Who Pays If You Are Medicare Eligible but Still Work

(1/15/10)- Let's go over the details of whether or not you should continue with your employer's health care coverage or should you join Medicare Part B if you are older than 65 and are still working.

First of all we must point out there are different rules that apply depending on how many employees there are in your firm. If the employer has 20 or fewer employees, and you join Medicare Part B, then Medicare becomes the primary source of coverage if you are 65 or older.

If the employer has more than 20 workers, the emploer's insurer is the primary insurer. If on the other hand you have individual health insurance, it does not continue after you turn 65 depending on state law, or it becomes secondary to Medicare.

Medicare Part A is basically inpatient hospital coverage, and is free starting at age 65 if you have worked at least 10 years. Part B of Medicare covers doctors visits and other outpatient procedures. It costs at least $96.40 per month in 2010, and it could cost more if your income is above $85,000 for individuals or $170,000 for married couples filing joint returns.

Medicare Part D, or drug coverage is a separate item for which you must enroll in a drug plan and pay a monthly premium.

Medicare Part C is also known as Medicare Advantage. You must join a Medicare Advantage insurer to become part of its plan

(1/4/10)- What happens if you fail to enroll in Medicare more than 8 months after your eligibility date, and then stop working?- One of the rules for Medicare coverage seems to be ensnaring older workers who continue to work past their age of eligibility for Medicare coverage. The easiest time to sign up is when you turn 65 (or slightly older depending on when you were born), and, if you are collecting Social Security, enrollment is automatic.

If you keep working past your age of eligibility, and defer your Medicare coverage because your company's health plan coverage is better than coverage under Medicare, be aware of the rules that arise once you leave the job, either voluntarily or involuntarily.

If you enroll in Medicare within 8 months of the termination date from your company you will be okay and not be faced with any penalty. The financial penalty for the late enrollment is a permanent increase in your Medicare premium by 10%.

If you are late in enrolling, you can't enroll until the next general enrollment period begins, which runs from January 1 to March 31. Once enrolled your coverage does not begin until July 1, so in affect you have no coverage for your medical bills until July 1.

What is especially confusing for people who work past their eligibility date, but then join COBRA with the belief that the time period under COBRA extends the time limit to join Medicare past the 8 months deadline. This is not the case, so beware and apply for Medicare within 8 months of your termination date.

Please keep in mind that the annual election period for Medicare Part D was from November 15th through December 31st. For those who did not initially join a drug coverage plan, or for those who wanted to switch plans, those were the key dates to keep in mind.

The enrollment period for those who want to join a Medicare Advantage plan, the key dates to keep in mind are January 1 through March 31st. Those who want to join, drop or change a Medicare Advantage plan must act within this timeframe.

(8/21/99)- Many of us are faced with the situation wherein we continue to work past the age of 65 and so we are covered for health benefits under our employer's health plan. Who pays in that situation when we incur medical expenses, Medicare or your employer?

Under Federal law employer health plans can not discriminate against aged workers 65 and older and their spouses. These anti-discrimination laws apply if the employer has at least 20 employees. The health plan offered by your employer must contain the same health benefits for everyone in their employ, and you must be given the opportunity to accept of reject the health plan.

Also under Federal law employer plans must offer you the same health benefits under the same conditions offered to other employees if:

If you accept the employer's plan it becomes your primary plan as long as you or your spouse continue to work. If you reject the company's plan Medicare will become the primary plan. By definition the primary plan is the health plan that pays first on your health insurance claims. The secondary plan is the health plan that pays your health claims second.

If your employer's plan does not pay all of the charges, Medicare may pay secondary benefits only for Medicare covered services. Thus it may be worth your while to see if you can be reimbursed for some medical expenses that are not covered by your employer's health plan.

When you initially enroll in Medicare the questionnaire will ask you about any coverage that you may have through your employer. Medicare needs to find out if your employer or Medicare will be your primary payer.

Once you cease to be covered under your employer's health plan you have a period of 8 months within which you can enroll in Medicare medical insurance (Part B). You should also notify the insurance carrier that handles your Medicare claims. Be prepared to tell them the name and address of the employer's plan, the prior policy number, the date coverage stopped, and why. The amount of your premium for enrolling in Part B will not be increased if you enroll within the prescribed period of time.

Much of the information for this article was obtained from U.S. GPO: 1995-397-432.


By Allan Rubin
January 15, 2010
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