Medicare for Employers - How Myths Limit the Impact for Both Employees and Employers

Medicare can provide the right coverage for employees who are 65+ and can provide employers with a valuable tool in managing their healthcare budget. But misconceptions about Medicare often limit these potential benefits for both parties. Here are several commons myths:

Myth #1 - Traditional Medicare is good. Medicare Advantage is bad

Reality - There are numerous pros and cons with both forms of Medicare, but painting with a broad stroke is not helpful. Everyone who is Medicare-eligible has their own needs, desires and circumstances that need to be uniquely addressed. Gaining the right information on the options available to them will assist in their decision-making process

Myth #2 - Medicare is just for those who are retired

Reality - Medicare has always been for those who are 65+ regardless of their employment status

Myth #3 - Employer-sponsored healthcare coverage is less expensive for the employee because the employer pays part of the premium

Reality - The premium is only part of the cost for the employee. When deductibles, co-pays and co-insurance are added, Medicare is often less expensive. One reason is that both employees and employers have been funding Medicare for as long as employees have been working via the Medicare payroll tax. However, if they are working and remain on their employer-sponsored health plan, they are paying for two coverages, but only using one...

Myth #4 - An employer-sponsored plan offers better benefits than Medicare

Reality - Medicare provides more options and potentially a better fit. A typical employer will offer 2 - 4 plans to all employees. Medicare provides those 65+ with a myriad of options to choose from. In addition, Medicare was built for those 65+ and offers benefits that are important to that age segment. An employer-sponsored plan offers benefits for all age groups and some have no value to those 65+

Myth #5 - An employer may only have a few employees who are 65+ and therefore it is not worth focusing on this age segment

Reality - The cost impact of the 65+ population far outweighs the number of employees that fall into this category because (A) The healthcare costs associated are 2.5 times the cost of those under 65; (B) Many 65+ employees have 65+ spouses who are also on the plan and; (C) When an individual moves from the group plan to Medicare, virtually all associated healthcare costs are eliminated

Myth #6 - Our HR Team already addresses Medicare questions from our employees

Reality - Most individuals approaching Medicare don't know what questions to ask. As an example, the Kaiser Family Foundation states that, on average, an individual interested in Medicare Advantage has 43 options to consider. They need guidance from someone with deep Medicare expertise. And the employer needs to do more than answer questions. It needs to have a Corporate Medicare Plan that leverages Medicare for both employees and the organization that employs them

Myth #7 - I can't leave the employer-sponsored plan when I turn 65+ because my spouse is not yet 65 and they need the group plan coverage

Reality - It varies by group plan type and the employers' prerogative, but many employers let the spouse remain on the plan even if the employee moves to Medicare

Medicare has the potential to have a profound impact on employees in providing them with the right coverage to meet their unique needs and on employers in providing them a powerful healthcare cost containment tool. However, reaching that potential means overcoming the myths and misconceptions that get in the way. Employers need a Medicare Advisor to help them build the right Corporate Medicare Plan for their organization. Employees need a Medicare Guide who can help them find the right plan for their financial and physical health.