Navigating Medicare Enrollment for Businesses with 20 or More Employees

By Brian Krantz - June 15, 2023

In the landscape of healthcare coverage, different sized businesses are met with varying responsibilities and options. Previously, we discussed how small businesses with fewer than 20 employees must enroll in Medicare. Today, we turn our attention to larger businesses—those with 20 or more employees—and delve into the interplay between Medicare and employer-provided health insurance.

Understanding the Interaction Between Medicare and Job-Based Insurance:

Upon reaching 65 years of age, individuals become eligible for Medicare, the federal health insurance program primarily for older adults and certain disabled individuals. However, if you’re still working and covered under your employer’s health insurance, the situation becomes more complex. This is particularly true for larger companies, where specific rules govern the interaction between Medicare and job-based insurance.

Employer Responsibilities:

Larger businesses, those with 20 or more employees, are obligated to offer the same health benefits to employees aged 65 or older as they do to their younger colleagues. This obligation also extends to spouses under the age of 65. Here, the employer-based insurance serves as the primary coverage, with Medicare acting as a secondary payer. This means that the employer-based insurance primarily covers healthcare costs, with Medicare stepping in to cover any remaining costs.

The Special Enrollment Period:

If you’re eligible for Medicare due to age (65+) and are covered by your or your spouse’s job-based insurance, you have a Special Enrollment Period (SEP) to enroll in Medicare Part B. This SEP extends up to eight months after you no longer have coverage from current work. Significantly, this means you aren’t required to take Part B during your Initial Enrollment Period (IEP). However, in most cases, you should only delay Part B enrollment if your job-based insurance is the primary payer.

Primary vs. Secondary Insurance:

Job-based insurance becomes primary if it’s from an employer with 20 or more employees. In this scenario, Medicare serves as the secondary payer. Given the additional monthly premium associated with Part B, some people opt not to enroll if their job-based insurance offers substantial coverage.

Understanding “Coordination of Benefits”:

When you’re covered by both Medicare and another type of insurance—like job-based insurance—the Coordination of Benefits (COB) rules decide who pays first. For businesses with 20 or more employees, the group health plan pays first when you or a family member is still working and covered by the plan due to current employment.

The Bottom Line:

Understanding the interplay between Medicare and job-based insurance is crucial for businesses with 20 or more employees. While these businesses aren’t mandated to enroll their employees in Medicare, the option to do so could serve as a valuable safety net that enhances healthcare coverage. This, in turn, promotes the overall health and well-being of employees.

Moreover, Medicare can function as an effective secondary insurance. It could cover costs not picked up by the primary job-based insurance, potentially leading to significant reductions in out-of-pocket healthcare expenses for employees.

However, each individual’s situation is unique, and the decision to enroll in Medicare alongside existing job-based insurance should only be made after careful consideration of their specific healthcare needs and financial circumstances. It’s recommended to consult with a trusted insurance advisor or your human resources department to make an informed and personalized decision.

For more guidance and support, the team at Plan Medicare is here to help. If you have any questions or concerns, we’re just a call or a click away. You can reach us at 516-900-7877 or through our website. We strive to assist you in navigating the complexities of Medicare enrollment and ensure that you’re 100% confident in your healthcare decisions.

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