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Coordinating Retiree Insurance and Medicare

Retiree insurance is almost always secondary to Medicare, meaning it pays after Medicare and may provide coverage for Medicare cost-sharing, like deductibles, copayments, and coinsurance. Deciding whether to keep retiree coverage after you enroll in Medicare is a personal one that depends on your costs and anticipated health care needs. Retiree coverage premiums can be costly, but it may be worthwhile to keep your plan if you anticipate high Medicare costs. Retiree coverage may also pay for care or other items and services that Medicare does not cover, such as vision care, dental care, and/or off-formulary or over-the-counter prescription drugs.

For more information on the services covered by your retiree insurance plan, contact your benefits administrator or your employer’s human resources department.

Retiree insurance may coordinate with Medicare differently depending on the type of plan you have. Below are a few common types of plans and how you might expect them to work with Medicare. Be sure to speak to your employer’s HR department for more information.

  • Fee-for-service (FFS) plans pay for care from any doctor or hospital. FFS plans cover Medicare cost-sharing and generally act like a supplemental insurance policy.
  • Managed care (HMO or PPO) plans require that you see in-network providers and facilities. Your costs are typically lowest when seeing providers who take both Medicare and your retiree insurance. When seeing Medicare providers who do not take your retiree insurance, you will pay regular Medicare cost-sharing amounts, and your retiree insurance may not pay at all.
  • Employer-sponsored Medicare Advantage Plans offer Medicare-eligible individuals both Medicare and retiree health benefits. Some employers require that you join a Medicare Advantage Plan to continue getting retiree health benefits after becoming Medicare-eligible. You can always choose not to take your employer’s coverage and sign up for Original Medicare or a different Medicare Advantage Plan, but keep in mind that you may not be able to get that retiree coverage back if you want it at a later date.
  • Employer-sponsored Medigap policies offer supplemental insurance for Medicare-eligible individuals. You must have Original Medicare to enroll in a Medigap. Remember: You can always choose not to take your employer’s coverage and sign up for a Medicare Advantage Plan or a different Medigap, but you may not be able to get that retiree coverage back if you want it at a later date.

© Medicare Rights Center. Used with permission.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

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