The continuing rising cost ofhealth care has more individuals scrutinizing their options, andMedicare is finally garnering the attention it deserves. (Photo:Shutterstock)

Medicare is a complicated federal benefit to understand, but animportant area of concern for large employers given today'sworkforce characteristics. More Americans are choosing to keepworking well beyond their 65th birthday, and the Bureau ofLabor Statistics (BLS) predicts that 36 percent of 65- to69-year-old Americans will be a part of the workforce in 2024.

As workers move into what we used to think of as the retirementyears, they and their employers have choices to make about healthinsurance. This is especially true as employers experience a largermix of both post-65 active employees and post-65 retirees. Theseare two very different populations, with different needs—but bothseeing potential benefits with access to expert Medicare planassistance.

Related: Anticipated retirement age has changed by 6 yearssince 1991

Despite the assumption that employer-provided coverage is always“best,” it turns out Medicare might actually provide thesepopulations with better benefits at a lower cost. Employees who arebeing advised to work longer and find more ways to sock awaysavings for their retirement years also could heed the availabilityof Medicare as an important avenue for cost savings as health care inflation affects morehouseholds.

First, some background: For individuals to qualify for Medicarecoverage, they generally must be at least 65 years old (those whoreceive Social Security Disability benefits may be eligible, notmatter their age); a U.S. citizen or permanent resident of the U.S.for the last five years; and have paid Medicare taxes for 10 yearsthemselves, or be married to someone who has. Unless they havealready applied for and been receiving Social Security, Medicareenrollment isn't automatic.

Let's take a look at each of these groups for largeemployers:

Employees who work past 65

It's easy enough to put off dealing with Medicare choices forindividuals working past 65. Employers are required to offer all oftheir active employees group health plan coverage—which meanspost-65 active workers have the benefit of continuing theiremployer coverage. In addition, many employees choose to continuewith employer coverage because they need spouse and dependenthealth care coverage.

However, a portion of these individuals may be missing out onsignificant savings when delaying their transition to Medicare, andpushing the decision until after they leave their employer.

A brief comparison of prices tells the story. The average annualdeductible that a single employee on their employer's plan has tohit before coverage kicks in is $1,573, according to Kaiser FamilyFoundation's 2018 Employer Health Benefits Survey.Meanwhile, the average annual Medicare Part B deductible is just$185, and Medicare Part A is generally premium-free. (Note:When employees do leave their place of employment, they arerequired to enroll in Medicare Part B coverage within eight monthsto avoid penalties.)

Retirees using employer coverage

At the same time, employers also may provide retiree health carecoverage through their group health plan program. These individualscould be missing out on the same type of health care savingsbecause they continue with employer-provided coverage, rather thanenrolling in Medicare.

Employer-provided health care coverage for retirees is becomingless common among employers, with an estimated 18 percentof employers offering the coverage in 2018, down from25 percent in 2017. Even so, many individuals are choosingtheir employer-offered retiree health plans—not realizing thisbuying decision could be eating into their retirement future due tohigher, unnecessary health care costs.

The continuing rising cost of health care has more individualsand organizations scrutinizing their options, and Medicare, whichhas been widely overlooked or bypassed in the past is finallygarnering the attention it deserves.

Exploring alternatives with Medicare

An important sticking point for most people is that Medicarecarries complexities. It can seem safer to stay out of the Medicarearena, if that's an option, because someone is still working andhas access to employer health care. For instance, there are rulesregarding the timing of Medicare enrollment and penalties. Whereas,post-65 active workers who still receive employer health insurancedon't face these same requirements or penalties.

Understandably, employers are not in the habit of thinking aboutMedicare and how it may benefit their workers and organization.Historically, Medicare has been a post-work retirement topic—not atopic for the water cooler. But with workers ages 65-74 and olderexpected to see faster rates of labor force growth the next fiveyears, it makes sense for employers to start examining the value ofMedicare Plan Selection services as a part of their benefits andcompensation package.

Employers who appreciate the complexities involved with benefitscoordination issues around Medicare will enjoy loyalty from thoseolder, talented professionals who receive specialized guidancethrough this complicated time of transition in their health carechoices—and watch the value build as the U.S. workforce continuesto grow older.

Tricia Blazier is the director ofhealthcare insurance services at Allsup.

Read more: 

• Pre-retirees worry about health coverage beforeMedicare — and with it
• 2 approaches to incorporating health care inretirement planning
• Some older workers' jobs lack health coverage,jeopardizing retirement