How These Changes Affect Those Over 65 and Still Working, Covered Under Employer Health Plans

Many people continue to work past the age of 65 and stay with their current employer coverage instead of going on Medicare. This can be done as long as the Employer Coverage is considered CREDITABLE coverage in the eyes of Medicare.

What is CREDITABLE COVERAGE you ask?

Creditable coverage in terms of both medical and prescription coverage, in the eyes of Medicare, is coverage that is at least as good as the medical (parts A and B of original Medicare), or as in the case of prescription coverage, is at least as good as Medicare Part D coverage. For prescription coverage it has not been that difficult to determine this until NOW!

By the way COBRA is not Creditable Coverage! Penalties may follow.

With the advent of a $2000 out of pocket maximum on Prescription Drug Coverage through Medicare, many employer plans may not have prescription drug coverage that is at least as good as Medicare and therefore will not be considered CREDITABLE COVERAGE.

How this affects any working employee who is on group health coverage through an employer, is that once they do go on Medicare, and get PART D COVERAGE (Stand Alone or through an Advantage plan) they will then be assessed a penalty that will stay with them for the rest of their life for every month they could have had a Medicare Part D plan but did not take one!

EMPLOYER & EMPLOYEE RESPONSIBILITIES TO AVOID

Employers must alert all those affected by October 15th if their prescription drug coverage is creditable, if they are on a calendar year plan.

Employees must then determine whether they want to keep their employer coverage, even if it is not creditable, for 2025 or if they want to enroll in a Medicare Prescription drug plan. If they do enroll in a Medicare prescription drug plan, they must have Part A or be eligible for Part B coverage and have it in place and make the change before December 7th of this year.

Employers are not fined for not offering creditable prescription drug coverage for their employees, but employees must make sure that they are aware of these choices and make a choice. By the way, those people on an HSA (Health Savings Account) will not be considered as having creditable coverage since the lowest out of pocket maximum on those plans is $2100.