Why Medicare May Be a Better Choice For Your Older Workers

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Oct 17, 2019

Older workers who continue to work past retirement age is a trend that impacts every part of the organization, from the C-suite all the way to new hires.

As such, emotions are mixed: Executives are happy to retain this loyal talent pool, with their years of expertise and large professional networks, but concerned about possible costs. For instance, those over 65 account for 36% of all spending on health care though they are only 16% of the US population. Older individuals tend to need more health services and have higher rates of chronic illness and disease.

Younger employees are similarly concerned about the associated dollar signs, with a survey from Willis Towers Watson finding that 37% of workers are worried that a greater number of older employees will prevent them from receiving promotions.

Considering one-quarter of the U.S. workforce in 2024 is expected to consist of individuals over 55, HR professionals have the task of helping to alleviate these concerns and create a workplace in which all employees can feel fulfilled. This will involve finding ways to save money by revisiting benefits offerings – especially those related to healthcare – and helping older workers transition to Medicare when appropriate.

Almost half of all Americans receive health insurance through employer-sponsored plans. One thing most employers fail to consider in offering those plans is that as employees age, their needs and priorities change. Employers’ benefits plans, especially their health plans, need to change along with them.

Technology provides tools for shifting cost options for employers and their workers. One option, also covered under Medicare, is telehealth, which more than half of Americans over the age of 65 are willing to use (according to a 2019 survey). Per the NHP Foundation, 50% of Americans over age 55 with annual incomes under $60,000 feel they have to choose between affording housing or healthcare, so seniors are eager to use telehealth as a cost-savings method to access better healthcare professionals, and also as a way to get quick prescription refills and faster appointments.

For older workers specifically, HR teams can help them choose the health benefits that best fit their lives by connecting them with a Medicare expert. Such experts assist in evaluating their employer-provided plan in comparison to Medicare, and then choosing what seems to be the better match for their needs. (Note: Employers are not allowed to transition Medicare-eligible workers to Medicare; it is a voluntary choice for individuals who continue working at employers with 20 or more employees.)

Employers who provide this kind of education can see advantages. In the long run, they are helping employees to better understand their benefits plans and finances, and demonstrate a concern for their well-being. In fact, a 2019 Financial Finesse report found that providing employees with financial counseling resources produces higher employee financial wellness scores over a five-year period.

HR teams can make a difference, especially in providing education that reduces misconceptions about employer and federal benefits programs, such as those managed by Social Security. For example, 41% of people over the age of 54 falsely believe they will be automatically enrolled in Medicare once they reach retirement age.

Involving a Medicare expert can also clear up the myth that Medicare is a lesser form of health insurance. Medicare has multiple plan options – while 80% of all employers have only one (larger firms, however, offer two or more) – that allow for customization. In some cases, Medicare may provide better coverage at a lower cost than their employer’s plan:

  • Medicare premiums start at $135.50.
  • Most Medicare deductibles are under $200 or nonexistent.
  • Medicare out-of-pocket costs are heavily reduced or cost nothing at all, while 66% of workers under employer plans are charged a copay for visits to primary care centers.
  • Medicare covers 93% of primary care doctors.

Employers and younger workers also can benefit from older workers transitioning to Medicare. With fewer people on the employer health plan, employers may discover key savings or apply funds to boosting workers’ opportunity for growth within the company.

HR professionals can help to eliminate the potential negatives that result as older workers stay on staff after their 65th birthday. All it takes is a few adjustments to the company’s benefits services and offerings. By connecting older workers to a Medicare expert and supporting them in that transition, in allowing for more flexibility, and in providing better retirement tools and education, HR can create the “workplace of tomorrow” that prospers all involved.