Employees with Dependents Enrolled in Employer-Sponsored Medical Plan

This section is for employees with dependents (e.g., spouse, children) who are also enrolled in the employer-sponsored medical plan and the employee pays some or all of the cost of dependent coverage.

If your family members also participate in your employer’s group health plan, then your decision to enroll in Medicare and drop the group plan will impact them. In the technical jargon of employee benefits, a “covered employee becoming entitled to Medicare is a COBRA qualifying event.” Boy, is that a mouthful. (See question #4 in the DOL’s FAQ on COBRA (My apologies for all the acronyms, but I couldn’t resist.)

What this means is that if you, the employee, choose to enroll in Medicare and terminate your employer-sponsored plan, then any dependents enrolled in the company plan will be able to continue their coverage without you.

They will have the same benefits as they had before you dropped out of the plan. If your employer has 20 or more employees and is subject to Federal COBRA laws, your dependents will pay 102 percent of the total cost of their coverage If your employer is subject to California laws and has between 2 to 19 employees your dependents will be able to continue their coverage under Cal-COBRA, but they must pay 110 percent of the monthly insurance cost.

Here is an interesting twist on the cost of COBRA or Cal-COBRA: the premium for your dependents is based on the age of the spouse or child who continues on the plan. So, if your spouse is much younger, and your group health plan uses age bands to set the monthly premium, your spouse’s coverage may be significantly less expensive than the premium for you as an employee at age 64 or 65. You’ll need to speak with the person in your company who handles the benefits to get the answer to this question.

All of this sounds a bit complicated, and it is. Don’t worry. Make BenefitsCafe.com the agent  for your company and/or enroll in a Medicare supplemental policy with us and we’ll guide you and your company through the process.

If we’re not the agent/broker/consultant for your company, then you should speak with the key decision-makers and ask them to make BenefitsCafe.com your agent. Give us a call (800) 746-0045.

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