According to the United States Department of Labor, Bureau of Labor Statistics, more than 23% of Americans aged 65 or older are working either part-time or full-time. By 2024, It is projected that 13 million people aged 65 and older will be working. Although they make up a small percentage of the overall work force, the age groups 65 to 74 and 75-and-older are projected to have faster rates of labor force growth annually than any other age groups.
The Reason People Aged 65 and Older Are Working
A combination of reasons are precipitating the change:
There are more people age 65 or older - baby boomers are a large group of Americans born between the years 1946 and 1964. By the year 2024 they will have all reached ages 60 to 78. More older people leads to more older people in the work force.
People over age 65 are healthier and have a longer life expectancy than previous generations. A longer life expectancy means people need more money for retirement.
People over age 65 are better educated, which increases their likelihood of staying in the labor force.
Changes to Social Security benefits and employee retirement plans are creating incentives for Americans to work longer.
Insurance Options for Workers 65 and Older
If you enrolled in Social Security before your 65th birthday, you will automatically be enrolled in Medicare Parts A and B. That’s usually a good thing, but if you're still working at age 65, you should know that you may or may not want to enroll in Part B right away. While Medicare Part A is free for most people, Part B requires a premium, so it’s important to consider your options. For example, you may have good health insurance through your employer and want to keep it, or your spouse may be on your employer plan, which may require you to keep it.
One thing you don’t want to do is pay for two plans. If you do enroll in both employer coverage and Medicare Part B, the employer plan becomes the primary payer in cases where there are more than 20 employees. In this situation Medicare only pays for covered services that the employer plan doesn’t… which means that you’re paying two premiums but getting little in return for your money.
Size of Company Matters
If your employer has 20 or more employees and you are 65 or older, you have the right to delay enrolling in Medicare until you stop working or the coverage terminates, whichever happens first. When you do stop working or coverage ends, you have a special enrollment period of up to eight months to sign up for Medicare without incurring any late penalties.
If your employer has 20 or fewer employees, your employer is allowed to decide when Medicare-eligible employees must drop the employer plan and sign up for Medicare. If the employer requires you to enroll in Medicare, then Medicare becomes primary and the employer plan provides secondary coverage. If you fail to sign up for Medicare when required, you will essentially be left with no coverage.
When It’s Time to Enroll
When you turn 65, you may want to enroll in Medicare Part A during your Initial Enrollment Period (IEP). this time. There is no premium for Part A as long as you or your spouse worked and paid Medicare taxes for at least 10 years.
When you decide to stop working, you can enroll in Medicare Parts B and Part D during your Special Enrollment Period (SEP) and avoid any late enrollment penalties. In order to avoid a gap in coverage, plan to enroll in Part B about 2 months before you plan on retiring, because processing can take up to 6 weeks.
Medicare is definitely confusing because there’s so much to know. If you have any questions, please feel free to contact me. I am licensed for all of Tennessee and am a broker appointed with Aetna, Blue Cross, Cigna, Humana, and United Health Care, to name a few.