How Does Employer-Sponsored Health Insurance work with Medicare?
The Medicare Enrollment period for 2018 begins October 15 and runs through December 7. This is the time for current enrollees to make changes to their plans for the upcoming year. With a growing number of Americans working past the age of 65, more people wonder how Medicare works if you (or your spouse) still have health insurance through your employer. This depends on your employer and some other factors.
Medicare and Employer Coverage
Medicare works differently with employer-sponsored health coverage, depending on the size of your employer:
Companies with Less than 20 Employees
If you work for an employer that has fewer than 20 employees, then Medicare pays primary and your employer’s insurance pays secondary. If you fall into this category, it is probably in your best interests to enroll for Medicare Part A and Part B as well. Medicare Part A is premium-free (if you have worked for 10 years) and covers hospitalization (inpatient) services, skilled nursing facility care, limited home health services, and hospice care. Medicare Part B covers medical services such as outpatient care, ambulance, preventative services, and equipment/supplies. There is a premium for Medicare Part B.
Though you are allowed to delay Medicare enrollment without penalty, you may run into some trouble later on if they are supposed to be paying primary. For example, if you have a covered incident and your employer’s health insurance is supposed to pay secondary, they may refuse to pay until Medicare pays, or they may try to recoup the payments they made. If you have not enrolled in Medicare Part B, you may be stuck with significant out-of-pocket costs.
Companies with 20 or More Employees
If you work for a larger company that has 20 or more employees, then your employer’s health insurance pays first and Medicare pays second. If you are in this type of situation, you do not need to enroll in Medicare Part B,while still actively at work.
There is another option for employees in large group plans who qualify for Medicare. They have the choice to cancel their employer group coverage, make Medicare their primary insurance, and purchase a Medigap plan to cover what Medicare does not cover. This can often be more affordable and provides very comprehensive coverage. In addition, a Medicare prescription plan would also need to be purchased.
Should I Enroll in Medicare?
The answer to the question of whether or not to enroll in Medicare or delay enrollment is different for each individual. If you are not sure, it is best to speak with your human resource department or a health insurance specialist to determine what is right for you. This way, you will be sure to make an informed decision before the December 7 Medicare enrollment deadline so you will have the coverage you need going into the New Year.