Medicare Employer Coverage

Primary vs. Secondary Medicare Coverage

Medicare Employer Coverage

There could be some cases where you could be eligible for Medicare but are still employed by your company and are receiving group coverage. It can be confusing when determining how and when to apply for Medicare coverage. Depending on your situation, there are a couple of choices to save you from Medicare late enrollment penalties.

The rules differ based upon the size of the company you work for. For those who work in companies with under 20 employees, Medicare is the primary payer and you must have Medicare Part A and Medicare Part B to 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.

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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 could have Medicare as a Secondary Payer if you work for a company with more than 20 employees, and your employer insurance would be the primary payer.  Because Medicare Part A is usually free of charge, having this coverage as extra protection only benefits you and can limit exposure to costs like hospital stay or deductibles. 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.
  • Because you are properly enrolled, there is no 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! 

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