Advances in healthcare and the drive towards healthier lifestyles have many Americans living and working longer than ever before.
According to the U.S. Bureau of Labor and Statistics, in the past decade the number of employees working past the Medicare eligibility age (currently 65) has increased by 52 percent. Many of them are opting to keep their employer-sponsored health insurance group plan and coordinate it with their Medicare benefits. Confusion often arises as to which plan will pay for which claims. Following are some tips for knowing how to use the employer-sponsored plan in conjunction with Medicare.
- Medicare consists of three parts. Medicare Part A (hospitalization), Part B (medical insurance), and Part D (prescription coverage). All eligible Americans are entitled to elect Medicare Part A at the age of 65 at no cost. Medicare Parts B and D have additional monthly charges. Elections for Parts B and D can be deferred to a later date provided the employee is covered by another creditable health plan, which means as good or better than Medicare. If the group-sponsored plan is not creditable, the employee will pay a lifetime penalty for late enrollment into Parts B and D when they actually enroll.
- Because Medicare coverage is not all inclusive and can involve substantial out-of-pocket costs for services, many people opt to either supplement their Medicare coverage with a “gap” policy which fills in where Medicare does not provide full coverage. There are many insurance plans through multiple resources that a Medicare eligible subscriber may elect.
- Another option is to elect Medicare Part C, also known as Medicare Advantage Plan, which is a wrap of Parts A, B, and D plus the gap coverage. The difference between electing Parts A, B, D, and a gap policy versus electing Part C/Medicare Advantage is that with the a-la-carte method, Medicare coverage is offered and administered through the federal government. If someone elects Medicare Part C/Medicare Advantage, all parts are administered through a private insurer sanctioned by Medicare.
- If the employee opts to continue with the employer-sponsored plan, they have the right to do so. The Age Discrimination in Employment Act (ADEA) prohibits employers from forcing an employee over the age of 65 to leave to plan, or to take a plan with lower benefits than what the rest of the group is offered. The employee may opt to enroll in Medicare Part A (free plan) and use the group-sponsored plan to fill in additional coverage needs.
- For groups with 20 or more employees, the group health plan will be considered primary, and Medicare Part A secondary. The employee would not be required to elect Medicare Part B in order for the group insurance to pay claims for office visits. For groups of less than 20, Medicare would be considered Primary. Claims would be processed through Medicare first, then through the group health plan as secondary. In this instance, the employee would be required by the health plan carrier to elect Medicare Part B before paying claims on a secondary basis.
As you can see, there are many variables that come into play for employees over the age of 65. Confusion often occurs when those employees are faced with making those coverage decisions. BCN Services can help your employees navigate through the sea of Medicare options. Please feel free to call us at 1-800-891-9911 or contact us here.
Frank Lewandowski, Partnership Manager