Whether your employees are young or more mature in age, chances are they have thought about retirement. But, thinking about it and planning for it are two different things. As an employer, you have the power to help employees feel more prepared for retirement and provide the knowledge they need to take the right steps. With a wealth of information available, it can be overwhelming to help employees navigate their options. Here are some commonly asked questions and answers to help prepare you for conversations with your staff: If an employee is enrolled in Medicare Part A or Part B, are they disqualified from being eligible for a contribution into a health savings account (HSA)? Yes, HSA rules state that a member can no longer open or contribute to an HSA when they enroll in Medicare. But, making contributions into an HSA with a qualified high-deductible plan prior to enrolling in Medicare can greatly help with out-of-pocket costs and premiums once someone is enrolled in a Medicare plan. Is there an annual limit on the dollar amount employers can contribute into an employee's HSA? Yes, the employer contribution is limited to the amount set by the IRS. The employer can contribute full, partial or no amount. You can find more information on HSA limits, as reported by SHRM by visiting this link: HSA 2019 limits. Is COBRA available for retirement prior to age 65? Yes, COBRA is available when a member leaves a group plan and complies with COBRA. Please note that COBRA coverage doesn’t allow a person to delay their Part B coverage without a late enrollment penalty because it is not coverage from a current active employer. Therefore, the retiree will likely have to pay a Part B late enrollment penalty if a retiree went for 12 months or more without Part B. The retiree will likely pay this penalty for as long as they have Part B. Do you have to purchase Part B to have Part A? No. Part A can be purchased without Part B. Part A is premium-free and available to all who qualify. There is a monthly premium for Part B which can be deducted from a member’s social security check, but it’s not required. More information can be found by visiting medicare.gov. Do you have a suggestion for employees who have an age gap with their spouse? Yes, if the spouse is under 65 and the member is over 65, the younger spouse can shop on their state’s marketplace for plans. Our direct dial for information on Blue Cross Individual plans is 1-877-4MY-BLUE. As an employer, if we offer an HRA, can our employee or their spouse contribute to an HSA on their own to save for retirement? Possibly, the IRS has very specific rules that must be adhered to when contributing to an HSA when the employer provides HRA contributions. Publication 969 at IRS.gov will provide more details and rules. (The member has to be enrolled in a qualified high-deductible health plan to open and contribute to an HSA. Our Master Class from July addresses consumer-driven health plans and HSAs. That presentation is available in the Past Webinars section of bcbsmmasterclass.com.) Should an employee reaching age 65 enroll in Medicare Part A while still employed and covered by an employer plan with 20+ employees? They could. It is their choice whether or not to enroll. If the employer plan is over 20 full-time equivalent employees, the group’s plan will pay primary. If they have not met the 40 quarters worked requirement, they would have to pay a premium. Is it true that you don't have to apply for Medicare after you turn 65 as long as you are actively working with employer paid health insurance, then, when you retire post 65, you can apply for Medicare with no penalty? Yes, when a member leaves group coverage they have an Special Election Period of eight months of which they can enroll in Medicare and select a Medicare Supplement or Medicare Advantage individual plan. Need more information on your journey through the workplace and healthcare? Check out these blogs:
- Financial Freedom: What is it and How Can You Help Employees Achieve It? Learn at Our Free Webinar
- Generational Warfare at Work? How to Get the Most Out of Multigenerational Teams
- Learn How Retirement Planning Makes Employees’ Dreams a Reality
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