What Happens To Your Medicare After You Return To Post-Retirement Work? Part I

Question: I retired after I turned 65. I started Medicare and added other insurance to that. I also started to collect my Social Security. Now I am seriously considering going back to work. Will that be a problem? What do I do about Medicare?

Answer: I have been meeting a number of older individuals who are missing ‘the going to work’ piece of their life. Some individuals return to work because they loved it and find themselves lost without that work. Other individuals return to work because they have found a new and interesting opportunity to use their skills in a different work place. Either way, no matter what your situation, I am always glad to see people doing what they like to do and want to do.

This is really a two-part answer. I will answer the first part about Medicare today and then next week I will address the Social Security Retirement part of the answer. The answers are different for each of those questions.

The answer is also different when we talk about Medicare A and Medicare Part B and Part D.

For Medicare Part A, if you choose to end your coverage you must repay any benefits you received from Medicare Part A. So, if you were hospitalized, or had any claims under Part A you would have to repay those benefits. For this reason and the fact that Medicare Part A does not have a premium for most Americans I would recommend you continue your Medicare Part A coverage.

At the time you retired, you correctly started on Medicare A and B. Once you signed up for Medicare, you also signed up for additional insurance. For the issue of returning to work it doesn’t matter whether it is a Medicare Advantage Plan or Medicare A & B + Medicare Supplement Plan + Part D plan, the answer is the same for this question.

The answer about Medicare in general has to do with the size of your employee group (20 or 100 employees). The rules are different for those on Medicare due to a disability and younger than 65. For Disabled individuals the employee group is 100 employees.

If the employee group is less than 20 employees (100 employees if disabled), you must stay with Medicare A & B. I would advise you continue to stay on Medicare A & B and your other insurance products. You could if you wanted to stay on Medicare A & B and then enroll into the Employer Group Health Plan (EGHP). In that situation you would then drop your other Medicare products (Medicare Advantage Plan or Medicare Supplement Plan and Part D plan). If you are returning to work and the employee group is more than 20 employees (100 employees if disabled) you can then decide if you want to enroll in the employee group health plan or stay on Medicare and your other products. If the employee group is more than 20 (100 employees if disabled), you could drop Medicare Part B and your other insurance products.

Once you are eligible for the Employer Group Health Plan (EGHP) and wish to choose that product for your coverage, you would contact Medicare to disenroll from Medicare Part B. You would also cancel your other insurance products. Remember that Medicare products always end and begin the first of the month, so timing is important. You may be doubly insured for a few days which is better than having a gap in insurance.

Before you decide to enroll in the Employer Group Health Plan (EGHP) be sure to evaluate the coverage and cost when compared with your Medicare products. Sometimes the Employee Group Health Plan is better and sometimes the Medicare Products are better.

The process for dropping your Medicare Part B coverage involves contacting Social Security Administration (SSA). They will require a written request turned into SSA. You may be required to have a personal interview, either in person or over the phone. The decision to drop Medicare Part B is important so this personal interview with SSA staff ensures you are making an appropriate decision. The SSA staff will give you this form and help you complete the necessary paperwork (Form CMS 1763). The completed form is turned into SSA for processing. Your Medicare will end on the last day of the month SSA receives the form. So think carefully about the timing of this paperwork. You do not want to terminate your Medicare on July 31 if your employee plan will not begin until Aug. 14. In this scenario, I would recommend turning in Form CMS 1763 in August for an August 31st Termination of Medicare B. That means you are doubly insured for part of the month of August.

I would also recommend reaching out to SSA via phone call or walk-in visit to talk to them about the timing of this process. There are times when you can schedule an appointment pretty quickly with SSA staff, other times you may wait up to six weeks for an appointment. I never recommend waiting until the last minute to turn in paperwork to any organization, and SSA works best if it is not a last minute step.

Another interesting fact in your situation; You currently pay $134 for your Medicare Part B (some individuals pay less than that depending on when they enrolled). If you drop your Medicare Part B coverage now at that $134 rate, when you re-enroll into Medicare Part B later, you will have that same rate of $134, even if the rate at that time is more than $134. That is an interesting benefit.

The decision for Medicare Part D requires you evaluate whether your new Employer Group Health Plan (EGHP) includes “Creditable Coverage” for your prescription drugs. If the EGHP has “creditable coverage” for your medications you do not need additional coverage through your Part D plan. Part D coverage has nothing to do with size for the employee group. If the EGHP does NOT provide ‘creditable coverage” than you must continue to purchase prescription drug coverage with a Part D plan approved by Medicare.

Most EGHP plans provide “creditable coverage,” but you must check this before you make your insurance decision. The person who reviewed your insurance coverage at your new job, should be able to answer this question for you.

I would like to wish you good luck in your new career. You have a great volume of skills and knowledge that our workforce will benefit from. Next week we will consider the Social Security Retirement part of this question.

To contact Janell Sluga, GCMC with questions or concerns, please call 720-9797 or e-mail her at janells@lutheran-jamestown.org.