Medicare & Employer Coverage

How Two Plans Can Work Together

If you or your spouse is still working while you turn 65, you may have both employer coverage and Medicare insurance. You can have both plans simultaneously rather than pick one over the other.

The reimbursement structure is slightly different, meaning that one insurance plan may pay before the other. This could affect your out-of-pocket expenses. Learn more about the two plans below.

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Primary vs. Secondary Payer

When you have two plans, you have two payers. When one plan pays first, they’re called the primary payer. The other plan is then called the secondary player.

The primary payer pays up to the limits of its coverage. The secondary payer pays if there are costs the primary payer doesn’t cover. However, the secondary payer isn’t necessarily obligated to pay all of the uncovered costs.

Which Plan Pays When

Generally, Medicare will pay first if:

You have retiree insurance.
You are 65 or older and have a group health plan based on current employment with an employer that has fewer than 20 employees.
You are under 65, have a disability, and have group health plan coverage based on current employment with an employer that has fewer than 100 employees.
You have Medicaid.

Your employer insurance will pay first if:

You are 65 or older and have a group health plan based on current employment with an employer with 20 or more employees.
You are under 65, have a disability, and have group health plan coverage based on current employment with an employer that has 100 or more employees.
Have End-Stage Renal Disease (ESRD).

If you have ESRD, your group health plan will pay first for the first 30 months, and then Medicare will pay first.

It’s important to check with the union or employer coverage representative for specifics about the exact payment structure.

Medicare Coverage

When you enroll in Medicare, you’re automatically enrolled in Part A. If you have employer coverage, you may be wondering if you still need Medicare Parts B and D. You may not need those parts of Medicare depending on your employer coverage.

One thing to keep in mind is that if you enroll in Part B, your employer insurance will pay as the primary payer. Whether this is a good or bad thing depends on your employer coverage. Other employer insurances will only pay as the secondary payer if you are enrolled in Medicare Part B. Depending on your coverage, this could cost you more out-of-pocket money.

Second, some employer coverage includes prescription drug coverage. If your employer plan does cover prescription drugs, you don’t need to purchase Medicare Part D.

Summary

If you’re still working when you qualify for Medicare, you can hold both Medicare and your employer coverage policies. It’s important to know which pays as the primary payer and which is the secondary payer. You should talk to your employer/union benefits representative to know more about your employer plan. Contact us at Modern Senior Benefits to learn more about your Medicare coverage.