2. Am I required to enroll in Medicare Part B?
If you continue to work when you reach age 65 your employer-sponsored medical insurance plan may require you to enroll in Medicare Part B. Here’s why. If the company you work for has 2 to 19 employees, then Medicare is the primary payer, which means that Medicare pays your medical claims first, and then your company’s health insurance plan pays its portion.
If your employer has 20 or more employees, then Medicare is the secondary payer, and your group health plan pays your claims first. Whether Medicare is the primary or secondary payer is a BIG difference for the federal government and the insurance companies: whoever pays first pays more money.
Many of the insurance companies assume that a 65-year-old member of the group health plan is enrolled in Medicare Parts A and B, and they pay claims as if the member were enrolled.
Either you must enroll in Parts A and B to stay on the group health plan, or the premium is significantly higher if you are not enrolled. Some health insurance companies in California simply charge much higher premiums for enrollees age 65 and over without regard for enrollment in Medicare Part B. Learn about how to enroll in Medicare and a Med Sup plan.
Your second assignment is to: Find out the monthly cost (premium) for your group health insurance plan at age 65 – with and without – enrolling in Medicare Parts A and B. (It will impact your decision on whether or not you should stay on your group health plan or enroll in Medicare with a supplement plan (i.e., “Med Sup” or “Medi-Gap” Policy) or enroll in a senior HMO (Medicare Advantage, Part C Plan).
Following Assignments 1 and 2 will tell you the amount you’ll pay for Medicare Parts A & B and the cost of your group health plan and whether enrolling in Medicare Parts A & B will save you (or your employer) money on the cost of the group health insurance plan.
By doing assignment 3, you’ll see how the government handles prescription medicine (Medicare Part D) for people who continue to work and have coverage through their employer.
Important: Know that your employer can not induce you to enroll in Medicare (i.e., your employer can’t pay for your Medicare and Med Sup plan – nor can your employer pay you a bonus to enroll in Medicare.) If you chose to enroll in a Med Sup plan, you’ll have to pay the entire premium for Medicare and the Med Sup yourself.
The U.S. Department of Labor actually audits employers to see if they are violating this law. Of course, if you own the business you have the right to enroll in Medicare when you are eligible and you should read the section on business owners in this article.
Also important: If you continue to work and you are enrolled in the company’s group health insurance plan, you can delay your “Guarantee Issue” period for supplemental plans A,B,C,F,K and L. This means that you can postpone enrolling in a Med Sup plan for years after your 65th birthday and still purchase any policy without regard to your health on a guaranteed issued (GI) basis.
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