.
However, the third and potentially best option is to keep your employer coverage and enroll in Medicare at the same time. This will provide the most overall coverage.
With both plans active, your employer coverage will act as either your primary or secondary insurer, Medicare as the other. The primary will contribute its share of the cost of the benefit first, then the secondary with its share. Through this model, almost all of your costs will be taken care of.
But what happens when you retire and or your employer coverage ends? If you have both, Medicare will just become your sole plan. If you haven’t enrolled in Medicare, you will have 6 months to do so.
This is called a Special Enrollment Period (SEP). If you don’t take advantage of it, you may then be charged with late fees. Whether or not you decide to enroll in one plan or both, you need to put your budget and coverage needs at the forefront.