Everyone potentially eligible for a Social Security benefit, through their own work or as a dependent, can receive Medicare at age 65. Recipients of Social Security disability benefits or with end stage renal disease can qualify for Medicare before 65. For working Medicare recipients, Section 1862 (b) of the Social Security Act requires most employers to continue group health coverage without regard to Medicare. However, for some employers and retired employees, group health insurance may change with eligibility to Medicare.
Current Employees
Employee Medicare decisions depend on whether Medicare or their group plan is the primary payer. Medical bills are submitted to the primary insurance plan first. The secondary plan at most usually pays amounts not covered by the primary plan.
Which plan pays first depends partly on the age of the Medicare beneficiary, employment status and the size of the employer. For working Medicare recipients, the group health plan is primary if the worker is age 65 and the employer has at least 20 employees. If the worker receives Social Security based on disability, the group plan is primary, if the employer has at least 100 employees.
An employee's group health plan is always primary for the first 30 months of Medicare eligibility due to end stage renal disease (ESRD). Medicare is primary for smaller employers and after 30 months of ESRD eligibility.
Parts A and B
The Part A hospital insurance principally covers hospital inpatient costs. It is premium free if the worker paid enough into Social Security, so everyone eligible for Part A of Medicare should initiate enrollment three months before they become age 65. However, Part B has a premium, which in 2010 varies from $110.50 to $353.60 a month. If the group insurance is primary, Part B usually duplicates coverage. The employee can decline Part B and enroll later should their group coverage change.
Parts C and D
Medicare Part C, or Medicare Advantage, requires individuals to enroll in both Parts A and B of Medicare. Enrollees must use the Advantage plan's network of doctors and hospitals, so the plan normally would not coordinate with any group health plan. Employees need to contact their employer's plan regarding coverage options for employees interested in a Medicare Advantage plan.
Medicare Part D is prescription drug coverage. Enrollment requires payment of varying monthly premiums. If the employer's group plan provides prescription drugs, Medicare Part D would usually be duplicate coverage. If the group plan does not include prescription coverage, Medicare beneficiaries wanting drug coverage should select a Part D plan as soon as they become eligible for Medicare to avoid loss of coverage and late-enrollment penalties.
Medicare as Primary
Medicare is the primary payer when the employer of an employee at least 65 has fewer than 20 employees. Medicare is also primary for Medicare recipients receiving Social Security disability benefits when the employer has under 100 employees. Medicare always becomes primary when the employee stops working. Group coverage could change or terminate upon separation from their job.
If the employer's group plan remains unchanged upon retirement, such as Federal Employee Group Health Benefit plans, employees may prefer to use the group insurance and decline Medicare Part B, depending on the premium for Part B compared to the premium and coverage for the group insurance. If group coverage has changed or ended, employees who now need to enroll in Part B of Medicare are entitled to a special enrollment period that allows immediate eligibility. They should contact their Social Security office to enroll in Part B as soon as they know the date their group coverage will change or terminate.
Domestic Partnerships
Many group health plans cover the domestic partners of employees. If the employee's employment provides group coverage to his Medicare-eligible partner, Medicare is primary payer if the recipient is at least age 65. If the domestic partner receives Medicare because she receives Social Security disability, Medicare is secondary payer when the working partner's employer has at least 100 employees. Otherwise, Medicare is usually secondary payer. Medicare is always secondary payer for the first 30 months of Medicare eligibility due to end-stage renal disease.
Tags: Social Security, group plan, group health, Medicare Part, employer least, employer least employees, group coverage
