One in 10 Americans over the age of 65 is still working. For most, their employer-sponsored healthcare plans will continue to pay their health insurance premiums.
However, since different health insurance rules apply past the age of 65, seniors who continue to work should consider their options carefully before simply accepting group coverage.
What jobs are most common for workers over the age of 65?
When it comes to health insurance, employees must work an average of 35 hours per week in order to qualify for group coverage. Curiously, the majority of these jobs, statistically, do not appear to be traditionally full-time and/or professional positions.
What jobs do seniors hold the most? Retail sales person was the most common job title of those 65 and older. The second most common job for seniors was listed as farmers or ranchers.
Following closely behind was the first-level management of these sales positions. According to U.S. News, other roles like janitors, truck drivers, secretaries, bookkeepers cashiers and real estate agents also made the cut.
This would indicate that by 65 years of age, most seniors do not work in order to gain access to health benefits, but rather to bring in some additional income and/or for other personal reasons. (i.e. they are not financially prepared for retirement and/or choose to take advantage of delayed SSI benefits.)
The majority of healthcare is used by those 55 years and older.
It should be noted that those 55 years of age and older are the major consumers of healthcare in the U.S. This means that after the age of 55, people are more likely to begin experience health issues for which they’ll regularly see a physician.
This being the case, it’s clear that health insurance becomes more of a necessity for older Americans. As we learned in a recent article on low-income adults and coverage gaps, this is not the time in life to be without health insurance.
HSA rules change over the age of 65.
Considering the above statistic, it’s important to note how HSAs rules alter at 65 as well. Health Savings Accounts (HSAs) are paired with High Deductible Health Plans. It is estimated that 44% of employers offer HDHPs, so some workers over the age of 65 will be impacted.
Medicare will also automatically enroll those over the age of 65, causing them to lose their HDHP, and, therefore, their HSA contribution privileges.
If a worker over 65 wishes to continue contributing to an HSA, they’ll need to opt-out of Medicare in lieu of an employer offered HDHP. The key is to review this option with your health benefits administrator since HDHPs require that an annual deductible is met before health insurance kicks in. Monthly premiums may be lower, but, notably, out of pocket costs with an HDHP will be higher.
Medicare benefits begin at age 65, even if someone is still working.
Medicare is often associated with retired persons. You must be at least 65 years of age to enroll. There are several parts to the Medicare program. Seniors choose which parts to enroll in based on the level of coverage they need.
For those over the age of 65 who are still working, they may choose to enroll in Medicare Part B, which covers doctors’ visits, home healthcare, hospital procedures, etc.
If the coverage offered by an employer is more beneficial (i.e. lower premiums, a broader care network, no deductibles, etc.), older workers may choose to opt-out of Medicare coverage.
Once they do retire, enrollees have eight months to opt into Medicare. It should also be noted (and is worth inquiring with your Medicare benefits administrator) that those who delay enrollment, even if they are still working, could pay a higher premiums at a later date.
Those earning over $170,000 pay a premium for Medicare.
A second motivating factor for those over 65 who continue to work may be their overall household income. For those earning over $170,000 as a household (or $75,000 as an individual), Medicare premiums will be higher per month, making an employer-sponsored healthcare deductible (which is not income based) more beneficial.
How does Obamacare help those over 65?
If a person over 65 years of age is not eligible for Medicare, they may apply for Obamacare. This might apply to you if you did not pay into social security for at least 10 years and/or did not have a spouse that did.
All of the standard Obamacare rules and regulations will apply, including if you qualify for subsidies based on your income. For a few select others who may have chosen to dissolve funds (such as PERA) meant to cover the cost of their Medicare benefits, they are also eligible for Obamacare, regardless of circumstances.
