By Pension and Benefits Editorial Staff
Over the past decade, the number of employees older than 65 who choose to continue working has been increasing, and this trend is likely to continue. Employers can lower health care costs by helping older employees transition into Medicare plans, and older employees may discover that Medicare provides better coverage at a lower cost to them as well. To understand why Medicare might be a better option for both employers and older employees, Wolters Kluwer reached out to Tricia Blazier, director of healthcare insurance services at Allsup.
WK: How many Americans over the age of 65 are still in the workforce?
Blazier: In 2018, there were 9.7 million workers over the age of 65. By 2024, 25 percent of the American workforce will be made up of workers over the age of 55, an all-time high according to the Bureau of Labor Statistics. The 55-plus labor force has doubled in growth since 1998 and is expected to continue to rise over time.
WK: Can an employer require older workers to enroll in Medicare to save money on health care costs?
Blazier: No, an employer cannot require older workers to switch to Medicare. However, they can assist older employees in comparing Medicare with their group health care plan. Often the employee will find the coverage and providers offered by the two types of plans are comparable. In some situations, Medicare plans may provide better coverage. In addition, traditional Medicare and Medicare Advantage plans can be more affordable and have some inflation protection built in.
WK: Can an employer require older workers to enroll in Medicare Part D to save money on prescription drugs?
Blazier: No, an employer cannot require older workers to switch to Medicare Part D. Once again, however, there are similarities in prescription drug coverage offered through an employer’s group plan and Medicare. Prescription drug coverage is typically included in Medicare Advantage plans and for those seeking to pair drug coverage with traditional Medicare, low cost Part D coverage is often available.
WK: Is transitioning older employees to Medicare beneficial or harmful to the employee?
Blazier: Transitioning to Medicare is often a more affordable option for employees who want good coverage and a range of provider networks, specialists, and prescription drug coverage. Specifically, Medicare premiums can be as low as $135.50; deductibles less than $200; and out-of-pocket costs lower or altogether eliminated. Choice of where the employee obtains quality care may also be greater with Medicare plans. Networks are larger, with 93 percent of primary care physicians accepting Medicare, giving older workers more provider options.
WK: Can an older worker enroll in both Medicare and stay in the employer’s plan? If this happens, which plan would be the primary payer?
Blazier: Yes. An employee can enroll in Medicare while still under an employer’s plan. The employer’s plan pays primary if the worker is older than 65, enrolled in Medicare, and still working.
WK: Can an employer contribute to the cost of the employee’s Medicare plan?
Blazier: Yes. The employer can pay for Medicare Part B premiums or plans. Some employers may choose to put dollars into a flexible spending account (FSA) for the employee to use for a range of health care expenses.
WK: What kinds of reporting responsibilities do employers have when older workers are enrolled in Medicare?
Blazier: The employer must keep a record that benefits were available to the employee but were declined.
WK: What other things can employers do to support older workers?
Blazier: Employers should strive to actively improve every employee’s financial literacy and that includes access to resources that help the employee make smart health care decisions. Personalized help coordinating health care benefits from a third-party specialist can take the burden off of benefits and HR functions to provide the right level of assistance to each employee.
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