Retiree insurance is a form of health coverage an employer may provide to former employees. Retiree insurance almost always pays second to Medicare. This means you need to enroll in Medicare to be fully covered. Some retiree policies require you to sign up for Parts A and B once you become Medicare-eligible.

You may be able to keep your retiree insurance as primary after you become Medicare-eligible if you have:

• End-Stage Renal Disease (ESRD)
• A Federal Employees Health Benefits (FEHB) plan and you delay enrolling in Part B, though you may face penalties and gaps in coverage if you choose to enroll in Medicare later

You may want to keep your retiree plan if it provides coverage for Medicare cost-sharing (deductibles, copayments, coinsurances) and you can afford its premium. If the plan offers prescription drug coverage that you like, find out if you can delay Part D enrollment. Speak to your benefits administrator or your employer’s human resources department to find out if you can choose to keep certain parts of your plan (e.g., just the drug benefit or just the health benefit) and what your costs will be. Some plans will not allow you to drop drug coverage without losing your health coverage, and vice versa. Also keep in mind that your spouse and dependents are not eligible to use your Medicare coverage and may need other insurance if you drop your retiree plan.

Rather than provide retiree insurance, some employers sponsor Medicare Advantage Plans or group Medigap policies for their Medicare-eligible retirees. These plans often combine your Medicare and retiree health benefits. Some employers require that you join their sponsored Medicare Advantage Plan to continue getting retiree health benefits after becoming Medicare-eligible. You can always choose not to take your employer’s coverage and sign up for Original Medicare or a different Medicare Advantage Plan, but keep in mind that you may not be able to get that retiree coverage back if you want it at a later date.

For more information on how your retiree benefits coordinate with Medicare, contact your benefits administrator or your employer’s human resources department.