This article was last updated Oct. 20, 2022
Retirement is bound to be a part of every employee’s work cycle. You may even be able to identify a few employees within your workplace who are soon to retire.
Here’s the deal: If your employees would rather get a colonoscopy or shop for cable and internet plans than discuss Medicare or retirement, there’s a problem.
Can you blame them, though?
More than 70 percent of future (and current) retirees wish they had a better understanding of Medicare. It’s difficult when your employees are unsure of the right questions to ask, where to start, what the future could look like, or even which health insurance carrier to go with. And, to top it all off, your employees have to keep in mind Medicare has penalties if they don’t sign up in time.
As your company’s HR or benefits administrator, you have a lot on your plate already and knowing the ins and outs of Medicare may not be at the top of your to-do list. But, that doesn’t mean it can’t be. Achieve health plan hero status — and still have time in your day for other tasks — when you review this comprehensive list of questions your employees (and maybe even you!) didn’t know to ask about Medicare.
Medicare not your area of expertise? We can help.
One thing to remember about Medicare is that there is no notification or warning from Medicare or Social Security Administration that prompts individuals to enroll — it's completely on the individual. But having an employer-sponsored health insurance plan allows employees to delay Medicare Part B without a late enrollment penalty External Site even if they choose to keep working past age 65. Please note: COBRA and retiree coverage do not qualify an employee to waive Part B.
How does Medicare work with an employer-sponsored health insurance plan?
In some cases, Medicare is the primary payer, meaning they pay first before other insurance. In those instances, other insurance — like employer-sponsored insurance — is the secondary payer. Here are the general guidelines for who pays first:
- If your organization has 20 or more employees, then the employer plan pays first, and Medicare pays second.
- If your organization has less than 20 employees and isn't part of a multi-employer or multiple employer group health plan, then Medicare pays first, and the employer plan pays second.
- If the employer has less than 20 employees, the employer plan pays first, and Medicare pays second if both of these conditions apply:
- The employer is part of a multi-employer or multiple employer group health plan.
- At least one of the other employers has 20 or more employees.
Get more details on Medicare.gov External Site
If my employee is on their spouse's insurance plan, does Medicare pay first or second?
Medicare is the primary payer if both of these situations apply:
- A domestic partner is entitled to Medicare on the basis of age.
- A domestic partner has group health plan coverage based on the current employment status of his/her partner.
Medicare is the secondary payer when:
- The employee's domestic partner is entitled to Medicare on the basis of disability and is covered by a large group health plan.
- For the 30-month coordination period when the employee's domestic partner is eligible for Medicare on the basis of end-stage renal disease (ESRD) and is covered by a group health plan on any basis.
- When the employee's domestic partner is entitled to Medicare on the basis of age and has group health plan coverage on the basis of his/her own current employment status.
Should my employee keep our employer-sponsored health insurance or switch to Medicare?
In most cases, your employee should only delay their enrollment to Medicare Part B if the employer health plan is the primary payer. Additionally, if your employees have a health savings account, they will no longer be able to contribute to it when they enroll in Medicare, however it can vary on a case-by-case basis.
Help employees decide — employer insurance or Medicare?
Search for form numbers N-2319173 (IA) or N-3319285 AN-T (SD) on the Wellmark Marketing Toolkit to download the “Medicare Costs: Let’s Do the Math” worksheet and work through it with your employees to determine the best option for them.
What can my employees do with their health savings account (HSA) when they switch to Medicare?
When an employee enrolls in Medicare Part A, they are no longer eligible to contribute External Site pre-tax dollars to an HSA. The month an employee’s Medicare plan begins, they should switch their HSA to $0 per month. However, your employees can continue to withdraw money from an HSA after they enroll in Medicare to help pay for medical expenses (e.g., deductibles, premiums, copays and coinsurance).
What is the difference between Medicare Supplement and Medicare Advantage?
Medicare Supplement, also referred to as Medigap, helps pay for some of the health care costs that Original Medicare doesn't cover, such as copays, coinsurance and deductibles.
A Medicare Supplement policy is different than a Medicare Advantage plan. With Medicare Supplement:
- Your employee pays the private insurance company a monthly premium for their policy in addition to the monthly Part B premium to Medicare.
- Medicare Supplement plans only cover one person. If your employee has a spouse, they will need to get a separate policy.
- Your employees can only purchase a Medicare Supplement plan from an insurance carrier licensed in your state to sell.
Medicare Advantage plans are similar to purchasing a private health insurance plan. With these plans, office visits, lab work, surgery and more is covered with a small copay. However, this could depend on HMO or PPO network plans and a yearly limit on out-of-pocket expenses. Not that, similar to a private health insurance plan, there are varying rules and benefits. For example, one may come with prescription drug coverage and another may require a referral to a specialist before you get a prescription.
What are the different penalties for Medicare?
Medicare Part A penalty:Typically, Part A is completely free to those who are eligible. But, if an employee isn’t eligible for premium-free External Site Part A, and doesn’t sign up for it when they are first eligible, their monthly premium may increase.
Medicare Part B penalty:If an employee doesn’t sign up for Part B when they are first eligible, they will pay a late enrollment fee External Site and will continue to pay this fee for as long as they continue with Part B. Note: If an employee remains on the active employer plan, then they will not incur Part B penalties by delaying enrollment.
Medicare Part D penalty:If an employee has a prescription plan that provides creditable coverage through their employer, they can choose to delay enrolling in Part D. However, there is a lifetime late enrollment penalty if they doesn't sign up once the employer plan ends.
Learn more about Medicare options for those who are working past 65 Opens in a new window.
It’s true, Wellmark Blue Cross and Blue Shield members get more.
With Wellmark, your employees will get more than a Medicare plan, they’ll get peace of mind knowing their coverage is coming from a company they know and trust. Your employees can also count on a variety of extra programs and services such as:
Exclusive discounts through Blue365®.Your employees receive Blue365 discounts External Site on gym memberships, heart rate monitors and more.
BlueSMFind member stories, recipes, health tips and more. The magazine comes in the mail, but exclusive content Opens in a new window can be found online at any time.
Questions? Contact your authorized Wellmark account representative, or email us at MedicareBusinessTeam@Wellmark.com.