Life Events - Retiring from the University of Michigan:
your health plan coverage and medicare
What is Medicare?
Medicare is a federal health care plan available to persons at age 65 or older. It is also available for people who have been entitled to Social Security disability benefits for 24 months, or have end-stage renal disease (permanent kidney failure). Medicare is directed by the federal Centers for Medicare & Medicaid Services (formerly Health Care Financing Administration). Medicare comes in three parts:
- Part A covers inpatient hospital services and has no monthly premium;
- Part B covers outpatient medical services and has a monthly premium;
- Part D covers outpatient prescription drugs and has a monthly premium for most people (certain individuals may qualify for zero or reduced monthly premium under the Medicare low-income prescription drug assistance program).
Local Social Security Administration offices take applications for Medicare Parts A and B. They also provide information and applications for Medicare low-income prescription drug assistance. People wishing to enroll in Medicare Part D must do so through a Medicare approved vendor.
How Medicare Parts A and B Affects Your Coverage
- Medicare becomes the primary coverage for you and any covered dependents age 65 years of age or older, or disabled once you have retired.
- Your U-M coverage becomes secondary or supplementary to Medicare.
- All services must be submitted to Medicare first for payment.
- Retirees and their dependents must enroll in Medicare benefits when first eligible. If you or a dependent that is eligible for Medicare fail to enroll when first eligible, your benefits will be drastically reduced until you are enrolled. U-M health plan coverage will not pay for services that would have been paid primary by Medicare if Medicare enrollment had occurred. There may be a penalty for late Medicare enrollment of 10% a year for each year you could have been enrolled.
Medicare Parts A and B Deadlines:
- If you and your spouse or OQA (Other Qualified Adult) are age 65 or older at the time of retirement, you must apply for Medicare before the end of the month in which you retire or your enrollment will be delayed causing claim problems until you are enrolled. The HR/Payroll Service Center will give you a confirmation notice of your retirement date to take to your local Social Security Office to verify your eligibility to enroll under the Medicare Special Enrollment Period.
- If you are retiring within 4 months of turning age 65, you must apply 3 months before your 65th birthday. Coverage will begin the first day of the month in which your 65th birthday occurs.
- If you and/or your covered dependents are receiving Social Security income benefits by age 65, you will automatically be notified and enrolled in Medicare Parts A and B by Social Security. Coverage will begin the first day of the month in which the 65th birthday occurs.
- If you are already retired, and are not receiving Social Security benefits, you must complete an application to enroll in Medicare. You should plan on completing an enrollment form approximately ninety days before you attain the age of 65. On the first day of the month that you turn age 65, your coverage with the university will be changed so that the university’s coverage will not pay for anything that Medicare Parts A and B would have paid for. You can phone 800-772-1213 (TTY 1-800-325-0778) to schedule an appointment with a Social Security counselor at an office near you or to request the enrollment forms by mail.
Medicare Part D (Prescription Drug Plan):
- The university advises that Medicare-eligible retirees and their Medicare-eligible dependents enrolled in the U-M health/prescription drug plan should not enroll in a Medicare Part D plan, unless they are first approved by the Social Security Administration to receive Medicare low-income prescription drug assistance. For information and applications for Medicare low-income prescription drug assistance, visit a local Social Security office, or contact the Social Security Office at 1-800-772-1213 (TTY 1-800-325-0778) or online at www.socialsecurity.gov.
- In the event you are approved for Medicare Part D prescription drug low-income assistance, you should enroll in a standard Part D plan and continue your U-M enrollment in a health plan and prescription drug plan.
- Individuals that enroll in a standard Part D program should show both their Part D Prescription Drug Card and their U-M Prescription Drug Card when they fill a prescription at a pharmacy.
- Individuals who do not qualify for low-income assistance and sign up in a standard Part D plan and continue their enrollment in a U-M health plan will end up paying an additional monthly premium for Part D with no additional benefits.
Retirees should look for on the Benefits Office website at benefits.umich.edu or call the university HR/Payroll Service Center at 734-615-2000 locally or 866-647-7657 (toll free within the U.S.). TTY/TDD phone service is available through the Michigan Relay Center; Call 1-800-649-3777 and ask the operator to connect you to the HR/Payroll Service Center.
If You Live Outside of the United States
If you plan to live outside the United States after you retire, you should know the following:
- Medicare does not cover services received in foreign countries.
- If you decline Medicare Part B because you’re moving out of the United States and decide to return to the United States, there may be a penalty for late Medicare enrollment of 10% a year for each year you could have been enrolled. If you are not enrolled in Part B, your health plan may reject charges for services received in the United States.
- Contact the HR/Payroll Service Center to speak with a counselor to determine your health plan options.
Can You Still Enroll in Medicare While You Are Working?
Yes. However, since your U-M coverage is the primary policy while you are an active member of the faculty or staff (including while you are on phased retirement or a furlough) you may not be able to use Medicare. Some people will enroll in Part A of Medicare if they are still working at age 65 because it is free and wait until retirement to enroll in Part B (and Part D only if applicable as described above) through the Special Enrollment Period.
HR/Payroll Service Center
Social Security Administration