Medicare: Are Your Employees Ready for Retirement?

The peak of the Baby Boom was 1960—that means those Boomers are reaching their prime retirement-eligible age of 62 to 65 within the next few years. With nearly 10,000 people turning age 65 each day, the highest number of potential retirees will occur before 2025, with more women than men reaching that milestone. While the trend will continue, there will not be a significant decline in retirees until the mid 2030s.

These numbers indicate that retirement issues will be on the forefront for years to come. Understanding how to make retirement and its unique issues part of your corporate culture is critical to understand now.

Help Employees Compare Options

"Should I keep our group insurance or switch to Medicare?"

An AARP study shows that over 30% of Americans are expected to continue working past age 65, so this will be a common question for your Benefits Department to answer. Working with your broker to educate your staff members will be critical to help them make the right choice while keeping them engaged if they continue to work.

Kaiser Family Foundation studies indicate that employers provide nearly 50% of all Americans with health insurance, while approximately 13% are insured through Medicare. Your working employees approaching age 65 will have to consider premiums, coverage options, secondary insurance (Part B), and other options that may be confusing to them. Giving them the time, information, and direction at this critical period can provide enormous value.

According to a SHRM guideline, the critical factors to consider include:

• Cost: How do the costs (premiums, co-pays, out-of-pocket limitations, etc.) compare?
• Coverage: What is the scope of coverage, and will coverage be similar?
• Providers: Do the employee's current providers accept Medicare? How important is this to the employee?
• Dependents: Does the employee have dependents who would lose coverage under the group plan if he or she elects. Medicare?
• Services: Which services and options does the employee use most under the group plan, and are these covered under Medicare and at similar rates?

This information must be communicated to not only your working employees, but to your retirees, COBRA participants, and others who may be part of your employer-sponsored plan. Helping them make smart choices not only helps them but can help you, too.

Avoid Medicare Mistakes

There are a few key things you can help your employees remember about their Medicare choices.

1. The BENES Act of 2017: Currently, there is an act under review in Congress that would:

• Establish requirements for the Centers for Medicare & Medicaid Services (CMS) to notify individuals of their potential eligibility for Medicare.
• Require the Internal Revenue Service to disclose to CMS specified taxpayer information for the purpose of establishing individuals' potential Medicare eligibility.
• Restructure Medicare enrollment periods and coverage periods.

Staying advised of changing legislation is key to making sure you stay compliant with both CMS and IRS statutes.

2. The Full Retirement Age is changing: In the past, the full retirement age was 65, but is changing to 66 years for people born after 1959 and will later change to age 67 for people born after 1960. Despite the age changes, it's still required for people to file at age 65—even though they might not yet be ready. Signing up too late may mean delayed coverage or fines.

3. Missing the Enrollment Period: We've all seen the commercials for the annual enrollment period, but first-time enrollees have their own enrollment period. Missing that enrollment can me delays, increased costs, and fines.

Don't Go it Alone

Medicare can be tricky—but it's an inherent part of the employee benefit world for the next few decades. Learning your role as an employer is vital to informing your retirement-eligible group insurance members and can keep your costs in check. For more information, contact your Woodruff Sawyer Account Manager for information about how to avoid the pitfalls of Medicare and keep your employees happy and healthy.