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Medicare Eligibility Effect on Retirement Health Benefits

The coordination of retiree plans with Medicare is a common concern among older Americans. Each retiree plan has different rules and regulations, and understanding how your plan works with Medicare is important to get the most out of the health care options available.

  1. Employer Benefits

    • Retirees generally must take Medicare because retiree plans provide secondary coverage. Medicare provides primary coverage, and the retiree plan fills in the gaps of Medicare---deductibles, coinsurances and so on. Retiree plans will not pay in full, and if they find out you are Medicare eligible, they may take back payments from the past.

    Federal Benefits

    • Federal retirees do not need to take Medicare. Their federal coverage is affected only if they decide to take Medicare, in which case federal retiree coverage will wrap around Medicare just as normal retiree coverage would.

    Military (TRICARE) Benefits

    • TRICARE for Life (TFL) is the military retiree coverage, and it works only if you get Medicare. TFL fills in the gaps of Medicare by paying for deductibles and coinsurances, just as normal retiree coverage would.

    Effect on Drug Coverage

    • Retiree drug plans should not be affected by Medicare eligibility alone. Most retiree plans are just as good as, if not better, than Medicare Part D, and this is known as being "creditable." If this is the case, the drug plan must provide this information in writing.

    Coordination With Part D

    • With some retiree plans, you cannot take Medicare Part D, or you risk losing your retiree drug benefit. However, other retiree plans work with Medicare by paying for copayments or covering nonformulary drugs.

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