5 Things to Know About Retiree Coverage
If you're retired and have Medicare and group health plan (retiree) coverage from a former employer, generally:
Medicare pays first for your health care bills
Your group health plan coverage pays second
How your retiree group health plan coverage works depends on the terms of your specific plan. Your employer or union, or your spouse's employer or union, might not offer any health coverage after you retire. If you can get group health plan coverage after you retire:
It might have different rules.
It might not work the same way with Medicare.
5 Things to Know About Retiree Coverage
Find out if you can continue your employer coverage after you retire. Generally, when you have retiree coverage from an employer or union, they control this coverage. Employers aren't required to provide retiree coverage, and they can change benefits or premiums, or even cancel coverage.
Find out the price and benefits of the retiree coverage, including whether it includes coverage for your spouse. Your employer or union may offer retiree coverage for you and/or your spouse that limits how much it will pay. It might only provide "stop loss" coverage, which starts paying your out-of-pocket costs only when they reach a maximum amount.
Find out what happens to your retiree coverage when you're eligible for Medicare. For example, retiree coverage might not pay your medical costs during any period in which you were eligible for Medicare but didn't sign up for it. When you become eligible for Medicare, you will need to enroll in both Medicare Part A and Part B to get full benefits from your retiree coverage.
Find out what effect your continued coverage as a retiree will have on both your health coverage and your spouse's health coverage. If you're not sure how your retiree coverage works with Medicare, get a copy of your plan's benefit booklet, or look at the summary plan description provided by your employer or union. You can also call your employer's benefits administrator and ask how the plan pays when you have Medicare. You may want to talk to your State Health Insurance Assistance Program (SHIP) for advice about whether to buy a Medicare Supplement Insurance (Medigap) policy.
If your former employer goes bankrupt or out of business, Federal COBRA rules may protect you if any other company within the same corporate organization still offers a group health plan to its employees. That plan is required to offer you COBRA continuation coverage. If you can't get COBRA continuation coverage, you may have the right to buy a Medigap policy even if you're no longer in your Medigap open enrollment period.
Since Medicare pays first after you retire, your retiree coverage is likely to be similar to coverage under Medicare Supplement Insurance (Medigap). Retiree coverage isn't the same thing as a Medigap policy but, like a Medigap policy, it usually offers benefits that fill in some of Medicare's gaps in coverage—like coinsurance and deductibles. Sometimes retiree coverage includes extra benefits, like coverage for extra days in the hospital.
