One of the unintended consequences of the new Part D rules is how it may affect those who are over 65 and have opted to stay in their employer health plan. If you, your parents or friends are over 65, still working, and relying on employer health insurance, a new Medicare rule could significantly impact your prescription drug coverage and costs.
Currently, seniors can avoid late penalties for Medicare Part D (prescription drug coverage) if their employer’s plan offers similar coverage to traditional Medicare drug plans. However, a recent change under the Inflation Reduction Act could have major consequences for seniors who delay Medicare enrollment. Because of the new Part D coverage, with a $2,000 out-of-pocket maximum, many employer plans may no longer be deemed equivalent and therefore will no longer qualify.
WHO MAY BE AFFECTED
Seniors working past age 65
Those relying on employer health insurance
Employees with employer plans exceeding the $2,000 out-of-pocket maximum.
WHEN DOES THIS TAKE EFFECT?
While some parts of the Inflation Reduction Act have already been implemented, the $2,000 out-of-pocket maximum and its impact on employer-sponsored health insurance for Medicare-eligible individuals will take effect on January 1, 2025.
This means that as of the beginning of next year, employer plans must meet new, stricter standards to be considered creditable coverage and exempt seniors from Medicare Part D late enrollment penalties.
If your employer plan no longer qualifies, you may face a late enrollment penalty when you eventually enroll in a Medicare Part D or Advantage plan. This penalty can be significant and permanent.
WHAT SHOULD YOU DO
If you haven’t heard from your employer by January 1st, contact them and ask if your plan is creditable coverage. They are required to notify Medicare Part D eligible individuals of their status.
Know that you can drop off of an employer plan at any time and enroll in Medicare with a Special Enrollment Period.
TAKE PROACTIVE STEPS TODAY
Remember the importance of early planning to protect your health and financial well-being in retirement.
We’re here to help you navigate the complexities of Medicare.
If your employer plan is not creditable, we can help you evaluate your Medicare options.
Be sure to share this information with your family and friends!
If you have any additional questions, contact our team today!
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