Employees are eligible to retire at age 55 with 15 years of service. There is no mandatory retirement age. Employees who retire prior to the age of 65 are not eligible for Medicare enrollment and they will receive information regarding COBRA coverage, healthcare coverage through the Healthcare Marketplace, or coverage through private healthcare exchanges.
Medicare is our country’s health insurance program for people aged 65 or older. You may also qualify if you have permanent kidney failure or receive Disability benefits. More information on Medicare can be found on the Medicare website.
There are four parts of Medicare to match your medical and budget needs.
Part A (hospital insurance)
Part A helps pay for inpatient care at:
- Skilled nursing facilities
It also covers some outpatient home health care.
Part A is free if you worked and paid Medicare taxes for at least 10 years. You may also be eligible because of your current or former spouse’s work.
Part B (medical insurance)
Part B helps cover:
- Services from doctors and other health care providers
- Outpatient care
- Home health care
- Durable medical equipment
- Some preventive services
Most people pay a monthly premium for Part B. The exact premium depends on your income level. at Medicare.gov.
Part C (Medicare Advantage)
Part C is known as Medicare Advantage. It’s an alternative to Parts A and B that bundles several coverage types, including Parts A, B, and usually D. It may also include:
- Dental insurance
You must sign up for Part A or Part B before enrolling in a Medicare Advantage plan.
Part D (prescription drug coverage)
Part D helps cover prescription drug costs.
You must sign up for Part A or Part B before enrolling in Part D.
Health Savings Accounts (HSA) and Medicare
Your enrollment in any part of Medicare (A, B, C, or D) makes you ineligible for HSA contributions, including employer funding. This is true even though Part A is free for most people.
It is important to understand how Medicare may impact your HSA before electing a contribution amount or even enrolling in the HDHP medical plan. Once you are enrolled in Medicare, you are not legally allowed to contribute to your HSA.
If you are Medicare eligible, still working, and covered by Butler’s high deductible health plan (HDHP), you may consider postponing your Medicare enrollment.
You should get a letter in the mail from Medicare prior to your 65th birthday explaining the rules to avoid late entrance penalties. Medicare requires creditable prescription coverage in order to avoid late enrollment penalties and Butler’s prescription coverage is considered creditable.
Even if you decide to postpone your Medicare enrollment until after you quit working, if you enroll in Social Security, you will be automatically enrolled in Medicare Part A.
The law does not allow you to enroll in Social Security and opt out of Medicare Part A. So, if you decide to postpone Medicare, you will also need to postpone Social Security benefits in order to be eligible for HSA contributions.
If you do not enroll in Medicare and your spouse does enroll in Medicare, his or her enrollment will not affect your eligibility to make contributions to your HSA. Your spouse’s qualified expenses can still be paid from your HSA.
NOTE: Your spouse’s Medicare premiums can’t be paid from your HSA if you are not also enrolled in Medicare.
You should seek advice from your financial adviser and Social Security to determine if postponing Social Security/Medicare benefits is the right option for you.
Butler University refers current and future retirees to independent senior insurance consultant, Andrew Flittner. Andrew does not work for Butler University but has assisted many Butler employees as they transition from Butler’s group health plan to Medicare. Andrew can be reached at 317-222-8891 (office), 317-717-1085 (cell), or email@example.com.