Group Insurance or Medicare
With over 25 years in the insurance industry our company has received all types of questions from clients and business owners pertaining to their insurance. However, there is one that is popping up more and more now that people are working longer and that is "do in need group insurance or Medicare now that I am 65". Unfortunately, we can not give a one size fits all answer to this question. There are different factors that come into play like: high income penalties, group insurance rates (your portion), how many employees does your company have, and several other factors that must be considered if you want to make sure that you do the best thing for your coverage.
Compare Group Insurance or Medicare
Group insurance is coverage that is provided by your employer. Medicare is a federal health insurance program that is broken up into four parts (A, B, C, D). Part A is funded by payroll tax and Part B is partly government subsidized and partly insured paid. The question we are covering is which coverage is better for you when you reach age 65, group insurance or Medicare.
The first thing you need to do before you do anything is ask yourself when you are going to retire. If you are retiring at age 65 - it doesn't matter which is better because when you quit working your group insurance goes away! If you are going to continue working then you will need to do the following steps:
- Tally up your costs. Find out what your group health insurance is costing you. Is it subsidized 100% or do you have to pay 50% of the cost.
- Income. What is your income and do you fall under the high income thresholds of Medicare? A single individual reaches the high income level at $85,000 per year in 2013. Depending on your income level it may not be cost efficient to enroll in Medicare Part B.
- Company Size. Medicare is primary for under 20 employees and secondary coverage for groups over 20 lives. There are different options like a group retiree medical plan that can be offered for those groups with less than 20 employees which can save the employer and employee a lot of money. It is group insurance or Medicare - you might be wondering? It is a supplemental insurance built for a group. Click Here to find out more about this plan.
There are other factors that are a little more complicated than I would like to present in an article but just know that when you are comparing group insurance or Medicare you need someone who knows what they are talking about. Not just a regular health insurance agent, but someone who specializes in Medicare. Call 1-877-936-2991.
Group Insurance or Medicare Example
I had a business owner call a few months ago and he was a high income earner ($500k+). Due to the penalty with Medicare and his low premiums for his group health plan. It was not cost efficient for him to leave the group plan. It was going to be $400 more per month or $5,000 roughly per year.
If you are leaving the group plan make sure to get a Medicare Supplement. Most people want a plan that covers the gaps and allows you to go to any Medicare doctor. Medicare Advantage plans change each year and it is not a plan that you can hang your hat on. We hope you enjoyed this article and please don't hesitate to share.
Offering Supplemental Medicare plans - Medigap and Dental Insurance