For Medicare insurance agents, the T65 market is a great opportunity. To capture as much of this opportunity as possible, make sure you’re casting a wide enough net. Although seniors don’t age into Medicare until they turn 65, they may have questions before then, and if they’re still working, they may not want to enroll immediately. Here’s how to help the 64 to 67 age brackets navigate Medicare.
Retirement Age and Shifting Norms
Age 65 is often seen as the traditional age of retirement, but many people don’t quit working. According to Business Insider, about 20% of Americans over the age of 65, or about 10.6 million people, were working as of February 2019.
In fact, according to the Deft Research 2020 Age In Study, the proportion of 65-67 year-olds delaying their enrollment rose steadily between 2008 and 2018 as the economy improved. Now, with COVID-19, that trend may be changing.
The pandemic forced some older workers into retirement. The Urban Institute says that close to 1 million workers over the age of 65 left the workforce between February 2020 and February 2021. But despite this significant drop, many seniors continue to work, and as the pandemic eases, the number of working seniors may increase. According to The Motley Fool, a recent survey found that 57% of workers plan to work during retirement.
Some people continue working past 65 because they can’t afford to retire. Others simply don’t want to retire. Regardless of the reason, working past 65 can make Medicare issues more difficult to navigate. Seniors who find themselves in this situation may have a lot of questions about enrollment – and you can position yourself as a helpful resource.
Automatic Enrollment and the Initial Enrollment Period
Many seniors will want to know exactly how the enrollment process works and whether they will be enrolled automatically. The answer depends on each person’s situation.
You can start collecting Social Security retirement benefits at age 62, although many people delay collecting benefits to increase the benefit amount. If you are receiving Social Security or Railroad Retirement Benefits before you turn 65, you may be enrolled in Medicare automatically. You should receive a Welcome to Medicare packet and Medicare ID card about three months before your 65th birthday.
If you are automatically enrolled in Medicare and you do not want to receive benefits yet, you can follow the instructions that come with your Welcome to Medicare packet to cancel your enrollment.
If you’re not enrolled automatically, you can enroll during the Initial Enrollment Period.
The Initial Enrollment Period lasts for seven months, and it covers your birthday month, the three months before, and the three months after. If you want coverage to start ASAP, you should enroll during the first three months of the initial enrollment period. This way, coverage will begin on the first day your birthday month. If you wait to enroll, coverage will start on the first day of the month after you enroll. Note that people whose birthday lands on the first of the month have slightly different dates. See this Medicare page for details.
Delaying Medicare When You Have Job-Based Insurance
Some seniors are eager to enroll in Medicare as soon as possible, but others may want to wait. The seniors you work with may need help navigating whether they should enroll in Medicare as soon as possible or wait and see how these decisions will affect them.
Missing your Initial Enrollment Period can be a big problem. If you don’t qualify for a Special Enrollment Period (more on that in a moment), you’ll have to wait until the General Enrollment Period, which happens between January 1 and March 31 each year. Your coverage won’t start until July 1, so you could end up with long coverage gaps.
You could also be charged expensive late enrollment penalties. The Medicare Part B late enrollment penalty is a 10% surcharge for each 12 month period you delayed enrollment. However, some people qualify for penalty-free late enrollment and a Special Enrollment Period based on their job.
If you have a group health plan through either your active employment or your spouse’s active employment, you may be able to delay enrollment without being hit with a late enrollment period. This means you can decide not to enroll in Medicare when you turn 65.
However, there are some potential issues to be aware of:
- Not all job-based coverage qualifies you for penalty-free late enrollment and a Special Enrollment Period. If the employer has fewer than 20 employees, for example, it may not qualify.
- COBRA coverage and retiree coverage do NOT qualify as insurance based on current employment. If you already have COBRA when you age into Medicare, your COBRA coverage will likely end when you turn 65.
- If you qualify, you will have an eight-month Special Enrollment Period that starts when coverage through the group health plan ends or when active employment ends, whichever occurs first.
These are just a few of the possible issues. Deciding when to enroll in Medicare can be a complicated decision, and the stakes are high. This CMS Fact Sheet provides guidance on deciding whether or not to enroll in Medicare at age 65, and this is a good resource to share with the seniors you serve.
Having More Than One Type of Insurance
Some of the seniors you work with may want to double up on insurance.
In some cases, you may be able to enroll in both Medicare and another type of health insurance. This can be beneficial, but it’s important to know which plan is considered the primary payer.
If you have job-based insurance and the employer has more than 20 employees, the job-based insurance will pay first, and Medicare will pay second. If the employer has fewer than 20 employees, Medicare will pay first, and the job-based insurance will pay second.
Helping Seniors Enroll in Medicare
As a Medicare insurance agent, it’s helpful to be familiar with the rules regarding job-based health insurance and Medicare. Many seniors will have questions about these issues. This Medicare.gov page has information on working past 65, and it’s another good resource to share with your clients.
It’s also important to consider these issues when marketing Medicare. The Deft Research 2020 Age-In study found that shopping activities tend to peak in the three months leading up to age 65, dropping or leveling off shortly after the IEP. However, for working seniors, this window may come later.
- Start approaching seniors at age 64, not 65. Seniors may start looking at their options ahead of their birthday, and if you don’t reach them first, your competition might.
- Partner with local employers or an agency that offers group benefits. For example, you could create a flier with Considerations for Turning 65 and stick it in the open enrollment kits.
- Keep older workers in mind when creating your website, social media feeds and direct mail marketing campaigns. Provide resources that can help them make well-informed decisions.
As always, contact Western Asset Protection at 800-955-5390 or reach out through our agent portal for assistance and guidance. We’re here to help!
