If you’re covered in a group health insurance plan through your employer or your spouse’s employer, should you enroll in Medicare? Well, there are a number of considerations before making that decision.
The first two considerations are very important:
The # of employees at your employer
How you’re eligible for Medicare...based on Age, Disability, or ESRD (kidney failure)
Let’s dive into these two at the same time because they really tie together. And then at the end, we’ll summarize all items to consider when deciding whether Medicare is appropriate for you.
Medicare Based on Age - Turning 65
Large Employer (20+ Employees)
Primary: Group health plan
Secondary: Medicare
You really don’t need Part A or Part B, but some people enroll in Part A because there isn’t a premium. However, enrollment in ANY part of Medicare will prohibit you from contributing to a Health Savings Account (HSA).
DO NOT enroll in Part B in this situation. It has a monthly premium and you can delay it without penalty. Reference our blog How to Enroll in Medicare After Age 65 for guidance on when you do decide to enroll in Part B at a later date.
Small Employer (Under 20 Employees)
Primary: Medicare
Secondary: Group health plan
It’s the reverse here. You’ll need BOTH Part A & Part B in this situation as your primary coverage. The group plan will be as secondary coverage. If you don’t get Part B here, your group plan may act like you do have Part B and cover less on outpatient Part B claims.
We always advise to get BOTH Part A & Part B when covered in a small employer plan with less than 20 employees. Some group health plans provide a premium discount for having Medicare as primary. Check with your benefits coordinator to confirm.
Note: Some small employers will join with other employers in an association group health plan. This association setup might allow the employer to be considered a large employer. Confirm this with your plan administrator.
Medicare Based on Disability (Large & Small Employers)
The breakpoint for the number of employees is higher here. It’s 100+ or under 100 employees.
Employer with 100 or more employees...
Primary: Group health plan
Secondary: Medicare
Employer with less than 100 employees...
Primary: Medicare
Secondary: Group health plan
Medicare Based on ESRD - Kidney Failure (Any Size Employer)
If you’re eligible Medicare-eligible (based on kidney failure) and covered in a group health plan (or COBRA continuation coverage)...coordination works like this…
Note: Medicare typically doesn’t start until the 4th month of dialysis treatment. So prior to the 30-month coordination period, only the group health plan is involved.
First 30 months (Coordination Period)...
Primary: Group health plan (or COBRA)
Secondary: Medicare
After Coordination Period…
Primary: Medicare
Secondary: Group health plan (or COBRA)
Medicare & COBRA Continuation Coverage
Primary: Medicare
Secondary: COBRA
COBRA is a continuation of group health insurance coverage after separating service from your employer. It extends 18 months of additional coverage (sometimes up to 36 months). You need BOTH Part A & Part B in this situation.
Before we wrap up with a list of all items to consider, here’s a quick chart that summarizes what we just talked about:
All Considerations
Here is a list of all items to consider when becoming Medicare-eligible while covered in a group health plan:
# of employees at employer
How you are eligible for Medicare (Age, Disability, ESRD)
Type of health plan you have (PPO, High Deductible Health Plan)
Whether you're contributing to a Health Savings Account (HSA)
How the group plan premium compares to what you would spend while on Medicare and supplemental coverage
Your income (which determines your premiums paid to Medicare)
How the group plan deductible, max out-of-pocket, and other factors compare to Medicare and supplemental coverage
Whether you are a low or high utilizer of medical services
Whether you are also covering a younger spouse or other dependents on your group plan
When you plan to retire
Whether the group plan’s prescription drug benefits are “creditable” or “non-creditable” compared to Medicare Part D minimum standards -- Can be penalized if “non-creditable”
Other -- Whether your employer reimburses you for certain medical expenses, or contributes to your Health Savings Account
You always have Medicare Mindset on your side. We can analyze all of this on your behalf and provide guidance at no cost to you. Contact Us for assistance.
Reference Links
www.medicare.gov
Medicare & Employer Coverage
Medicare & ESRD (End-Stage Renal Disease)
Medicare & COBRA
Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.
