Roadmap to Medicare Turning 65 COBRA – HTA Insurance Services

Roadmap to Medicare

Turning 65, COBRA

More information on:

Your Roadmap is based on…

You are approaching age 65.
Your Primary Insured is not (or will not be) actively working at the employer providing your benefits.
You are (or will be) covered under the group health COBRA plan.

Recommendation Summary:

Since you do not have creditable coverage (group coverage based on current active employment), you are required to enroll in Medicare during your Initial Enrollment Period (IEP).
In order to avoid a late enrollment penalty and have full coverage, we recommend that you enroll in both Part A and Part B during your Initial Enrollment period.
Schedule your Roadmap to Medicare appointment with an HTA Medicare Advisor if you have not done so already.
How to Enroll in Medicare Part A and Part B at age 65

What is my deadline to enroll?

Your Initial Enrollment Period (Turning 65) is 7 months surrounding your 65th birthday to enroll online. Your effective date will be the 1st of the following month that you enroll.

Do I need Medicare to have full coverage?

Yes. Medicare Who Pays First states that Medicare becomes primary insurance once you turn 65. COBRA insurance will become secondary. If you do not enroll in Part A and Part B you may not have full coverage.

Will I receive a penalty if I don’t enroll now?

Yes. You will receive a late enrollment penalty because COBRA coverage is not considered creditable coverage to Medicare. Creditable coverage is defined as group coverage based on current active employment. COBRA is not based on active employment.

Secondary Insurance Options

Since your COBRA benefits are considered secondary insurance to Medicare, you MUST be enrolled in Medicare A and B to have full coverage. You may have the option to keep your COBRA Plan as secondary or elect a Medicare Supplement and Medicare Prescription Drug Plan as secondary.

Medicare or Group Health?
Does it make sense to drop my COBRA plan to enroll in a Medicare Supplement Insurance and a Medicare Prescription Plan?

A general rule of thumb is that if your COBRA plan costs on average less than $150-200/month/person or about $2000-2400/year/person, then your COBRA plan is more cost effective than Medicare.

Please add up the premiums, copays, deductibles and coinsurances (everything except Rx cost) of your COBRA plan for comparison.

However, if you think you may pay more than that, or you are seeking lower deductibles and copays, then you may want to explore a Medicare Supplement further.

Please contact us for a Medicare Cost Analysis to help you better evaluate if your COBRA or a Private Medicare Supplement and Medicare Prescription plan is more cost effective.

If Medicare Secondary coverage is more cost effective than your COBRA plan, you may want to replace your COBRA plan.

Additional Considerations
Underwriting Considerations

Medicare Supplement Insurance has an Open Enrollment Period for the first 6 months that you are enrolled in Medicare Part B. During this time, you will be able to purchase ANY medicare supplement plan with no medical underwriting.

If you stay with your COBRA plan and decide to elect a Medicare Supplement later (when COBRA ends, but you have already been on Medicare for more than 6 months) you will have SOME plans available on a Guaranteed Issue basis. There will be less options available that do not require you to answer medical questions to qualify.

Medicare Advantage Plans and Medicare Prescription Drug Plans provide an Initial Election Period when you enroll in Medicare, a Special Election Period when you come off your COBRA plan, and also allow you to change plans once a year during the Annual Election Period (October 15^th through December 7^th) without medical underwriting.

Additional Considerations

Effective Date Considerations- Reminder, when you apply for Medicare at age 65, you cannot choose a specific effective date for the benefits (and premiums) to start. The only way to influence the effective date is by which month you enroll online. Please contact us ASAP if you are trying to achieve a specific start date that is something other than the first of the month of your 65th birthday (possibly to coordinate with your group plan ending).

Important HSA Considerations– You cannot continue to contribute to your Health Savings Account (HSA) once you enroll in Medicare Part A. If you are enrolling in Medicare after age 65, your Part A effective date may be back dated up to 6 months. Please contact us to discuss the HSA maximum contribution rate for you circumstances. Click Here for Details and Rules.

This does not apply to Flexible Spending Accounts (FSA) or Health Reimbursement Accounts (HRA). Medicare does not have any restrictions on these types of accounts.