Medicare And Small Group Insurance: Who Pays First
If your employer has fewer than 20 employees, then Medicare becomes primary. This means Medicare is billed first, and your employer plan will be billed second.
If you have small group insurance, its HIGHLY recommended that you enroll in both Parts A and B as soon as youre eligible. If you dont, your employers group plan can refuse to pay your claims.
Your insurance might cover claims even if you dont have Part B, but we always recommend enrolling in Part B. Your carrier can change that at any time, with no warning, leaving you responsible for outpatient costs. Youll also have to pay the late penalty because your group insurance wont be considered .
The Lowdown On The Best And Most Cost
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Planning for retirement includes obtaining appropriate and affordable healthcare coverage. In that respect, for Americans 65 and older, any conversation about healthcare must include Medicare. Eligibility at age 65 means that health insurance becomes more affordable.
When you retire, its important to understand how Medicare works and how you can get the best and most cost-effective coverage. Many retirees wonder how to determine whether they need all four parts of Medicare. Questions about Medicare costs, supplemental insurances, and enrollment periods often arise as well.
Do I Need To Sign Up For Medicare Part D If Im Still Working
Also, if you are already covered by your companys medical plan that includes medication coverage, a Medicare plan may not be right for you.
Individual and Employer plans dont have the Medicare Donut Hole, so if you are on expensive drugs you might not want to sign up for Medicare.
The drug coverage is the #1 reason why I might tell someone that they should stay on their current plan after I analyzed their benefits.
Youll definitely want to do a cost-benefit analysis here. Just the other day after doing a drug plan comparison on the Medicare.gov website. It looked like the client was going to have to spend about $6500 per year if he went off his company plan and onto Medicare. I thought that he might be better off on his company plan. But after we included premiums, co-pays and deductibles he paid the previous year, the result actually came out in favor of dropping the employer plan and going onto original Medicare.
So the moral of the story is that you need to compare costs when making this decision.
Do I need to sign up for Medicare if I work for a small company?
If your employer has fewer than 20 employees, you should enroll in Medicare Part B when you are first eligible. Medicare is considered primary, which means it pays before your employers insurance pays.
That means that you dont have insurance
Do I need to sign up for Medicare if I work for a large company?
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Should I Get Medicare If I Keep Working
While everyones retirement journey is different, we find that most people retire at age 65 when they begin collecting Social Security. However, many others will continue working well after the 65th birthday milestone. Regardless of if you continue working or not, as soon as you become eligible for Medicare Part A , you should enroll right away. This is especially important if you are eligible for the premium-free Medicare Part A. Since you wont pay anything for your Part A coverage, you simply gain more protection at no cost.
At some point, youll likely want to enroll in Medicare Part B, too. However, the timing of your Part B enrollment will depend heavily on whether you continue working past age 65 or not. You may prefer to keep your existing coverage if you decide to continue working past 65.
Choosing to enroll in Medicare while working will also depend on the size of your company. Lets give an example to illustrate why thats important. If you work for a company with fewer than 20 employees, Medicare becomes the primary payer for your coverage. The employer-sponsored coverage pays secondary in this case. For scenarios like this, youll need to evaluate your employer secondary coverage and compare it to Medicare Part B. Then, choose which plan offers more comprehensive coverage and move forward accordingly.
Working At Age 65 And Medicare
A person is generally eligible for Medicare at age 65, and has an enrollment window leading up to his or her 65th birthday. This enrollment opportunity begins three months prior to his or her birthday and ends three months afterwards, so signing up for Medicare on time can help a person avoid penalties.
A person that is still working at age 65 has a little bit of wiggle room when it comes to signing up for Medicare. A 65 year old person that has group coverage through an employer may can wait about signing up. As long as the employer has twenty or more employees, a person can delay signing up for Medicare.
There are two parts to Medicare, Part A and Part B. Medicare Part A is free. Since it is free, it would be wise to sign up on time for Part A. It doesnt cost a person anything and can serve as your secondary insurance. Medicare Part B is not free. A person can avoid the Part B premiums while he or she is covered under his or her employers group plan. Once a person retires or looses group coverage, he or she has an eight month period of time to sign up.
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Do I Have To Sign Up For Medicare If I’m 65 Or Older And Still Working
If you’re age 65 or older, eligible for Medicare, and have insurance through your current job or your spouses current job, you need to make some important Medicare enrollment decisions.
If you don’t enroll on time, you may have to pay a penalty. Before you make any changes, it’s good to understand how your current coverage works with Medicare about four to five months before you become eligible for Medicare.
Ask your benefits manager or human resource department how your employer health insurance works with Medicare, and confirm this information with the Social Security Administration and Medicare .
When you retire or if you lose your employer coverage, you will get a Special Enrollment Period to sign up for Medicare. Be sure to review the rules carefully, so you don’t miss deadlines.
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Do I Need To Sign Up For Medicare If Im Still Working
I often get this question: Do I need to sign up for Medicare if Im still working? Lets look at several situations to see if you need to sign up for Medicare.
Generally, if you are receiving either Social Security retirement or disability benefits, you cant opt-out of Part A.
In this circumstance, the only way to opt-out would be to withdraw your application for retirement or disability benefits from Social Security.
But as long as youre still working and have creditable coverage at work, you wont have to enroll in Medicare. And neither will your spouse if your spouse is also covered.
If you have the option, youll want to check the drug plan coverage. Many times youll save money by enrolling in Medicare when you are eligible unless you are prescribed very expensive drugs. I recommend doing a cost/benefit analysis when comparing your employee plan to Medicare.
When You Should Consider Enrolling In Medicare Part B
If you qualify to delay enrolling in Medicare, deciding to do so is a personal choice.
Some may choose to delay, and for others, it may still be a good fit for your health and lifestyle to enroll in Part B. Consider the following when trying to decide whether to enroll in Part B or delay while still working:
- Is Medicare less expensive than your current health insurance?
- Does Medicare offer better coverage than your current health insurance?
- Do you want to keep your current insurance but also take advantage of Medicare benefits
- Do you want to enroll in either a Medigap or Medicare Advantage plan?
- Is your prescription drug coverage considered creditable by Medicare?
Answering the above questions can help you decide whether or not to delay enrollment. Its important to carefully consider the last item regarding prescription drug coverage. While most employer coverage is considered creditable, you should still verify if it is or could end up facing a late enrollment penalty for Medicare Part D.
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Special Situations: Previous Employers Military Vets
You must enroll in Medicare Parts A & B if you have any health insurance, including COBRA coverage from your spouse or retired health coverage.
You should speak with your military or veteran health benefits to learn when you can enroll in Medicare.
It is complicated. Get all the help you need.
Medicare rules and processes are complicated and full of exceptions. If you miss something in the enrollment rules you could be subject to penalties or gaps in coverage. Before you enroll in Medicare or delay enrollment, you should speak with your benefits administrator and Medicare.
Do I Need To Sign Up For Medicare If Im Receiving Social Security Benefits
If you are already receiving Social Security benefits, you are normally automatically enrolled in Medicare. However, Ive had instances where my clients were not automatically enrolled. Its always best to contact your local Social Security office to see if you need to enroll. Or you can just use the online application at socialsecurity.gov/medicareonly. If you dont like online enrollment, you can also call the Social Security Administration at 800-772-1213.
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When Am I Eligible For Medicare
In general, most people become eligible for Medicare when they turn 65. However, people younger than 65 with End-Stage Renal Disease or Lou Gehrigs Disease are also eligible for Medicare. These, of course, are special scenarios.
For most people, Medicare Part A will be free in retirement. Wondering if youre included in this group? If you worked at least 40 quarters in the United States, and paid Medicare taxes while employed, you should receive Part A at no monthly cost.
If you didnt work or pay Medicare taxes, you may still be eligible for coverage if your spouse did. You and your family worked many years to ensure that your health is covered in retirement, so see this as an added benefit.
While Part A is part of Medicare, it doesnt ensure complete coverage. If youre also wanting outpatient coverage, youll need Medicare Part B as well. If you want Part B, youll have to pay a monthly premium which will depend on the official start date of your Part B, and your income level.
Finally, if youre wanting Part D and a Medicare Supplement policy , you will also pay a monthly premium for this added coverage.
Do You Qualify For Premium
Most people dont have to pay a premium for Original Medicare Part A, which covers inpatient hospital visits. If you qualify for premium-free Part A, you can enroll up to three months before you turn 65 and for up to three months after.
Theres no penalty for enrolling in Original Medicare Part A while deferring Part B until you retire or youre no longer covered by group health insurance. Keep in mind that Original Medicare Parts A and B are completely different from Medicare Supplement Plans A and B.
You might also want to consider Original Medicare Part D, which covers prescription drug costs. If youre paying more than youd like for your prescription medication through group health insurance, Original Medicare can relieve some of your out-of-pocket expenses.
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If You Are Under 65 With A Disability:
Once youve enrolled in Medicare
Call ERS to provide us with the information located on your Medicare ID card. ERS will confirm your enrollment in Medicare Parts A and B and start the process to enroll you in the HealthSelectSM Medicare Advantage Plan, preferred provider organization administered by UnitedHealthcare.
Retirees and/or dependents with end-stage renal disease are eligible to enroll in HealthSelect MA PPO only after their 30-month coordination period with Medicare has ended.
Important: Until ERS receives your Medicare information, we cannot begin the process to enroll you in HealthSelect MA PPO. Plan ahead: The process can take 30 to 60 days before your HealthSelect MA PPO coverage begins. During this time, you will be enrolled in HealthSelectSM Secondary. If you need to access medical benefits while enrolled in HealthSelect Secondary, you will be charged a $200 deductible. HealthSelect MA PPO is a Medicare Part C plan that combines Medicare Parts A and B with your state health insurance. It provides additional group benefits you may not receive with Medicare alone and covers most or all of your medical expenses.
If you dont provide your Medicare information to ERS
Work With The Experts
Are you trying to determine if you should sign up for Medicare while you are still employed? Its a good idea to start doing your research before you turn 65, so you know what your best options are. In addition to the employers group plan and Original Medicare , you may want to consider Medicare Advantage plans or Medicare Supplement plans.
Contact our team of Medicare experts at VibrantUSA today. We will help answer your questions and make sure you have the details you need to make an informed decision about your healthcare coverage. As an independent agency, we have access to more than 50 different plans from 30 different carriers.
This means we work for you, not the insurance companies. With VibrantUSA, youre not just another number. We build relationships with our clients, working to truly understand your needs now and in the future. When you work with VibrantUSA, youll always have someone in your corner when it comes to making Medicare decisions.
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Do I Need To Sign Up For Medicare If Im On A Company Plan
If youre not yet 65 but are retired and receiving retiree health benefits, make sure youre aware of the employers rules regarding Medicare.
Some employers drop retirees from their plan when they turn 65. These employers require their former employees to transition 100% to Medicare at that time.
Others continue to provide supplemental benefits that are secondary to Medicare, like my friends plan.
Dont forget that Medicare doesnt automatically include drug coverage. Even if you dont take any medications, youll need to enroll in Part D to avoid penalties later.
Can I Keep My Employer Health Insurance With Medicare
If youre receiving health insurance coverage from your current place of work but also qualify for Medicare, you may find yourself choosing between Medicare and your group health plan. In most cases, the size of the company where you work determines whether youll face penalties for choosing not to enroll in Medicare when youre eligible.
Here are the rules for choosing employer health benefits instead of Medicare:
- If your employer has fewer than 20 employees, you must sign up for Medicare when youre eligible or you may face a late enrollment penalty for Part B when you sign up later.
- If your employer has 20 or more employees, you can delay signing up without any late enrollment penalties in the future.
If youre under age 65 and eligible for Medicare because of a disability, youre not required to sign up until you turn 65 years old. But if youre still receiving group health insurance coverage at that time, the same rules listed above apply.
Once you retire and give up your employer health benefits, you will have a special enrollment period of 8 months to enroll in Part A and Part B, if you havent enrolled already. This special enrollment period begins the month after your employment or group health plan ends.
There is no late enrollment penalty for enrolling in original Medicare during this special enrollment period if the rules above were followed.
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Theres No Need To Increase Coverage
Many seniors, who are not working at 65, rush to enroll in Medicare as soon as possible. If you are still working at age 65 and have coverage through a group plan with 20 or more employees, you dont need to sign up for Medicare. If your employer has fewer than 20 employees, then you must enroll in Medicare Parts A or B. This will be your primary insurance. Your employer plan could pay less or none if you do not enroll.It is often a good idea to sign up for Medicare Part A as soon as possible, even if your current health insurance covers you. This wont cost anything and Medicare can be your secondary insurance. In this instance, Medicare could pay for any medical expenses that your primary insurance does not cover.
The only exception is if youre contributing to a health savings account and wish to continue doing so. Even if the Medicare enrollees continue to be covered under a qualified HSA-qualified, high-deductible health plan, they are not permitted to contribute to an HSA.
