Enroll in Medicare Part B or delay it?

[FPin]

I have a question about someone turning 65 while on a small employer group health plan. The question is whether or not they should sign up for Medicare Part B at this time. Here is the situation:

• Joe turns 65 this coming January (2018).
• He works for a small employer with 19 employees.
• He plans to keep working for this company until age 70.
• He will stay on his small employer's group health plan because he has to for his family to keep this group health coverage.

Here is what the Medicare.gov website says for employees who are currently working, and have coverage through their jobs: "The size of the employer determines whether you may be able to delay Part A and Part B without having to pay a penalty if you enroll later. [If] the employer has fewer than 20 employees, you should sign up for Part A and Part B when you're first eligible. In this case, Medicare pays before your other coverage. If you don't enroll when you're first eligible, you may have to pay a Part B late enrollment penalty, and you may have a gap in coverage if you decide you want Part B later."

However, a Medicare continuing education course I'm currently taking says the following: "...for those who are part of an employer plan with fewer than 20 employees, rejecting Part B might make sense because Medicare would be the primary payor, and the employee would be paying for the Part B premium as well as perhaps part of the group insurance premium. Because a year's premiums for Part B will be substantial compared to the Part B deductible and coinsurance, this might not constitute prudent use of dollars, considering that the group health plan will be paying a substantial part of the bill. In any event, the employee may sign up for Part B at any time during employment or within eight months after leaving employment (or the group health plan) without penalty."

Joe would rather not purchase Medicare Part B now if he does not have to. However, he wants to avoid the Medicare Part B late enrollment penalty if he delays signing up for it at age 70. He is willing to sign up for Part B now if it is the only way to prevent the Part B late enrollment penalty.

Should Joe sign up for both Medicare Parts A & B now? Or is it OK to sign up for just Medicare Part A now and delay signing up for Medicare Part B to when he is 70? If he delays signing up for Part B until age 70, will he have to pay the Part B late enrollment penalty?

Your help is appreciated!

 

[LostDollar]

The very first thing you and/or your client need to find out is:

Does the employer group plan process claims for Medicare eligible employees as though Medicare coverage is present, even if the employee is not enrolled in Medicare Part B?

One major insuror writes their group contracts to have the plan secondary to Medicare and pays only the balance. If the employee is not enrolled in Medicare, the insuror estimates what they believe Medicare would have paid and will pay only the balance.

So if the group contract is written this way, if your client does not take part B, they will have very little insurance reimbursement for any medical claims.

(A side note: employers may or may not cooperate with employee plans to work until 70. we won't discuss how I know this.)

 

[LostDollar]

Also keep in mind that client's Medigap open enrollment period will be tied to Part B effective date. And, if I am remembering right, technically at least, the Medigap SEP for leaving employer plans does not apply to small group plans.

 

[TwoCents]

Medicare Part B Enrollment: Pitfalls, Problems and Penalties - Medicare Rights Center Look over the PDF found on this page. But in this situation (small employer), I would say he's going to need to take Part B. He'd also want to verify that any drug coverage from the plan is creditable. If it isn't, then he's going to need a Part D plan.

 

[WCMason]

I have a question about someone turning 65 while on a small employer group health plan. The question is whether or not they should sign up for Medicare Part B at this time. Here is the situation:

• Joe turns 65 this coming January (2018).
• He works for a small employer with 19 employees.
• He plans to keep working for this company until age 70.
• He will stay on his small employer's group health plan because he has to for his family to keep this group health coverage.

Here is what the Medicare.gov website says for employees who are currently working, and have coverage through their jobs: "The size of the employer determines whether you may be able to delay Part A and Part B without having to pay a penalty if you enroll later. [If] the employer has fewer than 20 employees, you should sign up for Part A and Part B when you're first eligible. In this case, Medicare pays before your other coverage. If you don't enroll when you're first eligible, you may have to pay a Part B late enrollment penalty, and you may have a gap in coverage if you decide you want Part B later."

However, a Medicare continuing education course I'm currently taking says the following: "...for those who are part of an employer plan with fewer than 20 employees, rejecting Part B might make sense because Medicare would be the primary payor, and the employee would be paying for the Part B premium as well as perhaps part of the group insurance premium. Because a year's premiums for Part B will be substantial compared to the Part B deductible and coinsurance, this might not constitute prudent use of dollars, considering that the group health plan will be paying a substantial part of the bill. In any event, the employee may sign up for Part B at any time during employment or within eight months after leaving employment (or the group health plan) without penalty."

Joe would rather not purchase Medicare Part B now if he does not have to. However, he wants to avoid the Medicare Part B late enrollment penalty if he delays signing up for it at age 70. He is willing to sign up for Part B now if it is the only way to prevent the Part B late enrollment penalty.

Should Joe sign up for both Medicare Parts A & B now? Or is it OK to sign up for just Medicare Part A now and delay signing up for Medicare Part B to when he is 70? If he delays signing up for Part B until age 70, will he have to pay the Part B late enrollment penalty?

Your help is appreciated!

He should take A and B or he has no primary insurance. The EGHP will exclude what Medicare should have paid, leaving him with very little insurance. Whoever is running that continuing ed course is giving out harmful information.

 

[kgmom219]

1. LD....you are talking about an self-funded plan. The rules were laid out by the employer, not a carrier. You can't get carrier specific.
2. The Medicare Employer Part B form (for late enrollees with credible coverage) does not state nor ask if the plan or Medicare is primary.
3. Even though the group is under 20 ee's, the plan will count as creditable coverage and the LEP will not apply
4. I would confirm that Medicare really is primary. 19 FT employees? On the plan? Are there part timer's somewhere? Just because there are only 19 on the plan doesn't mean the plan isn't filling out the MSP form as Medicare secondary.
5. If Medicare is primary, then this is going to get state specific. In TX, I can leave someone on a MSP plan, but its still full coverage. Part A automatically, so that pays Part A charges first then the group plan. No Part B, so the plan pays as primary.
6. Assuming the plan isn't a Christian Share Ministry, any ACA compliant plan is going to be creditable coverage for Part D.

 

[LostDollar]

If I can find a plan template for a specific carrier that contains the Medicare primary payer language, is that a template for a self funded plan then? It has been awhile since I was involved with this issue and things were quite confusing to me at the time. I had a specific goal I was working with and a lot of the bigger picture was not very clear to me.

 

[FPin]

Thanks to everyone for their responses.

The group health plan is with Blue Cross Blue Shield of Texas (BCBS-TX). It is a high-deductible HSA-qualified plan. (Joe realizes he will not be able to contribute to the HSA savings account come January).

This afternoon, Joe contacted BCBS-TX customer service, and was told the following: Joe needs to sign up for Medicare Part A, but not for Medicare Part B. BCBS-TX will be primary for the services normally covered by Part B, and Medicare will be primary for the services covered by Medicare Part A. Once he retires at age 70, he will not face a penalty when signing up for Part B. Also, the prescription drug coverage under his BCBS-TX plan is creditable coverage, so he does not need to sign up for Medicare Part D at this time.

Unfortunately, the BCBS-TX customer service representative could not give Joe this information in writing. So Joe has to trust that the BCBS-TX customer service representative is correct. He is not sure he wants to take that chance, and may sign up for Part B anyway.

 

[LostDollar]

Joe should have a plan document from the employer detailing the characteristics of the plan. If he has lost or discarded the one he got the beginning of the year, he should be able to get another - or at least use HR's copy in their office and ask them to make him copies of the relevant pages. When I was working we always got a new plan document each January for the new coverage year. There should be a section in that document covering coordination of benefits with other plans, including Medicare.

 

[somarco]

BCBS-TX will be primary for the services normally covered by Part B, and Medicare will be primary for the services covered by Medicare Part A.

I have handled a number of clients where group health and Medicare were involved but have never come across a situation where the plan, or Medicare, was primary for one type of claim and secondary for another.

Seems to me it is one or the other but not both.