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Client Alert: Guidance on Educating Employees Turning 65 About Health Coverage Options

As employees approach age 65, it is important to provide them with clear, neutral information about their health coverage options—specifically, the choice between remaining on a company’s group health plan or enrolling in Medicare. The last quarter aligns with Medicare’s Annual Enrollment Period (October 15–December 7) and employer open enrollment. This is the right time to provide compliant, neutral materials and host educational sessions. Position the communications as balanced guidance, not a cost-savings initiative tied to older employees’ coverage decisions. Below is a summary of compliance requirements and best practices to help companies navigate this process while avoiding legal pitfalls.

Key Compliance Considerations

Medicare Secondary Payer (MSP) Rules: According to Social Security Act §1862(b), group health plans of employers with twenty or more employees must be the primary payer, with Medicare secondary, for active employees age 65 or older and their spouses. A company cannot offer incentives or otherwise encourage employees to drop group health plan coverage in favor of Medicare, nor can it discriminate in benefits, premiums, or contributions based on Medicare eligibility or age. “Incentives” include cash payments, premium reimbursements, or other benefits designed to push an older worker toward Medicare instead of your plan. Violations can trigger civil monetary penalties and government enforcement. For a company with fewer than twenty employees, Medicare is the primary payer, and the group health plan is secondary. In this case, if the employee does not enroll in Medicare, the group health plan may pay as if Medicare were primary, potentially leaving the employee with significant out-of-pocket costs.

Age Discrimination in Employment Act (ADEA): Separate from MSP, and according to 29 U.S.C §621, attempts to steer older employees away from the company’s group health plan can raise concerns. The company must offer the same health benefits to employees aged 65 and older as it does to younger employees. Any communication or policy that could be seen as encouraging older employees to leave the group health plan (by retiring, reducing hours or waiving coverage) could be viewed as age discrimination. Improper plan design or communications can also create ERISA fiduciary and disclosure risks.
 
Best Practices for Educating Employees

Provide Neutral, Factual Information: Use standardized, written materials such as the official “Medicare & You” handbook or resources from Medicare.gov. Explain the basics of Medicare, how it coordinates with group health plans, the potential consequences of delaying Medicare enrollment (such as late enrollment penalties or coverage gaps), and the right to remain on the group health plan while actively employed. Distributing required and standard notices, such as the annual Part D creditable coverage disclosure (due before October 15), Summary of Benefits and Coverage (SBC), and plan summaries. Describing HSA implications factually: employees enrolled in any part of Medicare cannot contribute to an HSA, and Medicare Part A enrollment is retroactive up to six months (but not before entitlement), which may require stopping HSA contributions in advance.

Avoid Prohibited Conduct: Do not suggest, imply, or state that employees should drop the group health plan in favor of Medicare. Do not offer cash or other incentives to waive coverage under the group health plan, and do not provide different information or options based on age or Medicare status.

Respond to Employee Questions: If employees ask about the pros and cons, provide a side-by-side comparison of coverage features, costs, and coordination rules, but do not recommend one option over the other. Refer employees to official resources (Medicare.gov, State Health Insurance Assistance Programs, or the Social Security Administration) for personalized advice. Using group settings or broadly distributed materials rather than one-to-one steering; if one-to-one counseling occurs, keep it factual, document neutrality, and do not recommend Medicare over your plan.

Document Communications: Keep records of the information provided to ensure consistency and demonstrate compliance if questioned.

Train HR and Benefits Staff: Ensure all staff who interact with employees on these issues are trained on MSP, ADEA, and anti-discrimination requirements. Use scripts or checklists to ensure communication remains neutral and factual.

Sample Language for Employee Communications

“As you approach age 65, you may be eligible for Medicare. You are not required to enroll in Medicare while you are actively employed and covered by our group health plan. Our plan will continue to provide you with the same coverage as other employees, regardless of your age or Medicare eligibility. If you have questions about how Medicare works with your current coverage, you may wish to review the official Medicare & You handbook or contact Medicare directly at 1-800-MEDICARE. We are happy to provide you with factual information about your options, but we cannot advise you to enroll in or decline Medicare. If you enroll in Medicare, HSA contribution rules may change. Please review IRS guidance or consult your tax advisor. Please let us know if you have any questions.”

If you have questions about employee benefits, retirement plans, health care options or any related issues, please contact Jay Keeton at jkeeton@whitefordlaw.com.

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The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.