May 22nd, 2018
When business owners first become eligible for Medicare, at age 65, they have several different options. However, each strategy will depend on how your business ownership is structured.
Owners or employees of small businesses that employ fewer than 20 workers must enroll in Medicare to avoid penalties down the road. In this case, Medicare becomes the primary payer.
A business owner and spouse with 20 or more employees can remain on the group health plan and wait to join Medicare until he or she quits working or retires. In this case, the group health plan is the primary payer.
Whichever situation applies to you, knowing all costs and any eligible premium deductions will help make your decision much easier.
Depending on the legal set up your company, you may be better off staying on the employer plan so certain health care expenses can be deducted.
However, dropping off the group plan at age 65 can also lower premiums for the entire policy. This will save the business and every employee money each month since age does impact premium ratings.
Our Medicare Coach team has helped business owners create a strategy for themselves and their business when it came time for them to make the complicated decision to join or not to join Medicare.
As you will see below, your Medicare decision is not black and white and depends on varying factors.
A self-employed veterinarian client and his spouse recently saved more than $7,472 in annual premiums by joining Medicare at age 65 and they also improved their coverage. They no longer had a network to worry about, no more $3,000 deductible to meet and they could select their own doctor and any specialists without insurance company approval.
Another great example is from a few months ago when three engineer business owners, all from the same firm, saved more than $40,000 in annual health insurance premiums.
The real slam dunk came about for a 87-year-old business owner/employee client and his spouse, whose best decision was to NOT join Medicare. This led to huge savings through premium deductions and taxes.
They made their company group medical insurance fringe benefits available equally to all employees and fully deducted all premiums, including their own.
Every situation is different, but many times the high net worth owner/employee and spouse can benefit the most by not joining Medicare when eligible if at least one of the owner/employee couple continues to work within their company.
If you are a business owner, please make sure you are taking into consideration all the rules of Medicare to ensure you are making the best decision for your unique situation. You do have more options that most people, which is a great thing if know how to get the most from them.
Larry Weigel
The Medicare Coach
