Did you know that as an active employee, dropping your employer’s health plan and enrolling in Medicare could leave your spouse without coverage? With Medicare open enrollment in full swing, it’s a good idea to know that Medicare has several “gotchas” that require a skilled expert to navigate through.

For example: Let’s say you turn 65 in May of next year and your spouse will turn 65 in May of the following year. You plan on retiring in October and decide to just enroll in Medicare when you turn 65 and not wait until you retire. While the financials will generally not make this seem attractive, the plan design of Medicare (or procedures covered by Medicare) could entice you to make such a move. You assume that since you’re dropping coverage for Medicare enrollment, your spouse will be offered COBRA by your employer. NOT TRUE.

Since you’re voluntarily dropping coverage and not dropping because your employer plan is forcing you off the plan due to Medicare, your spouse is not entitled to an offer of COBRA coverage. This is different than if you’re no longer eligible for a retiree medical plan due to Medicare eligibility. In that case, your spouse would be entitled to an offer of COBRA.

With 10,000 baby boomers enrolling in Medicare every day, the Medicare “gotchas” become more and more frequent. Medicare can cause you to be ineligible to contribute to a health savings account (HSA), taking COBRA instead of Medicare could result in a 1 percent penalty for each month enrollment is delayed, and failure to enroll in a health plan with sufficient prescription coverage could result in a 1 percent penalty for each month not enrolled for the entire time you’re on Medicare.

Ask your employer, a health plan consultant, or a Medicare agent for guidance around the “gotchas.” We at Holmes Murphy can help, too. So, don’t be afraid to reach out!