Top 3 questions for working Medicare beneficiaries:

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1. Should I stay on my Employer Group Plan or enroll in Medicare?
2. Do I have to enroll in Medicare?
3. What are the penalties if I do not enroll in Medicare?

Medicare and Employer Coverage – Large Companies 20+ Employees

Medicare is secondary if you age 65 or older and your employer has more than 20 employees and you are still ACTIVELY working (not a retiree or on COBRA). This is called Medicare Secondary Payer. In this scenario, your group plan pays first, and then Medicare pays second. (People under 65 on Medicare. These same rules apply if your group health coverage is through your spouse’s employer.

You likely have options to keep your employer insurance and Medicare will coordinate with that coverage. You’ll also want to compare the cost of that employer coverage against what it would cost you to roll over to Original Medicare, a Medicare Supplement (Medigap) and a stand alone Prescription Drug Plan -or- Medicare Advantage (Which includes a Prescription Drug Plan) as your primary insurance.

Again, this info is for beneficiaries age 65 or older. (Medicare coordination rules are different for people under age 65 on Medicare due to disability.)

These same rules apply if your group health coverage is through your spouse’s employer.

Medicare and Employer Coverage – Small Companies under 20 Employees

Coverage through a spouse and his/her employer or union has fewer than 20 employees, you should enroll in both Part A and Part B. In this case, Medicare pays before the employer insurance. This means that Medicare is the primary payer for your health coverage.

WARNING: If you do not enroll in Part B within 8 months of losing your coverage based on current employment, you may have to pay a lifetime late enrollment penalty. In addition, you will only be able to enroll in Part B during the Medicare General Enrollment Period (from January 1 to March 31 each year) and your coverage won’t start until July. This may cause a gap in your coverage.

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