The intersection between Medicare & your group health plan

When an employee turns 65, he becomes eligible for Medicare. In 2010, 39.6 million were enrolled in the government-run health care program because of age-eligibility at an average annual benefit of $11,762. Many employees’ health insurance coverage may change when they become eligible, which is where a benefits administrator comes in. The sharing of costs can depend on how old the worker is, if they have a disability and the plan size. “We’re expecting for this to become a growing issue,” says Doug Goggin-Callahan, director of education at Medicare Rights Center. Because of the coupling of insurance coverage, employer-based insurance can sometimes become the secondary insurance, which is why it’s so important for employees to know when to enroll — it can decrease claims and avoid future litigation. The first chance to enroll in Medicare comes in the seven-month period surrounding his 65th birthday, or his 25th month of Social Security. Employees also can enroll early for coverage to start the month they become eligible.

How Medicare coordinates with a group health plan depends on the size of the plan, which can be classified as small or large. Under a small group plan (20 or less employees), Medicare becomes the primary health coverage for the employee. If the employee declines Part B coverage, outpatient and doctors benefits, she may have no health insurance and neither the group health plan or Medicare would be required to pay a bill. If an employee is eligible for Part B and becomes injured and the group health plan covers the expenses, the program can later stop payment or attempt to recoup payments, which can become a nightmare for employees. Medicare might later offer the option of retroactively buying back coverage. An employer can decide to stay primary, but the employee must get written confirmation from the employer and group health plan if she chooses to pay and doesn’t have to.