Employer With < 20 Employees

[Carin Carter]

I am hoping that folks with more practical experience can provide information. I am almost 65 and employed at a small company which provides group health insurance for all employees. I understand if there were more than 20 employees I could delay enrolling in part b, but no one (including Medicare) can tell me why I cannot delay part b in my situation, except to say that I should. The speaker at a recent SHIP class on Medicare stated that the insurer could refused to pay benefits since I did not mitigate their losses by enrolling in B despite premiums being paid. Our insurance broker says that’s absolutely not true, but he suggests I enroll in a,b, Medigap, and drop the company health plan anyway. Any input appreciated.

 

[MBSC]

It is one of the rules Congress built into Medicare. Small employers are also exempt from having to offer COBRA continuation coverage. These types of rules are designed to prevent small group plan premiums from skyrocketing. Small group plans are secondary to Medicare, meaning Medicare is primary and pays first. Medicare has to pay first in order for the small group plan to determine their remaining responsibility. It may be better to use a Medigap plan as secondary payer if the small group premium is high.

Large group plans can more easily absorb the increased claim volume from those over age 65, so Medicare is the secondary payer. Since the primary large group plan usually has generous benefits, Medicare Part B enrollment can usually be delayed.

Medicare and Employer Coverage – Small Companies under 20 Employees

Medicare is primary if you are age 65 or older and your employer has fewer than 20 employees. You will need both Part A & B because Medicare will pay first, and then your group insurance will pay secondary. Occasionally we see some insurance companies who will cover claims even if you don’t have Part B. You run the risk of that insurance company changing that at any time without warning, and leaving you stuck with all the expenses that Part B would normally cover. It’s not worth the risk – we advise always enrolling in Parts A & B if your employer has fewer than 20 employees and Medicare will be primary.

However, you may be able to delay enrolling in a Part D drug plan without penalty if your group plan has RX benefits, as most do. Be sure to compare costs. It is sometimes cheaper to leave the group insurance altogether and enroll in a Medicare supplement as your secondary instead.

Reference: https://boomerbenefits.com/new-to-medicare/medicare-and-employer-coverage/