Helping Employees Prepare For Medicare: What Employers Should Know
When an employee nears 65, the Medicare questions often land on HR's desk. A few plan details can make that transition smoother for everyone.
Your longtime operations manager turns 65 next spring. She wants to know whether she has to sign up for Medicare, what happens to her health savings account, and whether her husband can stay on the company plan. Questions like these reach HR teams and business owners every year, and the answers depend partly on how your benefits are set up.
The Siekmann Company, empowered by GBQ, tackled them in Medicare Made Simple: Understanding Your Coverage Options. Aaron Siekmann, AIF, president of The Siekmann Company, hosted Andrew Gordon, a business development strategist and educator with MFS Investment Management.
Does Company Size Affect When Employees Need Medicare?
Yes. Suppose an employee is 65 or older and still working:
20 or more employees: Your group health plan generally pays first, and Medicare pays second.
Fewer than 20 employees: The order flips. Medicare pays first, so employees typically need Parts A and B to avoid coverage gaps.
Gordon noted this rule catches many people off guard. At larger employers, employees can often delay Part B, and some delay both parts. They can then enroll later during a special enrollment period without penalty.
Is Your Prescription Drug Coverage Still Creditable?
Employees who skip Part D at 65 need creditable drug coverage to avoid a late-enrollment penalty later. Creditable coverage is coverage expected to pay at least as much as standard Part D.
Siekmann flagged a change employers shouldn't miss. The Centers for Medicare & Medicaid Services (CMS) has revised the simplified method for determining creditable status, and the older method can't be used for plan years starting in 2027.
Plans that passed before may not pass now, especially some high-deductible designs. Employers also send annual creditable coverage notices to Medicare-eligible employees and report their status to CMS. If your plan's status changes, employees need to hear about it clearly.
How Do HSAs & Medicare Interact?
Once any part of Medicare begins, HSA contributions must stop. Premium-free Part A coverage can reach back as far as six months for someone who enrolls after 65. For that reason, Gordon suggested that employees planning to retire next year consider stopping contributions during this year's open enrollment. Payroll and benefits teams play a big role here, since employer contributions count, too.
What About Employees With A Younger Spouse?
During the Q&A, Siekmann raised a situation his team sees often: an employee ready to retire at 65 whose spouse is several years younger and covered on the company plan. Gordon noted that marketplace coverage is usually the main bridge until the spouse reaches Medicare age, and it isn't cheap. Some employees choose to work a few extra years for the health coverage alone. That's worth knowing as you plan for retirements on your team.
What You'll Learn In The Full Webinar
What Medicare Parts A, B, and D cover and cost in 2026.
How Medigap and Medicare Advantage differ for retiring employees.
When each enrollment window applies, including special enrollment after group coverage ends.
What employees should know about income-based premiums and Form SSA-44.
Which questions employees should bring to a Medicare specialist.
Support For Your Team's Next Chapter
Medicare transitions touch your health plan, your retirement plan, and your payroll process at the same time. The Siekmann Company's benefits administration and retirement plan advisory teams can help you keep those pieces aligned. They can also introduce employees to local Medicare specialists when they're ready to enroll. For the employee's side of the equation, see our look at planning for retirement health care costs.
Contact The Siekmann Company at 614.873.5200 to talk through your plan, or share the webinar with employees approaching 65.
Frequently Asked Questions
Do employees have to sign up for Medicare at 65 if they're still working?
Not always. If the employer has 20 or more employees and the group plan is creditable, many employees can delay Part B, and sometimes Part A. They can then enroll during a special enrollment period after coverage ends. At smaller employers, Medicare generally pays first, so enrolling at 65 is usually needed.
What is creditable coverage?
Creditable coverage is prescription drug coverage expected to pay, on average, at least as much as standard Medicare Part D. Employees with creditable coverage can delay Part D without a penalty. Employers must tell Medicare-eligible employees each year whether their plan's drug coverage is creditable.
When should an employee stop HSA contributions before Medicare?
Contributions must end once Medicare coverage begins. Part A can reach back up to six months for people who enroll after 65, so many employees stop contributing at least six months before applying. Employer contributions should stop on the same schedule.
