Retiree Coverage & Medicare
If your former employer offers retiree health benefits, here's how they work with Medicare.
The Short Version
- You should usually enroll in Medicare when first eligible.
- Medicare becomes primary — your retiree plan becomes secondary.
- Don't drop your retiree coverage until you understand your options.
How Retiree Coverage Works with Medicare
Once you're eligible for Medicare:
- Medicare pays first for covered services
- Your retiree plan pays second for remaining costs
- Together, they may cover more than either would alone
Important: Enroll in Medicare on Time
Unlike employer coverage for active workers, retiree coverage usually does not let you delay Medicare without penalty.
- Sign up for Medicare Parts A and B during your Initial Enrollment Period
- If you delay, you may face permanent late enrollment penalties
- Your retiree coverage may require you to have Medicare
Check Your Retiree Plan Rules
Every retiree plan is different. Contact your former employer's benefits office to ask:
- Do I need to enroll in Medicare to keep my retiree benefits?
- How will my retiree coverage coordinate with Medicare?
- Will my benefits or costs change when I get Medicare?
- Is the drug coverage creditable for Part D purposes?
Watch Out For: Employer Retiree Drug Plans
Some employers offer a Retiree Drug Subsidy (RDS) plan instead of creditable Part D coverage:
- Ask if your drug coverage is "creditable"
- If not, you may want to enroll in Part D to avoid penalties
- Some employers help pay for Part D plans instead
Action Steps
- Contact your former employer's benefits office
- Find out how your retiree plan works with Medicare
- Enroll in Medicare during your Initial Enrollment Period (around age 65)
- Compare keeping retiree coverage vs. other Medicare options