January 01, 2013

Medicare Enrollment Strategy for Those Actively Employed Beyond Age 65

Labor force participation by persons age 55 and older has been steadily increasing since the mid-1980s. Even during the depths of the recent period of declining employment before recovery began in 2010, the rate of employment of men age 55 and older dropped by only one percent, and the employment rate for women in the same age group actually rose by one percent.

It is increasingly common for employees newly eligible for Medicare at age 65 to remain in employment with employer-provided health coverage. The impact of attaining age 65 on enrollment elections under both Medicare and an employer’s health program appear complex and can be easily misunderstood. Accurate information about the interplay between those two available coverage regimes can help demystify a 65-year-old employee’s enrollment choices and guide him or her to logical and cost-effective decisions about healthcare coverage.

This article explores the Medicare choices facing long-service employees who intend to keep working beyond age 65 for an employer offering comprehensive, active-employee health coverage. In order to simplify an exploration of those choices, let’s compare the decisions of two similarly situated employees with different perspectives. The first employee (let’s call him John) is married, but his spouse is also working and has her own separate health coverage. Let’s assume John’s coworker (let’s call her Sue) is in exactly the same situation.

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