How Medicare Works with
Employer-Based Health Insurance:
A Guide for Employers,
Professionals and Consumers
December 2011
With generous support from The Retirement Research Foundation
1
Introduction
Medicare is the federal government health insurance program for people age 65
and older and people with disabilities. As the baby boomers age and more
Americans become eligible for Medicare, there is a great need for information
about how employer-based coverage coordinates with the Medicare program. It
can be challenging for people to figure out how their new Medicare benefits work
with their existing health benefits, and often employers do not have all the
answers.
The economic downturn has resulted in older adults working longer or retiring
earlier than they had planned. One source of confusion is that the full Social
Security retirement age is now 66, but people may choose to begin their benefits
as early as age 62 or as late as age 70. However, the age they become eligible
for Medicare remains fixed at 65. Many people do not realize they have to start
thinking about Medicare before they retire.
It is important for people to understand their rights and know when they need to
enroll in Medicare. Many people do not know when they should sign up for
Medicare benefits, do not get accurate advice or do not enroll at the right time.
As a result, they are faced with financial consequences or significant gaps in
health insurance coverage.
The Medicare Rights Center and AgeOptions (on behalf of the Make Medicare
Work Coalition) have put together this Guide, with support from The Retirement
Research Foundation, to help answer questions that consumers, employers and
other professionals may have about transitioning to Medicare.
The Guide is intended to help people make informed decisions when they
become eligible for Medicare. It can also help current Medicare beneficiaries who
have questions about how Medicare works with their employer coverage.
Employer-based health insurance such as current employer coverage, retiree or
union coverage, and COBRA all work with Medicare in different ways.
The Guide is a toolkit with a variety of materials that explain how Medicare
coordinates with other types of insurance coverage, but they do not address
every possible situation. For example, the information does not apply to people
who are eligible for Medicare because of kidney failure. In addition, the rules for
people with disabilities who have Medicare and return to work are not fully
examined.
2
Materials in this toolkit:
Training
o Medicare and Employer Benefits Training – The Basics
These training slides are for professionals and people with Medicare
who want to know how their current or former employer coverage will
coordinate with Medicare. They focus on basic steps and principles
for correctly enrolling in Part B based on the individual’s other
insurance coverage.
o Medicare and Employer Benefits Professional Training
These training slides are for professionals who have experience
working with Medicare beneficiaries. They go into detail about
Medicare coordination with current employer, retiree and COBRA
insurance, and the differences between coverage from large and
small group health plans. The training features case studies and
specific examples. It also highlights the do’s and don’ts of Part B
enrollment and explains the consequences of late enrollment.
Frequently Asked Questions
This packet contains a series of frequently asked questions and their
answers. The questions vary from general questions about Medicare to
specific questions about different types of coverage and how they work for
someone with Medicare. The questions were informed by AgeOptions and
Medicare Rights’ work with consumers.
Individual Scenarios
Four common Part B coordination situations are outlined in these
scenarios. Each situation is framed as a question from a consumer and the
response gives a step-by-step explanation. These scenarios are meant to
give people in different situations a way to see how Medicare coordination
of benefits rules may apply to them.
Enrollment (Part B Handouts)
o Part B Enrollment Periods - Outlines the different times when
someone can enroll in Part B
o Part B Special Enrollment Period - For people who continue to work
and decline Part B
o What to Consider Before Declining Part B
3
o Equitable Relief - A way for people to get Medicare if they did not
enroll at the right time because of misinformation
Glossary of Terms
o A list of Medicare terms and their definitions
How to Use This Guide as a Teaching Resource
This toolkit can be used to provide trainings to consumers, employer benefits
staff and other professionals. The scenarios and handouts may also be used by
employers and professionals when counseling consumers.
In addition to using these materials, anyone making a decision about when to
enroll in Part B should contact the Social Security Administration at (800-7721213). It is important to keep notes about the date, time and representative with
whom you spoke as well as what was discussed. This will be helpful if there are
questions about benefits eligibility in the future.
Additional Resources
Centers for Medicare & Medicaid Services: Medicare Guide to Who Pays First
http://www.medicare.gov/Publications/Pubs/pdf/02179.pdf
Centers for Medicare & Medicaid Services: Medicare and You Handbook 2012
http://www.medicare.gov/publications/pubs/pdf/10050.pdf
Information about employer insurance and Medicare on Medicare Interactive:
http://www.medicareinteractive.org/page2.php?topic=counselor&page=sec
tion&toc_id=40#top
Medicare Rights University webinar “Employer Insurance and Medicare”:
http://www.medicarerightsuniversity.org/memberspage?s2member_seeking=page-2275&s2member_level_req=1
4
Section 1:
Training
Medicare and
Employer-Based
Coverage – T he Basics
What is Medicare?
• A federal health insurance program
• Run by the Centers for Medicare and
Medicaid Services (CMS)
• Benefit decisions controlled by the U.S.
Congress
• Social Security Administration (SSA)
handles enrollment and eligibility
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
1
Medicare has 4 Parts – A,B,C,D
Original Medicare
• Part A – Hospital Insurance: hospital, skilled
nursing facility, home health, hospice
• Part B – Medical Insurance: doctors, outpatient
services, preventive services, lab tests, ambulance
services, medical equipment and supplies
Provided through private companies that have
contracts with Medicare
• Part C – Medicare Advantage
• Part D – Prescription Drug Plans
Make Medicare Work Coalition
Who is eligible for Medicare?
• Age and work history
– Age 65+ and eligible for benefits under either
Social Security, Railroad Retirement, federal,
state or local employee
• 40+ quarters of Social Security covered employment =
eligible for Social Security AND
– Part A - (premium free)
– Part B – pay a monthly premium
• If married – may receive benefits under a spouse’s
work record
• May also receive benefits under a former spouse if
married at least 10 years
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
2
Others Eligible
• Persons with disabilities
– Receiving disability benefits under Social
Security Disability Insurance (SSDI) or
Railroad Retirement for 24 months or more
• Any age
– End-Stage Renal Disease (ESRD)
– Amyoptrophic Later Sclerosis (ALS) – Lou
Gehrig’s disease
Make Medicare Work Coalition
Applying for Medicare vs. Being
Automatically Enrolled
• Automatically enrolled
– You will automatically be enrolled in Medicare Parts
A and B when you turn 65 or on your 25th month of
disability if you are already receiving Social Security
benefits when you become eligible for Medicare and
have enough work quarters
• Applying for Medicare
– You will need to apply for Medicare if you are not
yet collecting Social Security benefits when you turn
65 or decide to delay taking your benefits past your
retirement age
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
3
If You Decide to Delay Your
Medicare Coverage…
• Make sure you have other private insurance that
will be primary– always check with your plan’s
benefits administrator to find out if you can
delay Part B
• Take Part A since it is premium free but….
• To delay Part B if you were auto-enrolled, fill out
the back of your Medicare card and mail it back to
SSA
• Medicare will send you a new card with only a Part
A effective date
Make Medicare Work Coalition
Front of Medicare Card
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
4
Back of Medicare Card
Make Medicare Work Coalition
Part B Enrollment Periods
• Initial Enrollment Period - First time you are eligible for
Medicare
– 7 months (3-1-3 rule)
– 3 months before, month of and up to 3 months after 65th birthday or 25th
month of SSA disability
• Special Enrollment Period (SEP) - may delay enrollment in Part B if
covered by a group health plan based on current employment that is
primary
– Receive an 8-month SEP to enroll in Part B once you stop working or
your coverage ends
• General Enrollment Period – if you did not enroll in Part B when
first eligible
– January 1 – March 31 of each year
– Part B coverage begins July1st of the same year
– Penalties apply (10% for each full 12-months you were eligible but did
not enroll)
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
5
Medicare and Retiree
Insurance
Make Medicare Work Coalition
Medicare and Retiree Insurance
• Insurance offered by your former employer (or a
spouse’s) once you retire
• Medicare is always primary and your retiree
plan is secondary
• You are responsible for both Medicare’s and
retiree plan’s premiums
• Your former employer is not required to offer you
the same coverage as when you were working
– Your retiree benefits and premiums may
change once you turn 65
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
6
Medicare and Retiree Insurance
• Each retiree plan is different
• Contact your plan’s benefits administrator to find
out what is covered and what your out-of-pocket
costs will be
• Remember - retiree insurance almost always
requires you to enroll in Medicare Parts A and
B since Medicare pays first and your retiree plan
pays second
– If you do not, your retiree plan may not pay
anything
Make Medicare Work Coalition
Consider your options and
out-of-pocket costs:
– Which is more affordable and best suits your needs?
• Medicare and your retiree plan OR
• Medicare, Medigap and a Part D plan or Medicare
Advantage plan
– Note: enrolling in Part B triggers your open
enrollment period to buy a Medigap policy with
guaranteed issue from any company (lasts 6
months)
– Does your retiree plan offer extra benefits not
covered by Medicare?
– Are members of your family covered under your
retiree plan?
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
7
If You Have Retiree Coverage and
Delay Enrolling in Part B…
• You will have to pay a Part B late enrollment
penalty when you finally do decide to enroll
– 10% of the Part B premium for every full 12
months you were eligible but did not enroll
– Penalty is for life and is not capped
• Will only be able to enroll during the Part B
General Enrollment Period
– January 1 – March 31 of each year and
coverage will begin on July 1st
Make Medicare Work Coalition
Medicare and
Current Employer
Insurance
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
8
Medicare and Employer Coverage
• Employer Group Health Plan = coverage based on
your or a family member’s current employment
• Most people take Part A because it is premiumfree
• Whether you need to enroll in Medicare Part B
depends on
– your age and
– how many employees work at your company
Make Medicare Work Coalition
Medicare and Employer Coverage
• Each employer plan works differently
• You should ALWAYS contact your plan’s
benefits administrator to find out if you need
to enroll in Medicare Part B
• Confirm the information with the Social
Security Administration
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
9
Medicare and Employer plans for 65+
• Medicare is primary and employer plan is secondary if
your company has
– Less than 20 employees
– Will need to enroll in Medicare Parts A and B
• Medicare is secondary and your employer plan is
primary if your company has
– 20 or more employees
– May be able to delay enrolling in Part B
– Will receive an 8-month SEP to enroll in Part B
anytime while you are still working or when your
coverage ends – whichever happens first.
Make Medicare Work Coalition
Medicare and Employer Plans for
People With Disabilities Under 65
• Medicare is primary if your
– Company has less than 100 employees
– You will need to enroll in Parts A and B to make sure
you are covered
• Medicare is secondary if your
– Company has 100 or more employees
– May be able to delay enrolling in Part B
– Will receive an 8-month SEP to enroll in Part B when
your coverage ends or you stop working – whichever
happens first
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
10
Multi-Employer Coverage
• Check with your plan’s benefits administrator to
find out how many people work for your
company
– Whether Medicare is primary or secondary depends
on how many people work at your company and not
how many are enrolled in the health plan
– Sometimes employers with fewer employees come
together and create a multiemployer plan
– Offer the same coverage as larger companies
– Makes a difference if Medicare is primary or
secondary
Make Medicare Work Coalition
If You Lose Your Job and Employer
Coverage…..
• Sign up for Part B and Part D as soon as you can
• Part B - you have an 8-month special enrollment period
(SEP) to enroll in Part B without penalty
– The sooner you enroll in Part B the sooner your coverage
begins
– Enrolling in Part B also triggers your 6-month Medigap open
enrollment period
– Explore options for your dependents
• Part D- You only have 63 days to enroll in Part D plan
without penalty
– Your plan will begin the first of the month following the
month you enroll
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
11
Medicare and COBRA
(Consolidated Omnibus Budget
Reconciliation Act)
Make Medicare Work Coalition
Medicare and COBRA
• COBRA is continued health insurance that an
employer can offer you once your employer
group health plan ends
• Employers with 20 or more employees are
usually required to offer COBRA
• Your contribution may be higher than before
• COBRA always pays second to Medicare
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
12
Medicare and COBRA
• Medicare is always primary to COBRA
coverage
• You should enroll in Part B if eligible
• You will have to pay a Part B late enrollment
penalty if you decide to delay enrolling in
Medicare because you had COBRA
• Rules are different for people with ESRD
• Note COBRA IS creditable coverage for Part D
Make Medicare Work Coalition
Medicare First, Then COBRA
• If you have Medicare first and then are
offered COBRA, you can enroll in COBRA
• Keep your Medicare coverage. Medicare is
primary and COBRA is secondary
– COBRA may act like a Medigap policy and fill in
the gaps not covered by Medicare
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
13
Consider Your Options and
Circumstances
– Is buying a Medigap policy and enrolling
in Part D plan more affordable?
– Does COBRA offer extra benefits like
dental or vision?
– Do you have family members covered
under your COBRA plan?
Make Medicare Work Coalition
COBRA First, Then Medicare
• If you are new to Medicare, you should enroll in
Medicare Part B during your initial enrollment
period.
• You should enroll in Medicare because:
– COBRA coverage usually ends when you
become eligible for Medicare
– If you wait to enroll after your initial enrollment
period, you do not get an SEP to enroll in Part B
when your COBRA ends
• Enroll in Medicare when your Group Health Plan
ends and not when COBRA ends
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
14
COBRA first, then Medicare –
continued
• COBRA may not realize right away you
are eligible for Medicare but did not enroll
and continue to cover you
• COBRA plan can come back and recoup
any payments made on your behalf
because Medicare should have been
primary
Make Medicare Work Coalition
Medicare Part D and
Other Insurance
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
15
Part D and Retiree Insurance
• If retiree plan offers prescription drug
coverage make sure it is creditable
– Ask your plan for a “notice of creditable
coverage”
• You will have 63 days to enroll in a Part
D plan if your retiree prescription drug
benefits come to an end
– Will not have a penalty as long as you enroll
in a Part D plan within 63 days of losing your
coverage
Make Medicare Work Coalition
Part D and Retiree Insurance
• Check with your plan’s benefits
administrator to find out if it offers drug
coverage
• Do not enroll in Medicare Part D plan
without checking with your retiree plan first
– In many cases, enrolling in a Medicare Part D
plan will cause you to lose ALL your retiree
plan health benefits
– You may not be able to get them back
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
16
Part D and Employer Coverage
• Check with your employer plan’s benefit
administrator to see if it offers drug coverage
• Make sure it is creditable and ask for a “notice of
creditable coverage”
• You have 63 days to enroll in a Part D plan
without penalty once your employer plan ends
– Remember this is different than the 8 months
you have to enroll in Part B!
Make Medicare Work Coalition
Part D and COBRA
• Unlike Part B, COBRA is considered
creditable coverage under Medicare Part D
• Can delay enrolling in Part D if your COBRA
includes prescription drug coverage and it is
creditable
• You have 63 days to enroll into a Part D plan
once your COBRA coverage ends
• Will not have to pay a Part D late enrollment
penalty
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
17
Summary and Useful Tips
• Remember each plan is different!!
– Always contact the plan’s benefits administrator to
find out how the plan works with Medicare and
whether you need to enroll in Part B
• Contact Social Security to confirm plan’s guidance
on whether you need to enroll in Part B
– Social Security may reconsider a late enrollment
penalty or let you enroll outside of an enrollment
period if misinformation was provided to you by a
federal agency
• Keep detailed notes and documentation if possible
when contacting your plan and Social Security
Make Medicare Work Coalition
Medicare for Individuals
Under Age 65 and Working
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
18
Will Medicare Continue When
You Get a Job?
• If you are under age 65, Medicare will continue
as long as you receive a Social Security
Disability Insurance (SSDI) check
• If your SSDI benefit checks stop, individuals
under age 65 who work, will continue to receive
at least 93 consecutive months of Medicare
after the Trial Work Period
• Must continue to have a disability during the 93
months
Make Medicare Work Coalition
Medicare Part A and Part B
Costs When You Begin Working
• After the 93 months of extended Medicare
ends, you have an option to purchase it if you
still have a disability
• You will be responsible for Medicare premium
costs once extended Medicare ends
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
19
How Medicare Works If Your Job
Offers Private Insurance
• Check with your benefits administrator to find
out if Medicare is primary or secondary
• Remember, if you are under 65, the number
of employees working at your company is
different than if 65 and older
– Must be 100 or more employees for
Medicare to be secondary. If less than 100,
then Medicare is primary
Make Medicare Work Coalition
Medicare Part A and Part B
Costs When You Begin Working
• Medicare costs can vary depending on
income or eligibility for other programs such
as Medicare and Medicare Savings Programs
• Costs may increase by introducing
employment income
• Some increased costs can be avoided by
careful planning
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
20
Useful Online Resources
• Medicare and Other Health Benefits: Your Guide to Who
Pays First
– http://www.medicare.gov/publications/pubs/pdf/02179.pdf
• Medicare Part D for People Who have Drug Coverage
Through an Employer and Union:
– http://www.medicare.gov/publications/pubs/pdf/11107.pdf
• Medicare and COBRA
– http://www.ssa.gov/disabilityresearch/wi/medicare.htm#cobra
• Department of Labor – COBRA FAQs
– http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html
Make Medicare Work Coalition
AgeOptions on behalf of the Make Medicare Work Coalition
21
Employer Insurance &
Medicare
Medicare Rights Center
The Medicare Rights Center is a national, notfor-profit consumer service organization that
works to ensure access to affordable health
care for older adults and people with
disabilities through:
Counseling and advocacy
Educational programs
Public policy initiatives
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
1
What we’ll cover today
Medicare basics
Eligibility and enrollment
Coordination of benefits between Medicare and:
Current employer coverage
Retiree plans
COBRA coverage
What to do when someone didn’t enroll in Medicare
at the right time
© 2012 Medicare Rights Center
Medicare Basics
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
2
Medicare
Health insurance for people 65 and older
and people with disabilities
People of all income levels eligible
Run by the government but can be provided
by private companies
Covers most medical services and
beneficiary needs
© 2012 Medicare Rights Center
Medicare and Medicaid
Both began in 1965 as part of President Johnson’s
“Great Society”
Older and low-income Americans were unable to buy
private health insurance
Social insurance = shared risk and social safety net
Medicare
Federal government program
Health care coverage for people 65 or older or have a
severe disability
Eligibility is not based on income
Medicaid
Different from Medicare
State and federal program
Eligibility based on income and usually assets
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
3
Parts of Medicare
Medicare benefits are administered through three parts
Part A – Hospital/Inpatient Benefits
Part B – Doctors/Outpatient Benefits
Part D – Prescription Drug Benefit
(Added 2006)
What happened to Part C?
Private health plans (HMOs, PPOs)
Way to get Parts A, B and D through one private plan
Not a separate benefit
Also called Medicare Advantage
© 2012 Medicare Rights Center
Medicare Part A and B Coverage
Part A
Inpatient hospital
Inpatient skilled nursing facility
Home health care
Hospice care
Part B
Doctor services
Preventive care
Durable medical equipment (DME)
Such as wheelchairs, walkers, oxygen tanks
Home health care
X-rays, lab, ambulance services
Therapy services (PT/OT/ST)
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
4
Medicare Part A and B Costs
Part A
No monthly premium for those with at least 10 years Social
Security work history
Hospital deductible and copays
Most people must take Part A when eligible
Part B
Monthly premium: $99.90 in 2012
Those with higher incomes ($85,000 individual;
$170,000 couple) pay more
Annual deductible and 20% coinsurance for most doctor
services
People may opt out of Part B when eligible
© 2012 Medicare Rights Center
Part B premium based on income
The monthly Part B premium is higher for individuals with
income above $85,000 per year ($170,000 for couples)
The income that counts is the adjusted gross income reported
on their IRS tax return 2 years ago plus other forms of taxexempt income
2012 monthly
Part B premium
Annual Income
Individuals
Couples
Equal to or below $85,000
Equal to or below
$170,000
$99.90
$85,001-$107,000
$170,001-$214,000
$139.90
$107,001-$160,000
$214,001-$320,000
$199.80
$160,001-$214,000
$320,001-$428,000
$259.70
Above $214,000
Above $428,000
$319.70
© 2011 Medicare Rights Center
©2012 Medicare Rights Center
5
Coordination of
Medicare Benefits
© 2012 Medicare Rights Center
Transitioning into Medicare
When becoming eligible for Medicare, it’s important to
understand how Medicare will work with current
insurance
Helps determine whether to take Medicare
Common scenarios:
People turn 65, are still working and have insurance from their
employer
People have insurance from a former job (retiree insurance,
COBRA)
Their current coverage may change when they become
eligible for Medicare, whether they take Medicare or not
Each type of insurance works with Medicare differently
(coordination of benefits). People should talk to their
employer or benefits administrator.
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
6
Coordination of benefits
Coordination of benefits is the sharing of costs
by two or more health plans
Depends on Medicare eligibility
Age
Disability
End-Stage Renal Disease (ESRD)
Coordination of benefits information in this presentation
doesn’t apply to those with ESRD
Depends on the plan size
© 2012 Medicare Rights Center
Important concepts
Group Health Plans (GHPs)
Enrollment Periods
Current employer
Former employer
Primary insurance
Secondary insurance
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
7
Medicare Eligibility
and Enrollment
© 2012 Medicare Rights Center
In this section
Types of Medicare eligibility
People who have aged into Medicare (65 and
older)
People who are eligible due to disability
People with End-Stage Renal Disease (ESRD)
People with Amyotrophic Lateral Sclerosis (ALS,
or Lou Gehrig’s Disease)
Medicare enrollment periods
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
8
Medicare eligibility – 65+
People qualify for Medicare when they turn 65
if they:
Collect or qualify to collect Social Security or
Railroad Retirement benefits
Or, if they don’t qualify for Social Security or
Railroad Retirement, they must be a current U.S.
resident and either:
A U.S. citizen
Or a permanent U.S. resident having lived in the U.S.
for 5 years in a row
© 2012 Medicare Rights Center
Medicare eligibility – under 65
People under 65 are eligible for Medicare if:
They’ve been getting Social Security Disability
Insurance (SSDI) or Railroad Disability Annuity
checks for total disability for at least 24 months
No waiting period with Lou Gehrig's Disease
Or, if they have End-Stage Renal Disease (kidney
failure) and have enough work history
Note: SSDI isn’t health insurance. It’s monthly payments
from the Social Security Administration to people who
can’t work because of severe medical impairment.
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
9
Four ways to enroll in Medicare
Automatic Enrollment
Initial Enrollment Period
General Enrollment Period
Special Enrollment Period
© 2012 Medicare Rights Center
Automatic enrollment
People are automatically enrolled in Parts A and B if:
They have enrolled to receive Social Security benefits before
turning 65
They have a disability and have been receiving SSDI for at
least 24 months
They get SSDI because they have ALS
They get a package in the mail 3 months before
coverage starts explaining how Medicare works
Explains the Part B premium
They get the option to decline Part B
Other people must actively enroll in Medicare
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
10
Initial Enrollment Period (IEP)
The first chance to enroll in Medicare
If someone isn’t automatically enrolled, can actively
sign up for Parts A, B and D
7-month period surrounding the month of
eligibility for Medicare, including the 3 months
before and the 3 months after their eligibility
month
The eligibility month is either a person’s 65th birthday
month or a person’s 25th month of SSDI
Enroll early for coverage to start the month they
become eligible
© 2012 Medicare Rights Center
General Enrollment Period (GEP)
If someone misses their IEP, they can sign up
for Medicare during the General Enrollment
Period
General Enrollment Period is Jan. 1 – Mar. 31
every year
Coverage starts July 1
People who wait to enroll during the GEP and
don’t have current employer insurance:
May have to pay a premium penalty for late
enrollment into Part B
May have gaps in coverage
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
11
Part B Special Enrollment Period (SEP)
Lets people enroll in Part B during these
times:
Any time while in a group health plan based on
their current employment or their spouse’s
And during the 8 months after employment ends or
the group health coverage ends, whichever comes
first
To qualify for an SEP, a person must meet
specific criteria
Use the form CMS 40-B (Application for
Enrollment in Medicare)
© 2012 Medicare Rights Center
SEP criteria
Two criteria to be eligible for the Part B Special
Enrollment Period:
1. Must have insurance from a current job (an
employer group health plan from their job or
their spouse’s job) or have had such insurance
within the past 8 months
2. Must have been continuously covered since
they became eligible for Medicare
Can have no more than 8 consecutive months of
lapses in either Medicare or current employer
coverage
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
12
Part A enrollment
Premium-free Part A: Most people take it when
eligible
If receiving Social Security benefits, they’ll be
automatically enrolled in Part A and can’t opt
out
People 65+ who qualify for premium-free Part A
but don’t have it can enroll any time
Up to 6 months retroactive coverage
People who must pay a premium for Part A can
enroll during their IEP or during the annual GEP
Premium penalty for delayed enrollment
© 2012 Medicare Rights Center
Case example
Mrs. P is 72 didn’t enroll in Part B because she has
insurance through her husband’s retiree plan. Next
month, this insurance will end. Will she be eligible for a
special enrollment period for Part B when the retiree
coverage ends?
a) Yes, because she had retiree coverage
b) Yes, because she is losing her insurance
c) No, because the coverage was through her husband’s
job, not her own
d) No, because her husband had retiree coverage and
this doesn’t qualify her for an SEP
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
13
Answer
D) No, because her husband had retiree coverage and
this doesn’t qualify her for an SEP
People are only eligible for an 8-month special enrollment
period for Part B if they have health insurance through
their or their spouse’s current job. Mrs. P can apply for
Medicare during the general enrollment period, but she
may have to wait for coverage and have to pay a Part B
premium penalty.
© 2012 Medicare Rights Center
Medicare and
Current Employer
Insurance
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
14
In this section
Group Health Plans
Large group health plans
Small group health plans
Other employer-based plans
Coordination of Medicare and current employer
plan benefits
Exceptions to group health plan rules
In this section, we talk only about Group Health
Plans from current employment (not retiree or
COBRA)
© 2012 Medicare Rights Center
Employer Group Health Plans
A Group Health Plan (GHP) is a plan in which
employers provide health benefits to current
and former employees
How Medicare coordinates with Group Health
Plans depends on the size of the plan
There are small and large GHPs
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
15
Small Group Health Plans
For small Group Health Plans, Medicare is primary,
GHP is secondary
What’s considered a small GHP?
Eligible for Medicare due to age
Small GHP is fewer than 20 employees at company where
beneficiary or spouse works
Eligible for Medicare due to disability
Small GHP is fewer than 100 employees at the company where
beneficiary or spouse works
© 2012 Medicare Rights Center
Small GHPs for 65+: Fewer than 20 employees
Medicare is primary and employer plan can act as
secondary
If a person has GHP from their or their spouse’s current
job, and the company has fewer than 20 employees,
they should usually enroll in Part B
Because Medicare is primary, they may have no health
coverage if they decline Part B
Neither Medicare nor the GHP may be required to pay
If GHP pays primary, it may not know the person is eligible for
Medicare
If GHP learns of Medicare eligibility, it can stop paying primary
and recoup payments
Part B SEP still applies
Medicare primary/secondary status doesn’t change this
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
16
Small GHPs for people with disabilities:
Fewer than 100 employees
Medicare is primary for those eligible for
Medicare due to disability and:
Are covered by a GHP (theirs, their spouse’s or
other family member’s) based on current
employment
There are less than 100 employees in their company
People with disabilities who receive Medicare and
are employed at a company with less than 100
employees should
Stay in Part B because it’s their primary insurer
They may be able to keep their GHP as secondary
© 2012 Medicare Rights Center
Fewer than 100 employees – cont.
After getting SSDI for 24 months, a person is
automatically enrolled in Part A and Part B
If they turn down Part B:
They’ll have no primary insurance for outpatient care
Neither Medicare nor the small GHP may be
required to pay for your doctors visits and other
medical services
Part B SEP may still apply
Only eligible for the SEP if health coverage is from
their or their spouse’s employer, not from another
family member
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
17
Exception
Small employers (fewer than 20 or 100) don’t
have to provide the same health insurance for
people eligible for Medicare
Employers who have small GHPs may choose
to keep paying primary after an employee
becomes eligible for Medicare
If employer agrees to pay primary, the
beneficiary may not need to enroll in Part B
Important: Get written confirmation from the employer
and GHP if they choose to pay primary when they
don’t have to
© 2012 Medicare Rights Center
Large Group Health Plans
For large Group Health Plans, GHP is primary,
Medicare is secondary
What’s considered a large GHP?
Eligible for Medicare due to age
A large GHP is 20 or more employees at company
where beneficiary or spouse works
Eligible for Medicare due to disability
A large GHP is 100 or more employees at the company
where beneficiary, spouse or other family member works
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
18
Large GHPs for 65+: 20 or more employees
GHP is primary
If person has GHP from their or their spouse’s
current job, and the company has 20 or more
employees, they don’t necessarily need to take
Part B
They get an SEP to enroll in Part B without
penalty any time while still working and for 8
months after they stop working or lose coverage
if they meet all the SEP criteria
Remember: Someone must be currently working
for this to apply
© 2012 Medicare Rights Center
Large GHPs for people with disabilities:
100 or more employees
GHP is primary for those eligible for Medicare
due to disability and:
Covered by a GHP (theirs, their spouse’s or other
family member’s) based on current employment
There are more than 100 employees
They don’t need to take Part B unless they’re
unsatisfied with current coverage
Part B SEP applies
Can enroll in Part B without penalty any time
while still working and for 8 months after retiring
or losing coverage
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
19
Exception: Coverage from a family member
Family member could be parent, child, domestic
partner
For those who qualify for Medicare due to a
disability:
Primary / secondary rules apply to coverage from a
family member’s job
Coverage from a family member may qualify the
person for a Part B Special Enrollment Period
Only if it’s a large employer (100+ employees)
For someone 65 or older, coverage from a
family member (other than spouse) isn’t
recognized
© 2012 Medicare Rights Center
Medicare as secondary
People can take Part B even if they have
primary coverage from an employer
If they take Part B, it pays as secondary insurer
If a person drops employer insurance, Medicare
Part B becomes primary if they’re enrolled in it
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
20
Coordination of benefits: Medicare and GHPs
Conditions
Primary
Secondary
65+ and currently working
Fewer than 20 employees*
Medicare
Employer
65 + and currently working
20 or more employees
Employer
Medicare
Disabled and currently working
100 or more employees
Employer
Medicare
Disabled and currently working
Fewer than 100 employees*
Medicare
Employer
* GHPs may choose to be primary regardless of eligibility for Medicare. Make
sure to get this in writing.
© 2012 Medicare Rights Center
How many employees are counted?
Check with the insurer and employer
(benefits administrator or human resources)
to find out how many employees are counted
as a part of the plan
Some employees may be off site
Sometimes companies with fewer
employees come together and create a
multi-employer plan
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
21
How other employer-based plans
coordinate with Medicare
Multi-employer group health plans
Some health plans (like union plans) are available to
multiple employers
The size of the largest employer within the multigroup plan determines the size of the plan for all
enrollees
Self-employed people
A plan is considered a Group Health Plan if it is
available to at least one other employee
GHPs for a self-employed people are often
secondary to Medicare, so recipients usually need
Parts A and B to pay primary
© 2012 Medicare Rights Center
How other employer-based plans
coordinate with Medicare –cont.
Health Savings Accounts (HSAs)
HSAs are accounts that let people to pay
medical bills with pre-tax dollars they set
aside
People with Medicare aren’t allowed to
contribute money to an HSA
If they do, they may be assessed tax penalties
But they can use money in their HSA
Can only contribute if not enrolled in Part
A or B
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
22
Disability Policies
Someone is usually considered currently employed
during their first 6 months on employer disability benefits
This is generally considered short-term disability
During this time:
The person isn’t incurring a Part B premium penalty
They still have an SEP if covered by the employer’s GHP
After 6 months on employer disability benefits, someone
should generally take Part B unless their employer
explicitly states their long-term disability policy doesn’t
require the beneficiary to take Part B
Get this information in writing
Note: Employer disability benefits are different from SSDI
© 2012 Medicare Rights Center
Recap: Should someone take Part B?
Whether a person should enroll in Part B
if they have current employer insurance
depends on:
How many employees work at their or their
spouse’s (or other family members’) company
If Medicare should be primary or secondary
Remember: There may be consequences to not
taking Part B when first eligible
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
23
Medicare and
Retiree Insurance
© 2012 Medicare Rights Center
In this section
Types of retiree insurance
Coordination of Medicare and retiree insurance
The information in the section applies to retirees with
coverage from a former job (where they’re no longer
working)
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
24
Medicare and retiree insurance
Retiree insurance is health insurance
employers provide to former employees who
have retired
Retiree insurance always pays secondary to
Medicare
© 2012 Medicare Rights Center
Retiree insurance – cont.
Many retiree plans require members to sign up
for Parts A and B to have full coverage
Although Medicare is primary, it may be
beneficial to keep retiree coverage as
secondary:
It can act as supplemental insurance and fill gaps in
Medicare coverage
It may cover services that Medicare doesn’t cover
(such as routine vision and/or dental)
Check with the HR department or benefits
administrator to find out how a retiree plan will
work with Medicare
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
25
Should a person with retiree insurance take Part B?
Yes, because retiree coverage is secondary
If retiree plan is paying primary, it may be because it’s
not aware of the person’s Medicare eligibility
It can stop paying primary at any time and recoup
primary payments it made in error
Without Part B, the beneficiary has no primary
health coverage
Exception: Federal Employee Health Benefits
To avoid a premium penalty, a person must take
Part B within 8 months of retiring
During their Part B SEP
© 2012 Medicare Rights Center
Other types of retiree insurance
TRICARE for Life
For military retirees and dependants
Must take Medicare (Medicare is primary)
Other types of TRICARE work differently with
Medicare
Department of Veterans Affairs (VA) benefits
Can have both Medicare and VA, but they don’t
coordinate
VA only covers care at VA facilities; Medicare pays
for care at other facilities
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
26
Other types of retiree insurance- cont.
Federal Employee Health Benefits Program
Different types of plans (HMOs, fee-for-service)
Medicare is primary for those who take Medicare
FEHB pays primary for those who don’t take
Medicare
Depending upon their plan, some persons
choose to turn down Part B
However, Part B premium penalty applies for
delayed enrollment
© 2012 Medicare Rights Center
Medicare and COBRA
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
27
In this section
How COBRA coverage works
Coordination of Medicare and COBRA
coverage
Can a person with Part B also have COBRA
coverage?
© 2012 Medicare Rights Center
COBRA
COBRA stands for Consolidated Omnibus
Budget Reconciliation Act
COBRA is a federal law that lets certain
employees, their spouses and their dependents
keep Group Health Plan coverage for 18 to 36
months after they leave a job or lose coverage
for certain other reasons, as long as they pay
the full cost of the premium
COBRA only applies to large employers (20 or
more employees)
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
28
Medicare and COBRA
COBRA is always secondary to Medicare
COBRA is not health insurance from a current
employer
It doesn’t qualify someone for a Part B SEP
Someone with COBRA should enroll in Part B within
8 months of losing their current employer GHP
If a person doesn’t enroll within 8 months, they’ll
most likely have to pay a premium penalty for late
enrollment and have to wait until the General
Enrollment Period (Jan. 1 – Mar. 31) to enroll
© 2012 Medicare Rights Center
Should a person with COBRA take Part B?
Yes – Medicare is primary
If a person has COBRA and Part A, COBRA may recoup
payments if the person doesn’t have Part B, since Medicare
should be primary
People won’t have a Part B premium penalty if they enroll within 8
months after they stop working (during SEP)
Whether someone can have both COBRA and Medicare
depends on which they had first
If someone has COBRA first and enrolls in Medicare, COBRA can
end. Their spouse and dependants may be able to stay on
COBRA for up to 36 months.
If someone has Medicare first, they can sign up for COBRA and
have both; COBRA will be secondary
COBRA premiums are expensive
It’s often more cost effective to enroll in Medicare with Medigap
and Part D after losing employer coverage
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
29
Case example
Mr. W has Medicare and recently became
eligible for COBRA. Mr. W enrolled in COBRA.
Which insurance is Mr. W’s primary
insurance?
1. COBRA
2. Medicare
© 2012 Medicare Rights Center
Answer
2.) Medicare is Mr. W’s primary insurance.
COBRA is always secondary to Medicare.
Since Mr. W has both COBRA and Medicare,
Medicare will pay first on any claims and
COBRA will pay second.
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
30
When Someone Didn’t
Enroll at the Right Time
© 2012 Medicare Rights Center
In this section
Consequences of not enrolling in Part B
at the right time
What someone can do if they didn’t enroll
on time
What people should do if they want to
decline Part B
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
31
Consequences of not enrolling
People who don’t enroll in Part B when they
should may face these problems:
Premium penalties
Their existing coverage may not pay for care
May have to pay the full cost of health care they get
A plan may recoup payments it paid when Medicare
should have
Someone may have to wait until the next
General Enrollment Period to enroll in Part B
which will delay their Medicare coverage
© 2012 Medicare Rights Center
Premium penalties
10% Part B premium penalty for each 12-month period
that someone delayed enrollment in Part B when they
didn’t have insurance through a current employer
Penalty is in addition to the monthly Part B premium
Part B premium is $99.90 in 2012
Goes up when the Part B premium goes up
Must be paid every month as long as the person has
Medicare
The premium penalty is erased when….
Medicare eligibility changes (for example, when a disabled
beneficiary turns 65 and becomes eligible due to age)
Someone enrolls in a Medicare Savings Program (MSP)
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
32
What to do when someone didn’t enroll
When Medicare is primary and the person
didn’t enroll:
Enroll in Part B as soon as possible
Find out if they’re eligible for an SEP
If not, enroll in Medicare during the next General
Enrollment Period (Jan. 1- Mar. 31 of every year
with coverage beginning July 1 of that year)
© 2012 Medicare Rights Center
Other strategies
Equitable Relief
Federal law lets people request “relief” from the Social
Security Administration in the form of immediate or
retroactive Medicare enrollment and/or elimination of Part B
premium penalty
Must show failure to enroll was “unintentional, inadvertent,
or erroneous” and the result of “error, misrepresentation, or
inaction of a Federal employee or any person authorized by
the Federal government to act in its behalf”
Medicare Savings Programs (MSPs)
Let people to enroll in Part B outside of the GEP and erase
premium penalties
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
33
If someone wants to decline Part B
Some people can decline Part B without penalty
People thinking about declining Part B should:
Talk to the Social Security Administration about the
consequences of turning down Part B
Talk with their insurer and employer to confirm that
their plan will pay primary to Medicare. Get it in
writing.
Keep a record of these calls (date, time,
representative name, information relayed)
© 2012 Medicare Rights Center
For more information and help
Local State Health Insurance Assistance Program
(SHIP)
Medicare
800-MEDICARE (800-633-4227)
Medicare Coordination of Benefits Contractor: 800-999-1118
www.medicare.gov
Social Security Administration
800-772-1213
Medicare Rights Center
800-333-4114
Medicare Interactive (See next slide)
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
34
Medicare Interactive
Medicare Interactive
www.medicareinteractive.org
Web based information system developed by Medicare
Rights to be used as a counseling tool to help people
with Medicare.
Easy to navigate
Clear, simple language
Answers to Medicare questions and questions about related
topics, for example:
“How do I choose between a Medicare private health plan
(HMO, PPO or PFFS) and Original Medicare?”
State-specific information for all 50 states. (Find what
programs each state offers and their income and asset limits.)
© 2012 Medicare Rights Center
Medicare Rights University (MRU)
Medicare Rights University
www.medicarerightsuniversity.org
Online resource for both people with Medicare
and professionals
Based on the research of Medicare Rights experts
Both written presentations and webinars
Covers a variety of Medicare topics
Easy to navigate
Subscription based
Register for monthly, bi-annual or yearly subscriptions to MRU
Please contact Scarlet Watts (swatts@medicarerights.org) for more
information about subscribing
Please visit MRU for a look inside our course offerings!
© 2012 Medicare Rights Center
©2012 Medicare Rights Center
35
Section 2:
Q&A’s
General Medicare Questions
Q: Do I have to apply for Medicare or do I get it automatically?
A: If you are already collecting some form of Social Security (either retirement benefits or
disability benefits) when you become eligible for Medicare, you will be automatically enrolled
in both Part A and Part B. You become eligible for Medicare when you turn 65 or have been
collecting Social Security Disability for 24 months.
If you are not collecting Social Security when you become eligible for Medicare, you must
enroll through Social Security. You can do this online, over the phone or in person at your
local Social Security office. Call 800-772-1213 to sign up for Parts A and B of Medicare or to
find the location of your local Social Security office.
If you want Medicare Part D prescription drug coverage, you must actively enroll in it yourself.
This is true whether you are automatically enrolled in Medicare or you have enrolled yourself.
Keep in mind that people with Lou Gehrig’s disease (ALS) or End-Stage Renal Disease
(ESRD) do not have to collect Social Security Disability benefits for 24 months to qualify for
Medicare.
Q: Do I have to pay for Medicare?
A: Part A is free if you or your spouse has worked and paid taxes to Medicare for at least 40
quarters (10 years). If you do not have enough working quarters, you will have to pay a
premium for Part A. Part B always has monthly premium. If you have a Medigap or Part D
plan you may have pay a monthly premium for these as well. Keep in mind that Medicare
Advantage (MA) plans have different costs than Original Medicare. If you have a low income,
you may qualify for programs that can help pay your Medicare premiums and other costs.
Q: Do I need both Parts A and B?
A: Whether you need Medicare Part A and Part B depends on whether Medicare will be your
primary or secondary insurer. Part A is hospital insurance and Part B is medical insurance. If
your current employer insurance is primary, you do not need either Part A or Part B.
However, most people choose to take Part A because it is free for them. If your Medicare is
primary because, for example, you have retiree insurance or COBRA coverage you need
both Part A and Part B.
General Medicare Q & A
Page 1 of 4
Q: When can I apply for Medicare?
A: You can apply for Medicare during your Initial Enrollment Period (IEP). The IEP is the
seven months surrounding your 65th birthday. It includes the three months before you turn 65,
the month you turn 65, and the three months after. If you have current employer insurance,
you can also sign up while you are still working and for up to eight months after you stop
working or you lose your coverage. This is window of time is called the Part B Special
Enrollment Period (SEP).
If you do not enroll during these times, you can enroll during the General Enrollment Period
(GEP), which is January 1 through March 31 of every year. Your coverage will start July 1 of
the year you enroll. You may face a late enrollment penalty if you were eligible for Part B
before you enrolled during the GEP. If you have been receiving Social Security Disability
Insurance (SSDI) for 24 months, then you are automatically enrolled in Medicare in the 25 th
month you receive SSDI.
Q: Do I receive a notice about Medicare when I turn 65?
A: If you are already receiving Social Security benefits, you will get information about
Medicare in the mail three months before you turn 65. If you are not receiving Social Security
benefits, you must actively enroll in Medicare yourself by contacting your local Social Security
office. You will not receive a notice in the mail letting you know that you are eligible for
Medicare.
Q: If I wait to take Part B, will I face a penalty?
A: You will have to pay a monthly Part B late enrollment penalty if you do not sign up for Part
B when you first become eligible for Medicare or during a Special Enrollment Period (SEP). If
you do have insurance from a current employer, you must enroll within eight months of
retiring or losing coverage, or you will have to pay a penalty.
Q: Will money be taken out of my Social Security check for Medicare?
A: Part A is free for most people. You only have to pay a premium for Part A if you or your
spouse have not worked and contributed to Social Security for 40 work quarters (10 years).
Most people pay a monthly premium for Part B. You can either write a check to Social
Security or have the Part B premium automatically taken out of your Social Security check. If
you have a Medicare Savings Program (MSP) that pays your Part B premium, your state
pays the premium and it should not be deducted from your Social Security check.
General Medicare Q & A
Page 2 of 4
Q: How do I pay for Medicare if it is not automatically taken out of my Social
Security check?
A: If your Part B premium is not automatically taken out of your Social Security check, you
can mail a check to your local Social Security office. However, it is a good idea to have your
Part B premium taken out of your Social Security check automatically.
Q: I’m thinking of not taking Part B. Who do I need to talk to?
A: Before making any decisions about enrolling in or opting out of Part B, talk to the Social
Security Administration. You may not have any medical coverage if you do not have other
primary insurance. If you do have another form of health insurance, contact the plan’s
benefits administrator to find out how that plan works with Medicare. Then, contact Social
Security to confirm the plan’s guidance. Make sure keep detailed notes of who you spoke
with, when, and what they told you.
Q: My income is low. Are there programs that can help me afford my Medicare
premiums?
A: Yes. Every state has Medicare Savings Programs (MSPs) that can help pay your Part B
premium. A Medicare Savings Program may also pay Medicare copays and deductibles. You
can also see if you are eligible for Extra Help. Extra Help is a federal program that can help
pay your Part D prescription drug costs.
Q: Is there additional insurance I can buy to pay for the deductibles and
coinsurance that Medicare does not pay for?
A: Yes. Supplemental insurance called Medigap policies can help pay for your Medicare
copays and deductibles. Medigap policies only work with Original Medicare. You can only buy
Medigap policies at certain times in some states. Check with your state insurance department
to find out when you have the right to buy a Medigap plan.
Q: I’m 65, but my spouse is 60. Can my spouse get Medicare, too?
A: Your spouse cannot get Medicare based on your eligibility. To qualify for Medicare, an
individual must be:
age 65,
or have received Social Security Disability Insurance (SSDI) for 24 months,
or have End-Stage Renal Disease (ESRD),
or have ALS (Lou Gehrig’s disease).
General Medicare Q & A
Page 3 of 4
Q: I’m 63 and I just lost my job. Can I get Medicare early?
A: Unlike Social Security retirement benefits, you cannot take Medicare early. Unless you
have been receiving Social Security Disability Insurance benefits (SSDI) for 24 months or
have ESRD or ALS, you must wait until you are 65 to receive Medicare.
General Medicare Q & A
Page 4 of 4
Medicare and Current Employer Benefits
Q: I work for a small employer. Do I need Medicare?
A: If you work for a small employer with fewer than 20 employees (fewer than 100 employees
if you are under 65 and disabled) and become eligible for Medicare, you should take
Medicare. This is because Medicare will be your primary insurance once you become eligible.
If you do not take Medicare, it will be as if you do not have any coverage.
If you are part of a high-deductible health plan and have a Health Savings Account (HSA) to
pay for medical expenses, you can no longer contribute to your HSA if you enroll in Medicare
Part A and/or B. You may, however, continue withdrawing money from your HSA after you
enroll in Medicare to pay medical expenses.
Q: I work for a large employer. Do I need Medicare?
A: If you are currently working at a company with 20 or more employees (100 employees or
more if you are under 65 and disabled), then you can wait to sign up for Part B. This is
because your employer insurance will still be your primary payer. You will be given a Special
Enrollment Period (SEP) to enroll in Part B without penalty while you’re still working and for
up to eight months after you retire or lose your current employer coverage. It’s important to
enroll early so you do not have any periods of time without coverage.
Q: I’m self-employed. Do I need Medicare?
A: If you are self-employed and have an individual policy, then you should take Medicare.
Keep in mind that if you have dependents that are being covered by your individual policy
that are not eligible for Medicare, dropping your policy may affect their benefits.
If you are self-employed and have insurance through a group health plan, then whether you
need Medicare depends on the size of your group health plan. If your insurance is through a
group health plan with 20 or more employees (100 employees or more if you are disabled),
then you can wait to sign up for Part B because this insurance is primary to Medicare.
If your insurance is through a group health plan with fewer than 20 employees (fewer than
100 employees if you are disabled), then this insurance is secondary to Medicare. In this
situation, you should not wait to sign up for Medicare because if you do not take Medicare it
will be as if you have no insurance at all.
If you are in a group health plan that is part of a multi-employer plan or association, such as
the National Association for the Self-Employed, that offers group health plans to its members,
then the size of the largest employer within the multi-employer plan determines whether that
insurance is primary or secondary to Medicare.
Medicare and Current Employer Benefits Q&A
Page 1 of 3
Q: Can I drop Medicare if I go back to work?
A: As long you are currently, working you can drop Medicare. However, if there are fewer
than 20 employees within your company, Medicare will still be your primary insurer and you
should not drop it. In this case, not having Medicare is like having no coverage at all.
Q: What happens if I drop my employer insurance?
A: If you choose to drop your current employer insurance and you already have Medicare,
Medicare will become your primary insurance. If you do not have Medicare and drop your
employer insurance, enroll in Part B before your employer coverage ends to avoid any gaps
in your coverage.
Q: When is my employer insurance primary?
A: If you are 65 or older, your employer insurance is primary (pays first) if it is from your or
your spouse’s current job at a company with 20 or more employees.
If you qualify for Medicare because of a disability and have insurance through your employer
or a spouse or family member’s employer, your employer insurance is primary if the company
has 100 or more employees.
Q: When is Medicare primary?
A: Medicare is primary if you have COBRA or retiree insurance. Medicare is also primary if
you are 65 or older and there are fewer than 20 employees (fewer than 100 employees if you
are receiving SSDI) at the company where you currently work.
Q: How will my employer-based coverage change when I turn 65?
A: If you are still working when you turn 65, your employer insurance may look the same but
function differently. If you work at a company with fewer than 20 employees, your employer
insurance will become secondary and Medicare becomes your primary insurance, whether
you are enrolled in it or not.
If Medicare is primary and you do not sign up for it, it is as if you do not have any insurance. If
you work at a company with 20 or more employees (100 or more employees if you are under
65 receiving SSDI), then your employer insurance is primary and you can delay enrolling in
Medicare.
If you are retired, your retiree insurance will be secondary to Medicare.
Q: I have a high income. Will my Medicare premiums cost more?
Medicare and Current Employer Benefits Q&A
Page 2 of 3
A: If you are a single person with an annual income above $85,000 ($170,000 for a married
couple), you must pay a higher monthly Part B premium than the standard amount. If you
have a Part D plan, you will also pay more than the plan’s standard premium.
Q: I have drug coverage from an employer. Do I need a Part D prescription drug
plan?
A: If you have drug coverage from an employer or union, and it is creditable drug coverage,
you do not have to enroll in Part D when you first become eligible for Medicare. Creditable
drug coverage is drug coverage that is at least as good as a basic Part D prescription drug
plan.
If you have creditable drug coverage from an employer or union, you have a Special
Enrollment Period to enroll in Part D later without a penalty if you lose that coverage or
decide to drop it. You can use this Special Enrollment Period to enroll in a Part D plan at any
time while you have drug coverage from your employer or union and for up to two months
after you lose coverage. You should get a letter from your current drug plan every year
stating that the drug plan is creditable.
It’s important to know that for Medicare purposes, the term “creditable” only applies to drug
coverage, not health coverage. Having creditable coverage does not give someone a Special
Enrollment Period to enroll in Part B. Having current employer insurance is the only way to
get a Part B Special Enrollment Period.
Q: Can I have drug coverage from both my employer and Part D?
A: It depends. Some employer plans work with Part D while others do not. It is important to
talk to your employer to find out whether your drug plan works with Medicare Part D. In some
cases, if you sign up for a Part D prescription drug plan and it does not work with your
employer-based plan, you and your dependents may lose your employer-based health and
drug coverage.
Medicare and Current Employer Benefits Q&A
Page 3 of 3
Medicare and Retiree Benefits
Q: I have retiree insurance. Do I need Medicare?
A: Yes. Retiree insurance is always secondary to Medicare. This means that it only pays
after Medicare pays. If you do not take Medicare Part A and Part B when you become eligible
for it, it will be as if you have no insurance. Since each retiree plan is different, you should
contact your plan’s benefits administrator to find out about your plan’s out-of-pocket costs
and the services it covers.
Q: I have Medicare. Do I need to keep my retiree insurance?
A: Whether you keep your retiree insurance is up to you. Retiree insurance can act as
supplemental insurance to Medicare. This means that it may pay out-of-pocket costs that
Medicare does not pay for. It may also cover things that Medicare does not cover such as
routine vision or dental care. Remember, you are responsible for paying your Medicare
premiums as well as your retiree plan’s premiums.
Q: How will my employer-based coverage change when I turn 65?
A: If you are still working when you turn 65, your employer insurance may look the same but
it might function differently. If you work at a company with fewer than 20 employees, your
employer insurance will become secondary and Medicare becomes your primary insurance.
If Medicare is primary and you do not sign up for it, it is as if you do not have any insurance. If
you work at a company with 20 or more employees (100 or more employees if you are
disabled) then your employer insurance is primary and you can delay enrolling in Medicare.
If you are retired, your retiree insurance will be secondary to Medicare.
Q: I have creditable drug coverage. Do I need a Part D prescription drug plan?
A: If you have creditable drug coverage, you do not have to enroll in Part D when you first
become eligible for Medicare. Creditable drug coverage is drug coverage that is at least as
good as a basic Part D prescription drug plan.
If you have creditable drug coverage, you have a Special Enrollment Period to enroll in Part
D later without a penalty if you lose your creditable drug coverage. This Special Enrollment
Period lasts 63 days and begins on the first day you lose your coverage. You should get a
letter from your current drug plan every year stating that the drug plan is creditable.
Medicare and Retiree Benefits Q & A
Page 1 of 2
Q: I lost my creditable drug coverage. What can I do?
A: You should enroll in a Part D prescription drug plan right away to avoid facing a penalty or
gaps in coverage. To avoid a penalty, you must enroll within 63 days of losing your creditable
coverage.
Q: My retiree plan is a Medicare Advantage plan. Do I need to do anything else
to sign up for Medicare?
A: If you are automatically enrolled in a Medicare Advantage plan through your retiree plan,
you should have Part A and Part B. You do not have to do anything else to sign up for
Medicare.
You should check to see if your Medicare Advantage plan has drug coverage. If not, see if
you can sign up for a stand-alone Part D plan.
Q: My retiree plan is a Medicare Advantage plan, do I have to keep it?
A: If your retiree plan is a Medicare Advantage plan, you can drop it. However, you should be
careful. If you drop retiree coverage, you may not be able to get it back. If you have
dependents that are being covered by your retiree coverage but are not eligible for Medicare,
dropping your Medicare Advantage plan may affect their benefits.
Medicare and Retiree Benefits Q & A
Page 2 of 2
Medicare and COBRA
Q: I have COBRA. Do I need Medicare?
A: Yes. COBRA is always secondary to Medicare. This means that it only pays after
Medicare pays. If you do not enroll in Medicare when you become eligible for it, it will be as if
you have no insurance.
If you have Medicare first and then become eligible for COBRA, you can enroll in COBRA. If
you have COBRA first and then become eligible for Medicare, COBRA will not usually
continue your benefits. You should enroll in Medicare as soon as you are eligible.
If you have COBRA drug coverage and want to keep it, find out if that coverage is creditable,
meaning that it is at least as good as the Medicare Part D drug benefit. You should get a
letter from the company providing your COBRA letting you know whether your drug coverage
is creditable. If it is creditable, you may be able to keep your COBRA drug coverage and
delay enrolling in Part D. You will get a Special Enrollment Period to enroll in Part D when
your creditable coverage ends. You also won’t have to pay a premium penalty for delayed
Part D enrollment as long as you enroll within 63 days of losing creditable coverage.
Q: Can I have both COBRA and Medicare?
A: Whether you can have COBRA and Medicare depends on which one you had first. If you
have COBRA and then become eligible for Medicare, your COBRA may end. If you have
Medicare and then become eligible for COBRA, you can sign up for COBRA insurance and it
will be secondary to Medicare.
If you have COBRA and Medicare, you should consider whether continuing with COBRA is
worth the expense.
If you have dependents covered by your COBRA plan you should consider how their
coverage will be affected if you lose or drop your COBRA.
Q: When is Medicare primary?
A: Medicare is primary if you have COBRA or retiree insurance. Medicare is also primary if
there are fewer than 20 employees (100 employees if you are receiving SSDI) at the
company where you currently work.
Medicare and COBRA Q & A
Page 1 of 2
Q: I lost my creditable drug coverage. What can I do?
A: You should enroll in a Part D prescription drug plan right away to avoid facing a penalty or
gaps in coverage. To avoid a penalty, you must enroll within 63 days of losing your creditable
coverage.
Medicare and COBRA Q & A
Page 2 of 2
Section 3:
Scenarios
How Medicare and Retiree Insurance
Work Together
I am 64 years old and just retired. I will be eligible for
Medicare in a few months. My former employer has
offered me retiree coverage. How does retiree
coverage work with Medicare?
~ Mr. Rouge
Dear Mr. Rouge,
Every plan is different so you should check with your benefits coordinator to see how your
retiree coverage will work with your Medicare. Regardless of your retiree insurance, you must
make sure to enroll in Medicare Parts A and B because Medicare will always pay first after
you retire (called primary insurance) and your retiree plan will pay second (called secondary
insurance). Your employer is not required to offer you the same coverage as when you were
working so your benefits and premiums may change. Retiree insurance can be good to keep
because it may help pay for some of your out-of-pocket costs and for services that Medicare
does not cover, such as vision or dental care.
It may also be a good idea to compare what your out-of- pocket costs will be with Medicare
and your retiree plan as opposed to Original Medicare with a Medicare supplement (Medigap)
policy. Keep in mind that when you enroll in Medicare Part B, you also trigger your open
enrollment period to buy a Medigap policy. Medicare does not pay the full cost for most
services it covers. Medigap insurance helps pay the costs of covered services that are not
paid in full by Medicare. Your Medigap open enrollment period lasts for six months from the
date you enroll in Part B and allows you to purchase a policy regardless of any health
problems you may have and without paying a higher premium for the policy.
Sometimes your retiree insurance provider will convert your coverage into a Medicare
Advantage plan, a type of managed care (like an HMO or PPO). In this case, in order to
receive your retiree benefits, you would need to be in this plan, rather than stay in Original
Medicare.
If you choose to drop your retiree insurance, you may not be able to get it back. If you have
dependents that are also covered by this plan, you should check with your former employer
to find out how this decision may impact your dependents.
If your retiree insurance includes prescription drug coverage, make sure to ask if it is
“creditable coverage.” Your plan is required to send you a notice every year stating whether it
is creditable. Creditable coverage means that your insurance is as good as or better than
coverage through Medicare Part D. If it is creditable, you can continue to use your retiree
Medicare and Retiree Insurance Scenario
Page 1 of 2
plan without paying a penalty if you decide to enroll in a Medicare Part D prescription drug
plan in the future.
If your drug coverage through your former job is no longer offered, you will receive a special
enrollment period that lasts 63 days from the date your coverage ends to choose and enroll in
a Medicare Part D plan. In order to avoid paying a penalty (higher premium), make sure not
to go longer than 63 days without enrolling in a plan or some other kind of creditable
coverage.
These coverage rules may be different if you have another type of government insurance
such as veterans (VA) insurance or federal employee health benefits.
Here is where you can go for additional information or if you need help:
Medicare: 800-MEDICARE (800-633-4227) or TTY 877-486-2048
Social Security Administration: 800-772-1213 or TTY 800-325-0778
Online Resources:
Medicare Part D for People Who Have Drug Coverage Through an Employer or Union:
http://www.medicare.gov/Publications/pubs/pdf/11107.pdf
Who Pays First: http://www.medicare.gov/publications/pubs/pdf/02179.pdf
Medicare and Retiree Insurance Scenario
Page 2 of 2
How Medicare and Insurance Through Your
Current Job Work Together
I am 64 years old and have insurance coverage through my job. I
will be eligible for Medicare in six months but do not plan to retire
for a few more years. I am not sure how Medicare will work with
the insurance I receive through my job. I know that I am eligible
for Part A and Part B but I heard if I enroll in Medicare Part B, I will
have to pay a monthly premium. I have a lot of questions and am
not sure what to do. Can I wait to enroll in Medicare since I have
insurance through current my job?
~ Mrs. Green
Dear Mrs. Green,
First, you need to contact the benefits administrator at your job to find out how your insurance
through your current job works with Medicare. This person may be in your company’s
Human Resources department or at the insurance company. Most people enroll in Part A
when they are first eligible for Medicare because there is no premium for Part A if you have
worked and contributed to Social Security for at least 10 years. However, when you should
enroll in Part B depends in large part on how many employees work for your employer.
Please note, your employer’s insurance may look exactly the same after you turn 65, but
because you’re eligible for Medicare it may work differently.
In most cases, if your employer has less than 20 employees, when you turn 65 Medicare
will become your primary insurer and your employer’s health plan becomes secondary. This
means Medicare pays first and your employer pays second. If this is the case, you will need
to enroll in Medicare Parts A and B to make sure all your health care bills are covered.
If your company has 20 or more employees, your employer pays first and Medicare pays
second. You should enroll in Part A if it is premium-free for you, but you can delay enrolling in
Part B and take it when you quit working or your employer no longer offers you insurance
coverage. When this happens, you will receive what is called a “special enrollment period” to
enroll in Part B. This special enrollment period lasts while you’re still working and for up to
eight months after your coverage through your job ends or you stop working – whichever
happens first. If possible, it is best to enroll in Part B before you stop working to avoid gaps in
coverage. You will not have to pay a Part B late enrollment penalty if you enroll in Part B
during your special enrollment period.
If you are considering declining or delaying enrollment into Part B, you should also contact
the Social Security Administration to be sure you understand and are following the rules. It is
a good idea to keep a detailed record of who you spoke to at Social Security and what they
Medicare and Current Employer Coverage Scenario
Page 1 of 2
told you in case there are any issues with your benefits in the future. If you have delayed
enrolling in Part B, when your current employer insurance ends, you must sign up for Part B
during the special enrollment period to avoid paying a late enrollment penalty (higher monthly
premiums for life). In addition, if you miss your special enrollment period, you may only be
allowed to enroll during the General Enrollment Period from January through March, and your
Medicare Part B coverage will not begin for several months.
If your insurance through your job offers prescription drug coverage then you also want to
ask your plan’s benefits administrator if your prescription drug coverage is considered
“creditable.” Creditable coverage means that your insurance is as good as or better than
prescription drug coverage through Medicare Part D. If your drug plan is creditable, you may
keep your employer’s drug plan without paying a penalty if you decide to enroll in a Part D
plan at a later time. You should receive a notice from your drug plan every year stating that it
is creditable.
When your drug coverage through your current job is no longer offered, you will receive a
special enrollment period that lasts 63 days to enroll in a Medicare Part D prescription drug
plan. It is best to enroll early to avoid gaps in coverage. In order to avoid paying a penalty,
make sure not to go longer than 63 days without enrolling in a Part D plan or some other kind
of creditable coverage.
Here is where you can go for additional information or if you need help:
Medicare: 800-MEDICARE (800-633-4227) or TTY 877-486-2048
Social Security Administration: 800-772-1213 or TTY 800-325-0778
Online Resources:
Medicare Part D for People Who Have Drug Coverage Through an Employer or Union:
http://www.medicare.gov/Publications/pubs/pdf/11107.pdf
Who Pays First - http://www.medicare.gov/publications/pubs/pdf/02179.pdf
Medicare and Current Employer Coverage Scenario
Page 2 of 2
Medicare and COBRA Insurance
I recently lost my job and my employer offered me COBRA
coverage. I will also be eligible for Medicare soon and would
like to know, how do Medicare and COBRA work together?
~ Mr. Elliott
Dear Mr. Elliott,
COBRA, the Consolidated Omnibus Budget Reconciliation Act, is a federal law. COBRA provides people
with the option of staying on their employer’s group health plan (GHP) for a limited time after their
employment ends. This is usually for 18 months but may last up to 36 months. COBRA coverage can be
expensive and costs more than what you were paying for health coverage before your employment
ended. How Medicare and COBRA work together depends on which type of coverage you have first.
If you have Medicare first and then become eligible for COBRA, you can have both Medicare and
COBRA. It is important to remember that Medicare pays first and COBRA pays second. So, you do not
want to drop your Medicare – without Medicare you have no primary insurance, which is essentially like
having no insurance at all. After Medicare pays, COBRA may cover some or all of what Medicare does
not pay.
Whether you should take COBRA depends on the type of coverage you want and can afford. Your
COBRA coverage may include extra benefits that are not covered by Medicare, like coverage for routine
dental care or eyeglasses. You have two options:
1. You can enroll in COBRA and keep your Medicare coverage. If you choose to do this, you will be
responsible for paying both your Medicare Part B and COBRA monthly premiums.
2. You can decide to turn down COBRA and only have Medicare coverage. If you have dependents
that are covered by your COBRA, make sure you talk to your benefits coordinator before turning
down COBRA to see how this will impact your dependents.
If you only had Medicare Part A (not Part B) while you were working, make sure to enroll in Medicare
Part B, even if your employer is offering you COBRA. You have up to eight months after your
employment ends to enroll in Part B. However, it is best to plan ahead and enroll in Part B while you are
still working so that your coverage starts by the time your employment ends. When your employment
ends, Medicare becomes your primary insurance. If you wait to enroll in Part B until after your COBRA
ends, you may not be able to get coverage right away and you may have to pay a late enrollment
penalty.
When you enroll in Medicare Part B, you also trigger your Medigap open enrollment rights. Medigap
policies are Medicare supplemental insurance plans that help pay your out-of-pocket costs (like
coinsurances and deductibles) under Original Medicare. Your Medigap open enrollment period lasts six
months from the date you enroll in Part B.
Medicare and COBRA Insurance Scenario
Page 1 of 2
It lets you buy any Medigap policy regardless of any health problems you may have, without paying more
for the policy. You will pay a monthly premium for any Medigap policy you buy. Compare the benefits and
costs of having a Medigap policy to COBRA to see which is a better value for you.
If you have COBRA first and then become eligible for Medicare, your COBRA coverage may end. Since
you will not be fully covered with COBRA you should enroll in Medicare Part A and Part B when you are
first eligible to avoid a late enrollment penalty.
However, you may be allowed to keep your COBRA coverage if it is offered to you and you wish to use it
for extra benefits like prescription drug or dental coverage. Ask your employer if your prescription drug
coverage under COBRA is considered “creditable.” Creditable coverage is drug coverage that is as good
as or better than Medicare’s prescription drug coverage. If you keep COBRA drug coverage and it is
creditable, you may delay enrolling into Medicare Part D drug plan until your COBRA ends. You will not
have to pay a Part D late enrollment penalty, as long as you enroll within 63 days of losing your drug
coverage. If it is not creditable, consider enrolling in a Part D drug plan. Contact your former employer to
find out whether enrolling in Part D will affect your other benefits.
If your family members have COBRA through your former employer’s plan, they may be able to continue
their COBRA coverage for a period of time, even after your COBRA coverage ends when you become
eligible for Medicare.
Please note the rules are different if you qualify for Medicare due to End-Stage Renal Disease (ESRD).
Please visit www.Medicare.gov for information about enrolling in Part B if you have ESRD.
Here is where you can go for additional information or if you need help:
Medicare: 800-MEDICARE (800-633-4227) or TTY 877-486-2048
Department of Labor: 866-487-2365 or TTY 877-889-5627
Online Resources:
Who Pays First - http://www.medicare.gov/publications/pubs/pdf/02179.pdf
Medicare and COBRA - http://www.ssa.gov/disabilityresearch/wi/medicare.htm#cobra
United States Department of Labor - http://www.dol.gov/ebsa/faqs/faq-consumer-cobra.html
Medicare and COBRA Insurance Scenario
Page 2 of 2
Medicare and Employer Group Health Insurance
for People with Disabilities Under 65
I am 50 years old and just became eligible for Medicare Part A
and Part B due to a disability. I have insurance through my current
employer. Do I need to keep my Medicare or can I drop it?
~ Mr. James
Dear Mr. James,
The enrollment rules for people under 65 years old who are eligible for Medicare due to a disability
are different from the enrollment rules for people who are 65 and over. As you know, if you’ve been
receiving Social Security Disability Insurance (SSDI) for 24 months you will be automatically enrolled
in Medicare Parts A and B. You should have received a package in the mail from Medicare three
months before your Medicare started. Most people take Part A since it is generally free (no premium).
However, there is a monthly premium for Part B. Some people choose to turn down Part B because
they have primary insurance from a current employer.
If your current employer has 100 or more employees, your insurance is called a large group health
plan and your health plan pays first. This means that your employer group health plan is the primary
payer. If you choose to keep Medicare, Medicare will pay after your employer’s insurance. Many
people with large group health plans turn down Medicare Part B because they are adequately covered
under their employer’s insurance.
The best way to find out how your health coverage will work with Medicare is to contact the benefits
administrator for your insurance plan or work with your employer’s benefits counselor. If you’re happy
with your group health plan and it is your primary insurance, then you can delay enrolling in Part B
until a later time when you are no longer working or the group health plan no longer covers you –
whichever happens first. It is important to sign up for Part B as soon as you stop working or lose
employer coverage in order to avoid late enrollment penalties.
If your employer has less than 100 employees, your insurance is called a small group health plan
and Medicare pays first and your employer pays second. This means that you should stay in Medicare
Part A and Part B. You will need the primary coverage through Medicare - only having secondary
insurance is like having no insurance at all.
Sometimes multiple employers with less than 100 employees come together and create what is called
a multi-employer plan. If only one employer within the multi-employer plan has 100 or more
employees, then the multi-employer plan acts like a large group health plan, meaning the plan pays
first and Medicare pays second.
It is always a good idea to call your health plan’s benefits administrator to find out exactly how your
coverage will work with Medicare and ask what kind of plan they are and how many employees are
counted. Be sure to keep careful records of your conversations, including the date, who you spoke
with and what they told you. Try to get all information you receive from your benefits counselor or
Medicare and Employer Insurance for People with Disabilities Scenario
Page 1 of 2
insurance company in writing. You may need to remind them that the rules for primary and secondary
insurance coverage for a person with Medicare who is under age 65 are based on 100 employees,
while the deciding number for a person age 65 or older would be 20 employees.
Important tip: In addition to speaking to your employer, you should speak to someone at the
Social Security Administration (800-772-1213) any time you make a decision about enrolling in
or declining Part B to be sure you understand the consequences of your decisions. Write down
the date, time, representative’s name and the information you received – this information could
be important if there is any problem with your benefits in the future.
Here is where you can go for additional information or if you need help:
Medicare: 800-MEDICARE (800-633-4227) or TTY 877-486-2048
Social Security Administration: 800-772-1213 or TTY 800-325-0778
Online Resources:
Medicare Part D for People Who Have Drug Coverage Through an Employer or Union:
http://www.medicare.gov/Publications/pubs/pdf/11107.pdf
Who Pays First: http://www.medicare.gov/publications/pubs/pdf/02179.pdf
Medicare and Employer Insurance for People with Disabilities Scenario
Page 2 of 2
Section 4:
Enrollment
Medicare Part B Enrollment Periods
There are different time periods during which a person can enroll in Medicare. When you
are eligible to enroll in Medicare Part B depends on your circumstances. These
enrollment periods apply to people who are eligible for Medicare either due to age or
disability. However, there are different rules for people enrolling in Medicare who have
End-Stage Renal Disease (ESRD). Please visit www.Medicare.gov for information about
enrolling in Part B if you have ESRD.
Most people do not pay a premium for Medicare Part A, but you usually pay a monthly
premium for Part B. The Part B monthly premium for most people in 2012 will be $99.90.
However, if your annual income is more than $85,000 (single) or $170,000 (married)
your Part B monthly premium amount will be higher.
Initial Enrollment Period
The Initial Enrollment Period (IEP) is the first time you are eligible for Medicare Parts A
and B. It occurs when you turn age 65 or have been receiving Social Security Disability
benefits for 24 months.
If you have been receiving retirement benefits from Social Security before age 65
or Social Security Disability benefits for 24 months, you will be automatically
enrolled in Medicare Parts A and B. You do not need to sign up for Medicare - you will
receive a red, white and blue Medicare card in the mail three months before your 65th
birthday or 25th month of disability.
If you are automatically enrolled in Medicare, you have up to three months after
your 65th birthday or 25th month of disability to decide if you would like keep your
Medicare coverage.
If you decide to keep Medicare Part A and Part B you do not need to do anything.
Your coverage will begin on the dates listed on the card.
AgeOptions on behalf of the Make Medicare Work Coalition
Medicare Part B Enrollment Periods
Page 1 of 5
Most people take Part A when they first become eligible because they do not have
to pay a monthly premium for it. However, some people decide to turn down Part
B (which has a monthly premium) and wait until later to enroll. If you decide not
to take Part B, fill in the box on the back of your Medicare card declining Part B
coverage and mail it back to the address listed. You will be mailed a new card that
only lists the starting date (called your “effective date”) for Medicare Part A.
o You should generally only consider declining Part B if you have other health
insurance from a current job and that insurance is primary to Medicare (that is,
it pays before Medicare does).
o If your other coverage is not primary and you decline Part B, you will not have
any primary coverage, which is like having no coverage at all.
o In addition, if your other coverage is not from a current job, you will not get a
Special Enrollment Period to enroll in Part B at a later time. This means you
may have to pay a late enrollment penalty. You may also have a gap in
coverage because you will only be able to enroll in Part B from January to
March of each year and your coverage will not begin until July 1st of that year.
If you have Medicaid, you should enroll in Medicare Part B as soon as you
become eligible to be sure you get all your benefits. When someone is eligible
for Medicare and Medicaid, Medicare always pays first. Medicaid pays second,
paying part or all of the costs that Medicare does not cover.
If you are not receiving Social Security benefits when you turn age 65 and you
want Medicare, you must actively sign up for it during your Initial Enrollment
Period (IEP). You may call or visit your local Social Security office or apply online at
www.ssa.gov (or www.ssa.gov/espanol/ for the Spanish version). You will receive a
Medicare card that lists the dates your Medicare Part A and Part B coverage will begin.
Your IEP is the seven months surrounding your 65th birthday. It includes the three
months before your birthday, the month of your birthday, and the three months
after.
It is a good idea to enroll during the first three months of your IEP so your
coverage will begin the month of your 65th birthday. If you enroll in Part A and/or
Part B the month you turn 65 or the three months following your 65th birthday, the
start of your Medicare coverage will be delayed.
AgeOptions on behalf of the Make Medicare Work Coalition
Medicare Part B Enrollment Periods
Page 2 of 5
If you enroll during this month of
your initial enrollment period:
Your coverage will begin:
The month you turn 65
1 month after you enroll
1 month after you turn 65
2 months after enrollment
2 months after you turn 65
3 months after enrollment
3 months after you turn 65
3 months after enrollment
Source: Medicare and You 2012 Handbook
http://www.medicare.gov/publications/pubs/pdf/10050.pdf
Note: Be careful if you decide to decline or delay enrolling in Part B. You may have
to pay a late enrollment penalty if you decide to enroll in Part B in the future. In addition,
you may only be able to enroll during limited times of the year (see the General
Enrollment Period below).
o Exception: You will NOT have to pay a penalty for enrolling in Part B later if
you have health insurance coverage through your own or a spouse’s (or
other family member’s in certain situations) current work when you first
become eligible for Part B. See the Special Enrollment Period section
below.
Important Advice: Any time you make a decision about enrolling in or declining
Part B, speak to someone at the Social Security Administration (800-772-1213) to
be sure you understand the consequences of your decisions. Write down the date,
time, representative’s name and the information you received. This information
could be important if there is any problem with your benefits in the future. If you
have other health insurance, also speak to your benefits administrator at your
employer, union or insurance company to find out how your benefits might change
when you become eligible for Medicare.
Special Enrollment Period
This enrollment period can be used if you did not enroll in Medicare Part B when you
were first eligible because you were covered by your own, spouse’s or sometimes a
family member’s current employer or union group health plan.
AgeOptions on behalf of the Make Medicare Work Coalition
Medicare Part B Enrollment Periods
Page 3 of 5
You will have up to eight months from the date your coverage or employment ends
(whichever happens first) to enroll in Part B without paying a late enrollment
penalty.
You may also use a Special Enrollment Period (SEP) to enroll in Part B while you
are still covered through your own or a spouse’s current employer or union plan.
Enrolling in Part B before your employer coverage ends will help prevent a gap in
between your employer plan and the start of Medicare benefits.
If you also want a Medicare Part D plan for prescription drug coverage, you will
only have 63 days once your employment coverage ends to enroll into a Part D
plan.
General Enrollment Period
The General Enrollment Period (GEP) is January 1st through March 31st of each year.
During this time, you may enroll in Part B but your benefits will not go into effect until
July 1st of the same calendar year. This enrollment period can be used if you:
declined Part B when you were first eligible, during your Initial Enrollment Period
at some point canceled your Part B coverage without having other insurance but
would now like to re-enroll OR
did not enroll in Part B within eight months after your current employer or union
coverage ended or when your employment ended - whichever happened first.
You usually have to pay a late enrollment penalty if you enroll in Part B during the
General Enrollment Period. This penalty is 10% of the Part B premium for each full 12
months you could have enrolled but did not. You will have to pay this penalty in addition
to your monthly Part B premium amount for as long as you have Part B.
Example. The standard monthly Part B premium in 2012 is $99.90. If you delayed
enrolling in Part B for one year when you did not have other insurance from a
current employer, you must pay a 10% penalty (if you waited two years you would
have to pay a 20% penalty, three years a 30% penalty, etc.).
o 10% of $99.90 = $9.99. Your Part B premium for 2012 will be $99.90 +
$9.99, which is $109.89 per month.
AgeOptions on behalf of the Make Medicare Work Coalition
Medicare Part B Enrollment Periods
Page 4 of 5
o In future years, you will pay your monthly premium plus 10% of that year’s
standard Part B premium. The standard part B premium amount may
change from year to year. You will have this monthly penalty for the entire
time you are enrolled in Part B.
Help Paying for Your Medicare Premiums
There is help available to pay for Medicare Part A and/or Part B premiums. Your state
has a program called the “Medicare Savings Program.” If you qualify, the program will
pay your Medicare premiums and possibly your deductibles and co-pays.
Visit Medicare’s website at http://www.medicare.gov/contacts/staticpages/msps.aspx or
call 800-MEDICARE (800-633-4227) to get find out whether you may be eligible for a
Medicare Savings Program in your state and to get the contact information to apply.
AgeOptions on behalf of the Make Medicare Work Coalition
Medicare Part B Enrollment Periods
Page 5 of 5
Section 5:
Glossary
Glossary
ALS/Lou Gehrig’s Disease: A disease that affects the motor nerve cells of the
spinal cord and causes their degeneration. Patients with this disease can qualify
for Medicare coverage regardless of age.
COBRA: COBRA is a federal law that allows certain employees, their spouses
and dependents to keep their group health plan for between 18 and 36 months
after they leave their job or lose coverage for certain other reasons. COBRA is
always secondary to Medicare.
Creditable Coverage: Prescription drug coverage that is considered to be as
good as or better than the Medicare prescription drug benefit (Part D) in
monetary value.
Equitable relief: If someone did not enroll into Part B when they should have,
they might be able to use the equitable relief process. Equitable relief is an
administrative law process created under the federal law that allows people with
Medicare to request relief from the Social Security Administration in the form of
immediate or retroactive enrollment into Medicare, and/or the elimination of a
Part B premium penalty. In order to be granted equitable relief, Social Security
must determine that a person did not enroll in Part B when they should have
because of misinformation from a federal employee.
End-Stage Renal Disease (ESRD): Kidney failure that requires you to be on
dialysis or have a kidney transplant.
Extra Help: A federal program administered by Social Security that helps people
with Medicare who have low incomes and assets pay for their Medicare
prescription drug coverage (Part D), including coinsurance, deductibles, and
premiums. There are different levels of Extra Help. You may get “full” Extra Help
or “partial” Extra Help, depending on your income.
General Enrollment Period (GEP): If a person did not enroll in Medicare during
their initial enrollment period or during a special enrollment period, they can
enroll during the GEP. The GEP is from January 1 to March 31 each year. If
someone enrolls during this period, their coverage will begin on July 1 of that
year.
Group health plan: A group health plan is any plan in which employees provide
health benefits or medical care to current or former employees. How group health
plans coordinate with Medicare depend on the size of the group health plan and
how the person qualifies for Medicare.
Initial Enrollment Period (IEP): The first chance a person has to enroll in
Medicare Parts A, B and D, if they are not automatically enrolled. If you are
© 2011 Medicare Rights Center
Glossary
Page 1 of 3
eligible for Medicare due to age, your IEP is the 7 month period that includes the
3 months before your 65th birthday, your 65th birthday month, and the 3 months
after your 65th birthday. If you are eligible for Medicare due to disability, your IEP
is the 7 month period that includes the 3 months before your 25th month of SSDI,
your 25th month of SSDI, and the 3 months after your 25th month of SSDI. If you
are eligible for Medicare due to disability, you will have another IEP when you
turn 65 and age into Medicare.
Medicare Advantage (MA) Plan: Also known as Part C or Medicare private
health plans. Part C lets you get your Medicare benefits from a private health
plan contracted by the government to provide this coverage. All Medicare private
health plans must offer at least the same benefits as Original Medicare (Part A
and Part B), but can do so with different rules and costs. Some plans offer Part D
drug coverage as part of their benefits packages. You must have Medicare Part
A and Part B to join a Part C plan.
Medicare Savings Program (MSP): These programs help pay the Medicare
Part B premium and sometimes coinsurance and deductibles for people who
have limited incomes. There are three MSPs and each one has a different
eligibility limit based on income. The programs are: Qualified Medicare
Beneficiary (QMB), Specified Low-Income Medicare Beneficiary (SLMB) and
Qualifying Individual (QI).
Medigap: A supplemental insurance policy that is sold by private insurance
companies to fill "gaps" in Medicare. This insurance policy is usually available in
the form of twelve different plans labeled A through L and works only with
Original Medicare.
Out-of-Pocket Costs: Health care costs that you must pay because Medicare or
other health insurance does not cover them.
Part A: The part of Medicare that covers most medically necessary inpatient
services. This includes hospital care, skilled nursing care and some home health
care. Part A is free for most people, if you have more 40 or more working
quarters.
Part B: The part of Medicare that covers most medically necessary outpatient
services. This includes: doctor’s services, preventive care, durable medical
equipment (DME), lab tests, x-rays, some home health care, and ambulance
services. Most people pay a monthly premium for Part B.
Part B premium penalty: The amount that a person must pay to Medicare in
addition to their monthly premium for late enrollment into Part B. The Part B
premium penalty is an additional 10 percent of the current year’s premium for
each year that a person delays enrollment when they did not have current
employer insurance.
© 2011 Medicare Rights Center
Glossary
Page 2 of 3
Part B Special Enrollment Period (SEP): An SEP is a period outside of the
Initial Enrollment Period and General Enrollment Period. The SEP for Part B
allows someone who is currently working to enroll in Part B without penalty at
anytime while they are still working and for up to 8 months after they lose their
current employer coverage, as long as they meet all the SEP criteria.
Part D: Also known as the Medicare prescription drug benefit, Part D is the part
of Medicare that provides prescription drug coverage. The benefit is optional to
most and provided only by private companies. You can get Part D coverage
either through a stand-alone prescription drug plan (PDP) or a Medicare
Advantage Prescription Drug Plan (MA-PD)—a Medicare private health plan
(Part C) that offers Medicare prescription drug coverage. You must choose Part
D coverage that works with your Medicare health benefits. People who enroll in
Part D pay a monthly premium in addition to their Part B premium.
PDP (Prescription Drug Plan): A stand-alone Medicare prescription drug plan
(Part D) offered through a private insurance company that only offers prescription
drug benefits.
Primary insurance: Primary insurance pays first on a claim for medical or
hospital care.
Retiree insurance: Health insurance provided by employers to former
employees. Retiree insurance is always secondary to Medicare.
Secondary insurance: Secondary insurance pays after primary insurance. It
usually pays for some or all of the costs that the primary insurance did not cover.
If the service was not initially covered by the primary insurance, the secondary
insurance may or may not cover it, it depends on the type of plan.
Social Security Administration (SSA): The United States government agency
responsible for advancing the economic security of Americans through shaping
and managing various programs, including Medicare, Social Security Disability
Insurance (SSDI), Supplemental Security Income (SSI) and Extra Help.
SSDI (Social Security Disability Insurance): Monthly benefits provided through
the United States Social Security Administration for people who lose their ability
to work because of a severe medical impairment (disability). People who receive
SSDI for 24 months are eligible for Medicare.
© 2011 Medicare Rights Center
Glossary
Page 3 of 3