Helping Older Workers, Retirees Transition To Medicare

Is it the responsibility of the HR?

Leaders in Human Resources know that longtime workers have a lot to offer their employers. This observation is evidenced by the fact that 80% of the employers who responded to Willis Towers Watson’s 2018 Longer Working Careers Survey said they view their older workers “as crucial to their success.” 

This makes it all the more important for HR managers to serve this group of employees well, whether they retire or continue to contribute in the workforce. However, doing so does come with some unique challenges. Chief among them are healthcare benefits, which carry continually increasing costs for both employers and their employees, who are seeing more cost-sharing in their group health plans than ever before. Plus, Medicare enters the picture when employees turn 65. 

The good news is that Medicare presents a positive opportunity for employers and their employees and retirees. 

From the employer perspective, Medicare – the healthcare coverage that employees have been paying for over the course of their working careers – saves them money when qualifying employees or retirees make the switch. This past year, employer-provided premiums for single healthcare coverage cost nearly $7,000, and if qualifying employees or retirees enroll in Medicare, that’s a huge chunk of change employers can use to fund other business efforts. 

Showing just how much these savings can add up to, consider the case of one mid-sized employer that identified 188 individuals on its retiree coverage that could transition to Medicare. From this group, 123 voluntarily chose an alternate plan and the employer saved a whopping $1.1 million. 

Substantial savings can be appealing to employers. However, employers cannot force existing employees to make this transition. It’s up to the employee (with the exception of individuals in firms with fewer than 20 workers, who are legally required to sign up for Medicare). 

Increasingly, employees are realizing the incredible value of Medicare as an alternative to their employer-provided coverage—and employees are more frequently choosing to make the switch to Medicare while they’re still working. Medicare can be the better option for many older workers, especially if coverage for their spouse or dependents is not a concern. In fact, Medicare may provide employees with more low-cost options than their employer’s health plan: 93% of primary care physicians take Medicare, deductibles are usually under $200, and premiums are typically even less than that at $135.50. 

Having employees move to Medicare can seem to add complexity for HR. For example, Medicare has multiple parts (A, B, C and D), plans (Original Medicare, Medicare Advantage), supplemental insurance (Medigap) and associated lifetime penalties that can result if someone who is required doesn’t sign up in time. 

However, HR professionals do not have the carry the role of experts in this process. Medicare guidance is available to assist with this healthcare alternative for eligible workers and retirees. The potential upside can mean big savings for the employer, and for employees the opportunity to put more money toward their retirement instead of spending it on healthcare coverage. 

Benefits professionals who enlist help from a Medicare expert can take significant strides forward with their benefits package, reassuring workers of their value as they grow older, and helping employees and retirees make the healthcare decisions that are best for them. It also takes one worry off HR leaders’ already full plate. As one HR executive said, “I couldn’t believe how simple it was to provide the direct link to this Medicare expertise and let go of our concerns. Our employee was in good hands when she was trying to decide on healthcare coverage, and choosing between our employer group health plan and Medicare, she chose Medicare.”

In light of recent workforce trends where employees are sticking around after their 65th birthday, Medicare is something that employers and HR managers can no longer ignore. But it’s not something they have to dedicate substantial time and resources to, either. Many HR professionals don’t have the time to get educated on the ins and outs of Medicare, nor do they want to give out incorrect information to their employees. So, having a Medicare expert to turn to is essential, and it helps older workers and retirees feel supported.