Medicare And Employer Coverage

If you turned 65 and are also actively working, there are several things to keep in mind. Some people may prefer to keep their employer insurance and combine it with Medicare. But you may also want to consider the cost of your employer coverage and compare it with what it would cost you to roll over Medicare as the primary insurance. Study your options carefully ahead of time, so that you can avoid any Medicare late enrollment penalties.

Employers with 20+ employees

Medicare is secondary if you are 65 years of age or older and work for an employer with 20 or more employees, haven’t retired and you are not on COBRA. This is known as “Medicare Secondary Payer.” In other words, your plan will pay first and Medicare second. Most people choose Part A if they work for a large employer except for those contributing to an HSA account and who want to keep on doing so.

Nevertheless, Medicare as secondary will cost you. With Part B, for example, you will have to pay a monthly premium based on your income. Some people may choose to delay enrolling in Medicare Part B and Part D while on their spouse’s or group’s health coverage. Employer benefits generally include outpatient benefits, so you may not want to pay those Part D and Part D premiums.

When you retire and go back to work

If you retire and then decide to return to work, and your employer provides health benefits, you may cancel Part B, and when you retire again you will have a second chance with the typical 6-month open enrollment window.

What about COBRA?

Medicare works differently with COBRA. It’s important you get it right and avoid owing penalties. With COBRA, Medicare will pay first. In other words, Medicare becomes your primary and COBRA will pay as secondary. Make sure you enroll in Part A and Part B during the Initial Enrollment Period, which stars three months before your 65th birthday month and it ends three months after your birthday month. If you work after 65 and retire later, make sure you enroll in Part B no later than your 8th month receiving COBRA benefits. If you fail to do so, you may end up paying a late penalty for Part B.

What about smaller companies under 20 employees?

Medicare becomes primary if you work for an employer with less than 20 employees and already turned 65. Since Medicare pays first, you will need both Part A and Part B. Group insurance will pay secondary. If your Employer group plan has RX benefits, you may delay enrolling in a Medicare Part D drug plan with no penalty. Make sure you compare costs first. It may be cheaper to leave your group insurance and enroll in a Medicare supplement as secondary instead.

Can I have private insurance and Medicare?

Yes, but there are some things to consider.  You will have to analyze Medicare costs and other costs, such as deductibles, and copays for your group coverage. An Insurance Line One agent can help you figure out which Medicare parts you need to consider. Request a quote here.

Sources
  • https://www.medicare.gov/supplements-other-insurance/how-medicare-works-with-other-insurance

  • https://www.medicare.gov/supplements-other-insurance/retiree-insurance

  • https://www.healthcare.gov/medicare/medicare-and-the-marketplace/

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