Key Takeaways
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If you have a union retiree health plan and you’re eligible for Medicare, the two may not always coordinate smoothly, especially when it comes to who pays first and how benefits are structured.
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In 2025, failing to understand how your union plan overlaps with Medicare could lead to denied claims, higher out-of-pocket costs, or even a lapse in drug coverage.
Understanding the Relationship Between Union Plans and Medicare
Union-sponsored retiree health plans often offer generous coverage that includes medical, hospital, and sometimes even dental or vision benefits. These plans are a valuable part of your retirement, especially if you earned them through decades of service. But when you become eligible for Medicare—typically at age 65—the dynamics of your coverage can change dramatically.
Medicare Becomes Primary at Age 65
Unless you or your spouse are still actively working and covered by a current employer group plan, Medicare usually becomes your primary insurance at age 65. That means it pays first, and your union plan becomes secondary. This shift is crucial because if you don’t enroll in Medicare when you’re supposed to, your union plan may reduce its benefits or deny coverage altogether.
Coordination of Benefits (COB)
Coordination of Benefits determines which insurance pays first and how much the secondary plan will cover. In most union plans:
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Medicare pays first if you’re retired.
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Union plan pays second, covering what Medicare doesn’t, if the plan allows it.
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If you decline Medicare Part B, many union plans will refuse to pay for outpatient services, assuming Medicare should have been billed first.
Enrolling in Medicare: Timing Matters
The Initial Enrollment Period (IEP) for Medicare begins three months before your 65th birthday, includes your birth month, and ends three months after. If you miss this window and don’t qualify for a Special Enrollment Period (SEP), you may have to wait until the General Enrollment Period (January 1 to March 31) and pay late enrollment penalties.
Union plans rarely count as creditable coverage for delaying Medicare Part B. In 2025, the penalty for late enrollment remains 10% for every 12-month period you were eligible but didn’t enroll. That surcharge is added to your monthly premium permanently.
Prescription Drug Coverage May Not Be Creditable
Union retiree health plans often include prescription drug benefits. However, not all are considered “creditable coverage” under Medicare rules. If your union plan’s drug coverage is not creditable, and you fail to enroll in Medicare Part D when first eligible, you could face a lifelong penalty.
To protect yourself:
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Ask your union plan each year whether their drug coverage is creditable.
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Enroll in a Part D plan during your IEP or SEP if needed.
The Part D late enrollment penalty in 2025 remains 1% of the national base premium for each month you went without creditable coverage after becoming eligible.
Watch for Mandatory Enrollment Rules
Some union plans require you to enroll in both Medicare Parts A and B to keep your retiree benefits. If you don’t, the plan may cancel your coverage or significantly reduce your benefits. Always review your plan documents to confirm:
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Whether Medicare enrollment is required to keep coverage.
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If the plan reimburses you for Medicare premiums.
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How your secondary benefits are calculated once Medicare is active.
Medicare Advantage and Union Plans
In 2025, many union plans wrap their retiree health benefits into a Medicare Advantage plan, also known as a Part C plan. These are group-sponsored MA plans that coordinate tightly with your union benefits. However, not all plans follow this model.
If your union plan automatically enrolls you in a Medicare Advantage plan:
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You may be locked into that plan unless you opt out during Medicare’s Annual Enrollment Period (October 15 to December 7).
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You may lose your union health benefits if you switch to a different Medicare Advantage plan or return to Original Medicare without union authorization.
Out-of-Pocket Costs Can Shift
Once Medicare becomes primary, your cost-sharing responsibilities can change. Common changes include:
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Union plans might no longer cover 100% of services once Medicare pays first.
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You may need to satisfy both a Medicare deductible and your union plan’s deductible.
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Some union plans shift to a Medicare-wrap model, meaning they only cover what Medicare doesn’t after Medicare approves the claim.
Keep in mind:
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Part A (hospital insurance) is premium-free if you worked at least 10 years (40 quarters).
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Part B (outpatient services) requires a standard monthly premium—$185 in 2025—with higher amounts for those subject to Income-Related Monthly Adjustment Amounts (IRMAA).
What If You’re Still Working?
If you’re still actively working and covered under a union health plan through your employer (not a retiree plan), Medicare may be secondary. In that case:
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You can delay Medicare Part B without penalty if your union coverage qualifies as creditable.
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Once you retire, the countdown begins. You’ll have 8 months to enroll in Part B without penalty under a Special Enrollment Period.
Always confirm whether your current union plan is active employee coverage or a retiree plan. This classification affects whether Medicare is primary or secondary.
Common Pitfalls to Avoid
Some of the most frequent and costly mistakes include:
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Assuming union coverage means you don’t need Medicare.
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Missing the Medicare enrollment window because your union plan is still active.
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Failing to verify creditable drug coverage and accruing penalties.
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Not realizing your union plan may cancel or reduce coverage if you skip Medicare Part B.
What to Do Each Year
Even if you’ve coordinated your union and Medicare coverage well, things can change. Review these items annually:
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Whether your union plan is changing its Medicare coordination rules.
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If any changes affect your drug coverage status.
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The Annual Notice of Change from your union-sponsored Medicare Advantage plan, if applicable.
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Your Medicare Summary Notice and union plan Explanation of Benefits (EOB) to make sure both insurers are processing claims properly.
When in Doubt, Ask in Writing
Union benefits can be complex. If you’re unclear about how your union plan interacts with Medicare, always get confirmation in writing. Contact your union’s benefits office and ask questions such as:
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Do I need to enroll in Medicare Part A and B to keep my union coverage?
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Is my prescription coverage creditable?
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Will my union plan pay as secondary to Medicare?
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Is my plan moving to a Medicare Advantage structure?
Review and Stay Protected
When Medicare and union retiree health plans overlap, gaps can form—and those gaps can be expensive. Understanding how the two coordinate in 2025 is essential to protecting your health and finances.
Don’t Let Your Coverage Slip Through the Cracks
Union retiree plans offer valuable benefits, but they aren’t immune from coordination problems when you reach Medicare age. Be proactive—check the rules, enroll on time, and confirm drug coverage status each year. For personalized advice and to avoid costly mistakes, speak with a licensed agent listed on this website.
