Leaving Group Health
Group health insurance is available through most employers. With this plan, you and your coworkers’ risks and need for insured illnesses, conditions, and health needs are shared amongst those under the plan, thus reducing the risk for the insurance company. With shared risk usually comes lower costs.
Companies offering group health coverage have a required participation rate (usually around 75% of eligible employees), and premiums are often shared between the company and the employees. You do not have to accept your employer’s health insurance if you don’t want to, but, because your company is required to pick up come of your costs, often this is the best coverage you can get for the amount of money you will pay.
When to Leave Your Group Health Plan
Besides retiring or quitting your job, there are a few reasons why you may decide to leave your group health plan. One very simple reason is that the coverage offered doesn’t work for you. If you need coverage not available with the plan, or you think you’re overpaying for coverage you don’t need, you may be able to find a better-suited plan elsewhere.
Another common reason is for those with larger families—most companies charge you more to cover family members than to cover you. This can get very expensive very quickly for larger familes and may be unreasonable for your situation. Just be sure to compare and shop around for plans before making the switch.
Before You Leave Your Group Health Insurance…
If you decide that your employer’s group health plan isn’t right for you, you may consider leaving it to seek other options even if you aren’t yet eligible for Medicare. Be sure to keep in mind the cost—group health premiums are tax-deferrable, so if you get a new plan, you will likely have a bit of extra cost added into your tax payments. And now, you won’t have anyone offering to cover a large portion of the cost.
Enrolling in Medicare After Leaving Group Health
Your group health insurance will almost certainly end after you leave the position or retire. When it comes to seniors and retirement, this process will look different if you’re eligile for Medicare (age 65 and up). Some people will retire before they are eligible for Medicare, while others will become eligible for Medicare while still working.
For most people, the best time to enroll in Medicare is when you turn 65. But, if you are covered under your employer’s plan and your company has at least 20 empoyees, then you can usually delay your Medicare enrollment without penalty.
The key here is that your company’s health plan must offer prescription drug coverage that is at least as good or better than Medicare prescription drug coverage. If you are unsure about this, you should speak with your company’s benefit specialist or give us a call.
Most people who are still working and covered under their group plan will delay Part B until they are ready to retire. This is because for most people, Part B has a cost. It usually doesn’t make sense to get it until you have to.
When you are ready to come off of your employer’s plan, you should immediately start the process to enroll in Medicare Part B (and A if you didn’t when you were first eligible). This is done through the Social Security administration, and can take several weeks to process, so don’t wait. Give us a call – we can walk you through the process step-by-step.