If you’re approaching eligibility for Medicare, but already have insurance through your own or your spouse’s employer, you may be wondering what, if anything, you need to do. First, you should know that federal law requires employers to offer the same coverage to their employees age 65 or over as they do to employees under age 65. If the employer offers coverage to spouses, they must offer the same coverage, regardless of age.

You have a few options when you first become eligible for Medicare:

• Medicare + Employer Plan: You can keep your employer health plan and also enroll in Medicare.
• Medicare Only: You can drop your employer health plan and enroll in Medicare instead.
• Employer Health Plan Only: You can skip enrolling in Medicare and stay on your employer health plan alone.

There are many factors to consider when deciding what to do when you become eligible for Medicare, highlighted below.

 

First, you’ll need to determine whether your employer health plan will be primary or secondary to Medicare. Generally, if your employer has fewer than 20 employees, Medicare will become your primary coverage and your employer plan will be secondary. If your employer has more than 20 employees, your employer health plan will be primary and Medicare will be secondary.

Primary insurers pay first, and secondary insurers generally pay some or all of the unpaid portion of covered health care expenses after the primary insurer has paid.

For most people, Medicare Part A is free. Although you are not required to enroll in Medicare if you have employer health coverage, most people should enroll in Part A when they become eligible in any case since it’s free (for most people).

 

If you have a Health Savings Account (HSA) through work, you may not want to enroll in Medicare Part A right away, because your employer might stop contributing to your HSA—talk to your human resources department before enrolling in Medicare Part A to determine how Medicare may change your benefits.

It’s important to note that once you enroll in Medicare Part A and/or Part B, the clock will start ticking for the Medicare Part D prescription drug benefit. Normally you must enroll in Part D within a certain time limit of enrolling in Part A and/or B to avoid the Part D late enrollment penalty. However, if your employer health plan offers “creditable” prescription drug coverage (equal to or better than Medicare’s), then you may be able to delay Part D enrollment without penalty.

 

Deciding whether to enroll in Medicare Part B, for which everyone pays a monthly premium, depends on several factors, including 1) whether your employer health plan is primary to Medicare, and 2) whether you are happy with your employer’s coverage.

If Medicare will be your primary insurer, you should purchase both Parts A and B in order to be fully covered for hospital and medical costs. If your employer plan will be primary, you’ll need to determine whether paying for Part B will benefit you by helping to offset out-of- pocket costs. For example, if your employer plan has a high deductible and/or large copayments and coinsurance amounts, you may benefit from having Part B in addition to your employer plan, as Medicare should help pick up some of the unpaid portion of covered health care expenses after your employer health plan has paid. If, on the other hand, your employer offers a good plan with few out-of- pocket costs, taking Part B is probably not necessary—and, keep in mind, Part B has a monthly premium.

Note that some unions and current/former employers will automatically enroll you in a Medicare Advantage (Part C) plan once you become eligible for Medicare. Medicare Advantage plans are Medicare-approved plans administered by private health insurers. If this happens, you’ll have the option to choose Original Medicare (Parts A and B) or switch to a different Medicare Advantage plan instead. If you switch plans, however, your employer or union could terminate your plan or reduce your health benefits, so it’s important to talk to your plan before switching.

 

Whether or not you decide to enroll in Part A and/or B in addition to your employer plan, you qualify for a special enrollment period (SEP), which means you can enroll in Medicare without any penalties at any time while you still have employer health coverage, and for eight months after you or your spouse stops working or you lose your employer health coverage.

Note that COBRA and retiree insurance are not considered current insurance and thus do not qualify for special enrollment.

 

Medicare supplement (Medigap) plans help pay for costs not covered by Medicare, such as deductibles, copayments, and coinsurance. These Medicare-approved plans are sold through private insurance carriers. Once you enroll in Part B you have a six-month open enrollment period to purchase a Medigap policy without any underwriting—that is, without being subject to increased rates or denials based on your health status or preexisting conditions. After the six month open enrollment period, you could be charged more or denied coverage, so make sure not to miss this window if you decide to enroll in Medicare Part B.

You are eligible to enroll in Medicare during your Initial Enrollment Period (IEP), which begins three months before your 65th birthday and ends three months after your birthday month ends. If you are collecting Social Security you will automatically be enrolled in both Part A and Part B which will start the first day of your birthday month (if your birthday is on the first day of the month it will begin one month prior). If you want to refuse your Part B coverage sign the back of the card and send it back to the Center for Medicare & Medicaid Services (CMS). Please note that if you don’t sign up before your 65th birthday then your coverage will be delayed for each month that you waited. for example, if you apply two months after your 65th birthday then your Medicare will begin two months after you apply.  If you are on Disability your Medicare will begin on the 25th month after your benefits begin.

Generally, if you have coverage through your or your spouse’s employer, you will not face penalties for late enrollment in Medicare Parts A and B, or penalties for Part D, as long as your employer offers “creditable” drug coverage.

The experts at CA Medicare can help you understand all your options for Medicare enrollment, whether you have coverage through work or need to enroll in Medicare for primary coverage. Please contact us.

Begins October 15 and Ends December 7 for a January 1 effective date. If you want to enroll in a Medicare Advantage Plan or Prescription Drug Plan (PDP) you can do so if you’re enrolled in both Medicare Parts A & B and don’t have ESRD.

If you are on a Medicare Supplement and are frustrated with your increasing premiums, we highly suggest that you investigate a Medicare Advantage Prescription Drug plan (MAPD). Unlike a Medicare Supplement, a MAPD’s premium doesn’t increase as you get older, and depending on where you live can be premium free. If you have a MAPD plan, now is the time to shop around. Call our office at 1-800-356-3615to see if your prescriptions will continue to be on the formulary. MAPD plans vary on your specific healthcare needs. You may qualify for a plan that will provide you extra transportation or zero cost diabetic supplies. Some plans have maximum out of pocket that can be thousands less. Don’t wait until it is too late to find out! Let us help you figure out your options during Annual Election Period (AEP).

Initial Enrollment Period (IEP)

Begins three months before your 65th birthday, includes your birthday month and ends three months after your birthday month ends.

Annual Election Period (AEP)

Begins October 15 and Ends December 7 for a January 1 effective date.

Special Enrollment Period.

Several circumstances will qualify you for a Special Enrollment Period (SEP):

1. Your plan is exiting
2. You are leaving your plans service area
3. You have left your employer medical coverage within the 8-month period that begins the month after employment ends or the coverage ends, whichever happened first.

You are eligible to enroll in a MAPD or PDP plan if you are enrolled in Medicare Part A & B and don’t have ESRD.