When Your Medicare-Age Client Is Still Working

By Roxanne Anderson

For agents who sell Medicare plans, the stereotypical prospect has been someone with graying hair, approaching the age of 65 or already past it, and retired. There have always been those who don’t fit this stereotype. But lately, you’ve probably noticed more of them.

Traditionally, getting to the big 6-5 has meant two things: one, that you’re now eligible for Medicare based on your age; and two, that you’re able to receive full retirement benefits from Social Security. While this milestone birthday still marks the age of Medicare eligibility, it’s no longer the Social Security full-benefit retirement age. For those born in 1955 (and turning 65 next year), the full-benefit retirement age is 66 years and two months; this age will slowly increase to 67 for those born in or after 1960.

The Bureau of Labor Statistics projects that 36% of 65- to 69-year olds will be in the workforce by 2024. In addition, a 2014 AARP study tells us that 70% of experienced workers plan to work full time or part time in retirement. This whole paradigm shift affects not only seniors, but also those who work closely with this population. If you’re an insurance agent who sells Medicare plans, it’s time to consider how you mustadjust to better serve your clients and their changing needs.

If Your Client Is Still Working

If your client is receiving employer coverage from an employer with 20 or more employees, they have options. Your client doesn’t have to switch to Medicare. They could delay Medicare Parts A and B without penalty. Your client could also sign up for original Medicare, but it’s probably not worth it for them to pay for Part B since their employer coverage would be the primary payer. However, as long as they qualify for premium-free Part A, they should probably enroll in that.

Is your client receiving employer coverage from a company with fewer than 20 employees? The employer could require the client (and their spouse, if the spouse is on the insurance) to switch over to Medicare once they’re eligible. If this happens, Medicare will likely act as the primary payer and the employer plan will pay secondary.

If Your Client Plans To Rejoin The Workforce

One Home Instead survey found that, after retirement, approximately 39% of U.S. workers aged 65 or older rejoined the workforce. If a client who is on Medicare “unretires,” they’ll have to decide whether they want to enroll in employer coverage, keep their Medicare coverage or both.

It’s important to be aware, and make your client aware, that if they decide to unenroll from Medicare Part B when they (or their spouse) rejoin the workforce, they may have to pay a penalty when they re-enroll in it later on. The exception would be if they get a Special Enrollment Period to join Medicare Part B after their employer coverage ends.

Signing Up? Or Delaying?  

With your clients possibly having to make changes to their coverage, you’ll want to be sure they know how to do it. You don’t want a client assuming their Medicare coverage will start, or be delayed, automatically. Instruct your clients that they should contact their local Social Security office for assistance in enrolling in or dropping Medicare coverage. Let your client know that, if they receive their Medicare card in the mail, they can delay enrollment by following the instructions for sending back their Medicare card. Those instructions should come with the card.

When Open Enrollment Occurs

During your client’s Medicare Supplement (or “Medigap”) open enrollment period, they don’t have to pass underwriting to enroll in a Medicare Supplement plan. This is fantastic if your client has health problems. Additionally, companies cannot charge individuals more for their plan if they have health problems.

If your client has employer coverage and there are fewer than 20 employees at the company, they should get a 63-day period after their employer coverage ends to enroll in a Medicare Supplement plan with guaranteed issue rights. For a client with employer coverage through a company with 20 or more employees, or a client without employer coverage, their Medicare Supplement OEP should start when they sign up for Part B. People who miss this OEP likely won’t be able to enroll in a Medicare Supplement plan with guaranteed issue rights.

Warn Of Late Enrollment Penalties

What your clients don’t know, they don’t know. Late enrollment penalties can exist for Medicare Parts A, B and D. Whether or not someone incurs a penalty depends on their unique situation — mainly whether they have employer coverage and what kind, the size of their employer, and when they sign up for Medicare.

If a client incurs any penalties, they’ll pay them for the rest of the time they’re on Medicare. The penalties themselves may only be a few extra dollars a month, but they’ll add up over time!

Let Clients Know You Can Help

Around the time people approach retirement age, they start receiving a lot more mail about Medicare plans. To stay at the forefront of your clients’ minds, we recommend reaching out to clients who are 64, and let them know that postponing their retirement may affect their Medicare enrollment deadlines.

To rise above the noise even more, consider giving your clients a unique way to remember you. Don’t just hand them a business card or flyer that could get lost among all the other papers they’re receiving. Give them something with your info on it that’s harder to lose, like a backscratcher, fly swatter or magnet!

Don’t Make Assumptions

By now, you know it’s important not to assume your clients will leave their job once they turn 65, or that they’ve already left their job if they’re over 65. There are also a few other items you need to make a conscious effort to avoid assuming. For example, if they’re still working, don’t assume that it’s full time and don’t assume they have employer coverage. On that note, don’t assume that a client who isn’t working doesn’t have employer health coverage. They may have it through a spouse.

How can you best avoid making assumptions like these and others? Make it a habit to ask your clients specific questions that get you the information you need to really help the client and serve them best.

As an agent, you already assist clients in all walks of life, all ages, incomes and health backgrounds. Just because someone may fit the mold for a product based on one factor, such as their age, it doesn’t mean that product is the right solution for them at that time. The world is changing, as it always will with time. The participation rate of older Americans in the labor force is shifting.

All this should mean more to you than a simple change in statistics. It means there’s a change in your book of business. If you recognize this transition and shift your business strategy, you’ll be well ahead of the curve.

Roxanne Anderson is an editor at Ritter Insurance Marketing, a national field marketing organization in the senior health and life insurance markets. Roxanne may be contacted at [email protected].

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