An employee turning sixty-five needs a decision made correctly, not a pamphlet.
The choice between staying on the employer plan, moving to Medicare, or coordinating both has real financial consequences and enrollment windows that do not reopen. Most employees are left to work it out alone, and the ones who get it wrong find out through a penalty that follows them for life.
Twenty employees decides which plan is primary.
This is the rule that governs the whole conversation, and it is size-dependent in a way that surprises smaller employers.
Twenty or more employees
The group plan generally pays first for an active employee aged sixty-five or over, and Medicare pays second. An employee can reasonably keep the group plan and delay Part B without penalty.
Fewer than twenty
Medicare generally pays first. An employee who declines Part B while relying on the group plan can find their claims substantially unpaid — the single most damaging misunderstanding in this area.
When coverage ends
Losing group coverage opens a special enrollment period for Part B. Employees regularly assume continuation coverage preserves that window in the same way active employment does, and plan accordingly. It does not work the way they expect.
Creditable coverage has no employer size exemption.
Of all the notice duties, this is the one most often missed entirely, because it has no headcount threshold to hide behind and it does not run off your plan year.
To individuals, before October 15
Every year, to Medicare-eligible individuals covered by your plan — which includes active employees, spouses and dependents, not just retirees. The date is fixed to the Medicare annual enrollment period, not to your renewal.
To the agency, within sixty days
A separate disclosure to the federal agency within sixty days of the start of your plan year. Two different obligations, two different audiences, commonly confused for one.
Creditable or not
Whether your drug coverage is creditable is a determination about your plan, not a formality. It changes what you must tell employees, and it changes what they should do.
If you offer it, run it as its own program.
Design and funding
Retiree arrangements, including reimbursement designs that let retirees buy individual or Medicare-supplement coverage, evaluated on cost and on what a retiree can actually use.
Administration that is separate
Billing, eligibility and communications for retirees work differently from active employees. Bolting them onto the active population is where errors accumulate.
One-to-one education
Employees approaching sixty-five get a conversation about their own situation — spouse, prescriptions, providers, income — rather than a handout. It is an hour that prevents a lifetime penalty.
What employers ask about Medicare and retirees.
When does an employee need to decide?
Around their sixty-fifth birthday, and the right answer depends on your group size. At twenty or more employees your plan generally pays first and delaying Medicare is often reasonable. Below twenty it usually is not, and a wrong assumption creates a lifetime penalty.
What does the employer have to send?
Creditable coverage notices — to individuals before October 15 each year, and to the agency within sixty days of the plan year start. A short task on a fixed calendar, and one that is regularly missed.
Can we just hand people a brochure?
You can, and most employees need more than one. This is a one-to-one conversation about a decision with permanent consequences, which is why we treat it as education rather than a placement.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Bloomfield Hills, MI 48304
248.370.8853
Colorado Springs, CO 80921
719.425.2649
Houston, TX 77084
281.404.5670
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