Employee Turning 65: Medicare Checklist for Texas Employers

For an employee turning 65, Texas employers should confirm payer order, employment and coverage dates, creditable drug coverage, HSA deposits and effects on covered family members before processing a plan change. HR supplies plan facts and neutral assistance; the employee confirms personal Medicare enrollment requirements with Medicare or Social Security rather than relying on a birthday alone.

Who pays first: the group plan or Medicare?

For age-65-or-older Medicare beneficiaries with coverage through their own or a spouse’s current employment, CMS Medicare Secondary Payer guidance generally puts the group plan first with 20 or more employees, including exactly 20. Medicare generally pays first in a single-employer plan with fewer than 20. Do not substitute the number enrolled for the required employer count.

Multiple- or multi-employer arrangements require separate review: another participating employer with at least 20 employees may affect payer order. A small-employer exception requires approval. Get written confirmation from the plan team, including the count, arrangement and any approved exception. Where Medicare is secondary, follow CMS nondiscrimination requirements and do not steer eligible older workers off the group plan.

What dates should HR confirm?

Medicare explains enrollment dates: the initial enrollment period generally lasts seven months around age 65. In eligible current-job coverage cases, the Part B special enrollment period ends eight months after employment or group coverage ends, whichever happens first. COBRA does not extend that window. Have the employee confirm eligibility and effective dates before a termination or retirement change.

What drug notice belongs in the file?

CMS creditable-coverage guidance explains that creditable prescription coverage is expected to pay, on average, as much as standard Medicare drug coverage. Required notices to Medicare-eligible covered people include the annual notice before October 15 and other specified times. Obtain the current determination, identify who sends notices and retain delivery evidence.

Part D has separate timing: Medicare describes potential late-enrollment penalties after 63 days or more without creditable drug coverage under the applicable conditions. Do not use Part B’s eight-month window as a drug-coverage deadline.

How should payroll handle HSA deposits?

Under IRS Publication 969, the HSA contribution limit is zero beginning with the first Medicare-enrolled month, including retroactive months. Premium-free Part A can start six months before late enrollment, but not before the month of turning 65 under the stated rule. Confirm actual effective dates and obtain tax-advisor instructions for both employee and employer deposits; do not apply an automatic birthday cutoff.

What should the final checklist include?

Assign an owner and follow-up date for payer order, employment and coverage end dates, drug notices, HSA review and each covered family member. Medicare recommends speaking with the benefits administrator before changing employer coverage. Save the plan’s answer for the employee and each dependent before acting.

A neutral HR message can invite the employee to review current plan documents with the benefits contact, confirm Medicare dates with Medicare or Social Security, and review HSA timing with a tax advisor. Keep the coverage decision with the employee; seek benefits counsel before proposing any payment or waiver tied to leaving the group plan.

See also COBRA and employer enrollment planning and our employer compliance support.

General information for employers, not legal, tax, or medical advice; plan documents and current rules control.

To review your employer-plan questions, contact PCI Solutions.