Helping those turning 65 to navigate Medicare
As more baby boomers approach age 65, they are confronting the complexities of making first-time Medicare enrollment decisions.
“At many companies, retiring used to mean transitioning from your employer’s health plan to a retiree health plan,” said Paula Muschler, manager of the Allsup Medicare Advisor. “Now, rather than selecting from one or two employer-provided options, more individuals are faced with trying to navigate through dozens of different Medicare plan options,” Muschler said in a media release.
Only 25 percent of U.S. employers reported offering retiree health benefits in 2012, according to a recent Kaiser Family Foundation survey of employers with more than 200 employees. This represents a 7 percent drop from 2007. By contrast, in 1988, nearly two-thirds of employers (66 percent) offered retiree group health coverage, according to Kaiser data.
The big transition
Muschler encourages employers to discuss Medicare plan selection with their employees as they approach their 65th birthday. Employers can help employees navigate the following situations in the Medicare maze.
Employees turning 65 who plan to keep working. Those turning 65 may make their Medicare plan selections without penalties if they do so three months before their birthday, the month of their birthday, or three months after it; this timeframe is known as the individual’s “initial enrollment period.”
Traditional Medicare has two main parts: Part A is hospital coverage, and Part B is medical services. Part D, which became effective in 2006, is a federal program to subsidize the cost of private prescription drug plans.
Generally, all employees will benefit from enrolling in Part A when they become eligible because it is free. Employees have the option of enrolling in and paying monthly premiums for Part B and Part D coverage. Those who don’t enroll in Medicare Part B would need to receive a deferral from Medicare to avoid being subject to penalties when they enroll in the future.
Employees who are turning 65 and preparing to retire or who have already retired. For many retirees, employers provide no postemployment health coverage. And for some early retirees, reaching 65 could be the trigger to losing retiree coverage. “Since fewer employers offer retiree coverage, it’s important that people begin to study their options early enough to make good choices based on their needs,” Muschler said.
A key element for seniors in this situation is age; those older than 65 should have enrolled in Medicare when they reached their initial enrollment period. “Retiree coverage is secondary to Medicare, so they already would have Medicare Parts A and B,” Muschler noted. “But losing their group health coverage triggers their option to buy ‘Medigap’ coverage.” Private Medigap plans pay for services that Medicare doesn’t cover.
“We cannot stress enough that turning 65 is a critical time period for Medicare beneficiaries to consider what they need and how they will afford it,” Muschler said. “This is their opportunity to make first-time Medicare decisions that ensure they have the proper coverage and avoid penalties later on.”
To delay or not
According to the nonprofit California Health Advocates website:
If you delay enrolling in Part B when you are first eligible because you are covered by an employer health plan, you have 8 months to apply for Part B from the date you, your spouse or family member stops working, or the date the Group Health Plan (GHP) or Large Group Health Plan (LGHP) coverage ends—whichever is earlier. This 8-month period is called a Special Enrollment Period (SEP). If you enroll in Medicare Part B during this SEP, you will not be required to pay a late enrollment penalty.
If you do not enroll during this SEP, you won’t be able to sign up for Part B until the next General Enrollment Period (GEP), which is from January 1 to March 31 each year. If you wait to sign up during the GEP, your Medicare benefits will not begin until July 1 of that year, and you may be required to pay a late enrollment penalty that will be added to your monthly Part B premium for as long as you are covered.
Regarding Medicare Part D drug benefits, the California Health Advocates site further advises:
If you don’t enroll in a Part D (prescription drug) plan when you are first eligible because your coverage through an employer GHP or LGHP is creditable, you will only have 63 days to enroll in such a plan after your group benefits end. If you enroll in Medicare Part D within this 63-day period, you will not be required to pay a penalty.
As for coordinating coverage under the group plan with Medicare, employer size is a factor. If an organization has more than 20 employees, in most instances the group health plan is the primary payer and Medicare acts as the secondary payer. According to the Corporation for National and Community Service’s Senior Corp. website:
If the husband or wife is still working and has health coverage via their employer or union, Part A may still help pay some medical expenses not covered by any group plan. But that working spouse may choose to delay signing up for Medicare Part B until a later date. … Just remember you will have to pay a higher Medicare Part B premium simply because when you had the chance you didn’t take it.
If an employer has fewer than 20 employees, Medicare is the primary payer and the employer’s plan is the secondary payer. In this instance, it’s generally considered essential that employees turning 65 enroll in Medicare Parts A and B. If they don’t enroll, they will have to pay out of pocket anything that Medicare would have covered.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
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Republic West Remodeling pitches in for children’s charity project
Phoenix-area Republic West Remodeling helped out with a charity remodeling project for TGen’s Center for Rare Childhood Disorders Clinic, involving some of the company’s materials and labor in the construction of a new play area at the Center.
"The play area is the heart of the clinic and we are so thankful for Republic West for contributing to this cause," said TGen’s assistant development director Robyn Nebrich. "They did all the work required to take the clinic from an ordinary doctor’s office to a place where children can have fun and parents can feel at home."
The Clinic is currently under construction with a grand opening date set for Oct. 15, 2013.
TGen, or Translational Genomics Research Institute, is a non-profit research organization specializing in new treatments, therapies and cures for children with rare disorders.
California luxury home values up in second quarter
According to the First Republic Prestige Home Index issued by First Republic Bank, luxury home values in certain niche California markets experienced strong growth in the second quarter.
In the San Francisco Bay Area, values were up 10.9% year-over-year, as well as 5.0% since the first quarter. Los Angeles homes rose 6.1% since 2012’s second quarter, as well as 3.3% since last quarter. In the San Diego region, values were up 8.0% on a year-ago basis and 4.9% since last quarter.
“This was one of the best quarters in recent history for California luxury home prices in First Republic’s urban, coastal markets,” said Katherine August-deWilde, president and COO of First Republic Bank. “Limited inventory and growing demand from both U.S. and international buyers are driving the market. Many properties generated multiple offers. It was a very strong quarter.”
The average luxury home is valued at $2.9 million, $2.1 million and $1.7 million in San Francisco, Los Angeles and San Diego, respectively.