Medicare Employer Coverage

Your Best Bet to Learn about Employer Coverage under Medicare

If you are already employed with a company offering group coverage and are 65, or getting there soon, both your Medicare and Employer Coverage are available to you. In such a case, it is best to compare the cost of:

• Medicare coordinating with Employer coverage
• Using Medicare as your primary insurance

Which decision is the best for you will depend on your situation. Either way, a decision made on time can save you from paying Medicare late enrollment penalties.

The rules differ based upon the size of the company you work for. For those working in companies under 20 employees, Medicare is the primary payer and as such you must have Medicare Part A and Medicare Part B to really be covered by your employer’s plan. If you don’t you may find yourself exposed and in essence be uninsured, or at least partially uninsured should you need any medical attention.

Here is what you need to know about Medicare & Employer Coverage:

Primary Coverage

Medicare is a primary payer, in case you work for a company with less than 20 employees. Therefore, you will need to be enrolled in both Parts A & B. Never take a chance on Medicare Part B even if your insurance carrier claims they will cover it.

Keep the following in mind:

• Enroll in Medicare 3 months before turn 65 to start receiving benefits when you do turn 65.
• Medicare coverage is not connected to your employer coverage. So don’t leave it in the middle of your IEP, thinking your Medicare coverage will start immediately.
• The penalty for failing to enroll during the 7-month-long IEP is 10% per month for the time when you were not enrolled.

Look for RX benefits among your group plan. If you have them, consider delaying enrolling in Medicare Part D. Or, it could be cheaper to go with just part D – compare costs in either case!

Secondary Coverage

You would have Medicare as a Secondary Payer if you work for a company with more than 20 employees. That’s because your employer insurance will be the primary payer. Since Medicare Part A usually costs nothing, it makes sense to have this extra protection as it may limit your exposure on a hospital stay to an amount less than your deductible.

Choosing to use Medicare Part B comes with a premium that you will be paying monthly, depending on your income. Here are some reasons why you might consider enrolling in Part B and Medicare Part D:

• You are eligible for employer group health coverage, which includes outpatient benefits. Don’t pay the premiums for Part B and D while you are still eligible.
• A low employer plan deductible means you can risk paying out of pocket and delay enrolling in Part B.
• Due to creditable coverage, you won’t have to pay a penalty when you enroll in Part B after retirement. Keep the creditable coverage letter that your insurance company sends you when you leave the group plan. Take advantage as an active employee by simply enrolling in Medicare Part A – because it is premium-free! For a $3,000 deductible available to you through your employer’s insurance, you will pay only $1,484 for a hospital stay!