What happens when your spouse is approaching 65 and they decide to retire and enroll in Medicare? If you are covered under their employer-based health insurance and are not yet 65 yourself, where will you get coverage? You have several options to consider, and it’s important to know the enrollment deadlines associated with each one, to ensure you have no costly gaps in coverage.
Health Insurance Through Your Employer
If you are working and your employer offers health insurance, you will be eligible for a Special Enrollment Period. This will allow you to enroll in your own employer sponsored plan even though it’s not open enrollment. Special Enrollment Periods are time-limited, usually 30 days from the loss of other coverage, so don’t wait too long. If you miss it, you’ll have to wait until the next Open Enrollment period to sign up, which would result in a period of time where you had no coverage.
COBRA is a federal law that requires employers with more than 20 employees to offer health care continuation to covered employees, their spouses, and dependents, for 18 months after a qualifying event such as retirement. You can sign up for COBRA coverage under your spouse, even if they do not elect to take COBRA. COBRA continues the same group coverage you had prior to your spouse’s retirement including medical, dental and vision. You have 60 days to decide whether to enroll. This 60-day term begins on the date of the qualifying event or, if later, the date of the election notification sent to you by the insurance company.
COBRA can be expensive. Enrollees pay the full premium plus a 2 percent administrative fee. Also, COBRA is temporary. If you will not be turning 65 during the 18 months of COBRA coverage, you will have to come up with another plan for coverage when COBRA ends.
If you will be turning 65 before the 18 months of COBRA coverage expires, you need to be aware of your own Initial Enrollment Period for Medicare during the seven months around your 65th birthday. Many people think if they have COBRA, they do not have to sign up for Medicare Part B when they become eligible. This is incorrect and can result in costly medical expenses and late penalties. You can cancel COBRA coverage if you enroll in Medicare when you are eligible.
Your State’s Health Insurance Exchange
You can find individual, affordable health care through the Texas Health Insurance Marketplace. Losing the coverage you had under your spouse’s plan will make you eligible for a Special Enrollment Period (60 days before the loss of coverage, and 60 days after the loss of coverage). This Special Enrollment Period is available even if you have access to COBRA continuation of your spouse’s coverage. You can compare the various plans and coverage levels offered by different insurance carriers. If you qualify based on income, you may be eligible for a tax credit or subsidy that you can use to lower your monthly premium.
Private insurance, or off-exchange health insurance, refers to individual/family health coverage that is purchased outside the health insurance exchange/marketplace. This means the plan is purchased directly from the health insurance company without going through the exchange. These plans still have to be fully compliant with the ACA. But premium subsidies and cost-sharing reductions are not available to offset the cost of off-exchange plans. The types of plans available and the premiums will vary based on the region where you live, your age, and the insurance company.
If you are losing coverage on your spouse’s employer based plan, and need help understanding your health insurance options, call us today. Our experienced and knowledgeable team is here to help.