How Medicare and Group Health Coverage Work Together

So you’re turning 65 and closing in on being qualified for Original Medicare. You, however, are actively employed and are covered by your Employer’s Group Health coverage. You now have options to determine the most cost-effective way to get health coverage with the best benefits.

There are a few things to consider when you review your options. Employer size is important in determining what options you can exercise. Employees are defined by who works fulltime or part-time over the course of 20 weeks in the current or preceding year.

If your employer has 20 or more employees your group health coverage is the primary payer (they pay first) and Original Medicare is secondary. This is important to know so you can weigh out premium and coverage questions. Even if Part A is free, Part B has a $135.50/month premium in 2019. You have to look at your contribution to your employee group health coverage and compare it. Because your employee benefit is primary you can exercise not to enroll in Part B and pay Part B premiums. When you leave employment, you will have up to 8 months from the time your employee benefits stop to enroll in Part B without paying a Late Enrollment Penalty.

If your employer has less than 20 employees, Original Medicare is the primary payer and the group plan is the secondary payer. This means that for every provider visit, you must present your Original Medicare Red, White, and Blue card along with your group health insurance ID card. It is important to enroll in both Parts A and B. As with plans with over 20 employees there are premium and coverage options to review.

Whether your employer sponsored plan is primary or Medicare is primary, you should consider  what your out-of-pocket expenses will be when you compare the two. If your employer’s only offering is Bronze plan, which has a $6300 deductible, you may opt to sign up for Original Medicare Parts A and B, then sign up for a Medicare Supplement plan or a Medicare Advantage Plan. You will pay less out-of-pocket expenses for medical treatment when you exercise this option.

Turning 65 years old is not the only way you can qualify for Original Medicare. If you have End Stage Renal Disease (ESRD) you will qualify for Original Medicare regardless of how old you are. Your eligibility starts 4 months after you enroll so the primary payer for your treatment and dialysis is your group health plan. Even after the 4th month when Original Medicare is effective, there is a 30 month coordination period between Original Medicare and your group health plan in which the group plan is the primary payer. After the 30 month coordination period, Original Medicare becomes the primary payer regardless of the number of employees an employer has covered under the group plan.

One consideration, regardless of employer size, if you see a provider out of network, there is a possibility neither your Group Plan nor Original Medicare will pay.

Sorting through this issue can be complicated. We are Medicare broker/consultants who can help you decide which option works for you. If Medicare is your primary coverage, we can help you investigate your options for Medicare Supplement or Medicare Advantage plans.