When is Medicare Considered Your Secondary Insurance?

For those of you who are continuing to work at Medicare age, you may be confused as to how your employer insurance will continue to work when Medicare is on the table. 

It isn’t as simple as you may think, and you should contact your employer's benefits department to make sure you understand their requirements. 

Additionally, if your employer covers additional family members, you need to be aware of how the decisions you make might affect their coverage as well. 

Understanding Medicare Laws Based on Your Employer

If you are 65 and older and still employed, you might ask yourself, “Can my employer force me to take Medicare?”

The Omnibus Reconciliation Budget Act of 1980 created a Medicare Secondary Payer program to ensure that Medicare does not pay for items and services that other health insurance programs are responsible for. 

For this to be effective, they had to determine who paid for the service and items first. The primary payer is the insurance company responsible for paying the insurance claim first, up to its limits (the primary insurance). 

The secondary payer covers the remainder of the costs that the primary did not cover up to its limits. A company's number of employees determines who the primary and secondary insurance plan will be.

How the Size of Your Company Affects Your Coverage

Employers with 20 or more employees are considered large employers. They must offer the same primary insurance to their employees who are 65 years old or older and their spouses as offered to all their other employees. Under no circumstances can they offer any incentives to the older employees to terminate their coverage with them to force them to enroll in Medicare. So, employer-provided insurance is the primary insurance for people employed by companies with more than 20 employees.

It then follows that an employer with 20 or fewer employees is considered a small employer, and the insurance for employees covered in the employer insurance plan is secondary to Medicare. 

Additionally, the employer can terminate the employee's insurance plan and require the employee to enroll in Medicare. It is totally up to the employer. They do not have to offer insurance to employees 65 years or older as they would to all other employees.

According to the Age Discrimination in Employment Act, age-related discrimination is not considered when a small employee terminates the employer insurance coverage for a Medicare-eligible employee. 

This would only apply to private employers with 20 or more employees, state and local employers, employment agencies, labor organizations, and the federal government.

Conclusion 

When considering your options, acquire accurate information from your employer's benefits department and Medicare.gov. Being prepared can prevent you and your family from a gap in insurance coverage.

If you would like 1:1 support with financial resources, you can meet with a Financial Coach to learn more about what's available to you and your loved ones. 

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