New to Medicare as Your Primary Insurance

Leaving employer coverage to transition to Medicare as your primary insurance can be overwhelming. Medicare insurance is new to you. But never fear the process is painless when you know the proper steps to take.

First you need to know that the only parts of Medicare you will enroll in via the Social Security office is your Original Medicare Part A & B. All other Parts and supplemental coverage enrollments are done outside of that, through an insurance agent or agency.

Also, if you are already taking Social Security, the government may auto-enroll in both parts of Medicare. Otherwise, you must enroll yourself.

We know you have more questions. Schedule your Medicare advisement appointment today. And in the mean time review the Medicare frequently asked questions below.  

Frequently asked questions

Your online connection to the “Medicare & You” handbook.

You can call 1-800-MEDICARE (1-800-633-4227 TTY 1-877-486-2048) or use the online service

New to Medicare with Employer Insurance

Medicare and Employer Coverage

If you are 65+ (or turning 65 soon) and will have both Medicare and Employer Coverage because you are still actively working.

You will likely have options to keep your employer insurance and Medicare will coordinate with that coverage. You’ll also want to compare the cost of that employer coverage against what it would cost you to roll over to Medicare as your primary insurance.

Do your research. It will help you decide on which coverage option is most cost-effective. It can also help you avoid any Medicare late enrollment penalties wherever possible. 

Please note Medicare coordination rules are different for people under age 65 on Medicare due to disability.


One exception would be if you are contributing to an HSA and plan to continue doing so. If that’s the case, do not enroll in Part A. Read more on that below

Large Companies 20+ Employees

Medicare is secondary if you are age 65 or older and your employer has more than 20 employees and you are still ACTIVELY working (not a retiree or on COBRA). This is called Medicare Secondary Payer. In this scenario, your group plan pays first, and then Medicare pays second. 

Medicare will be a secondary payer after your group insurance. It’s up to you whether you enroll in Part A or B or both to coordinate with your group coverage. 

Most active employees with group coverage enroll in Part A. Most people get premium-free Part A. Part A can coordinate to lower your costs if you have a hospital stay. 

Here is a numbers example,  your employer health plan has a $3,000 deductible. The Medicare Part A hospital deductible is $1,484 in 2021. So if you have both your employer insurance and Part A, and you incur a bill for a hospital stay. You will only be reasonable for $1,484 of your inpatient hospital services. Medicare pays the rest of any Part A services.

Now It does not work the same way with Part B, and Part B has a monthly premium. 

One exception would be if you are contributing to an HSA and plan to continue doing so. If that’s the case, do not enroll in Part A. Read more on that below in our FAQ (frequently asked questions) Medicare with Employer Coverage.

Small Companies under 20 Employees

Medicare is primary if you are age 65 or older and your employer has fewer than 20 employees. You will need both Part A & B for sure because Medicare will pay first, and then your group insurance will pay secondary. Occasionally we see some insurance companies who will cover claims even if you don’t have Part B. Don’t buy it. You run the risk of that insurance company changing that at any time without warning, and leaving you stuck with all the expenses that Part B would normally cover. It’s not worth the risk – we advise always enrolling in Parts A & B if your employer has fewer than 20 employees and Medicare will be primary.

However, you may be able to delay enrolling in a Part D drug plan without penalty if your group plan has RX benefits, as most do. Be sure to compare costs. It is sometimes cheaper to leave the group insurance altogether and enroll in a Medicare supplement as your secondary instead.

Be sure to read our FAQ (frequently asked questions) Medicare with Employer Coverage below.

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FAQ Medicare with employer coverage

Your Original Medicare benefits will coordinate with your benefits from your employer group health plan while you are still actively working. If your employer has 20 or more employees, then Medicare will be a secondary payer after your group insurance. It’s up to you whether you enroll in Part A or B or both to coordinate with your group coverage.

Medicare is primary if you are age 65 or older and your employer has fewer than 20 employees. You will need both Part A & B for sure because Medicare will pay first, and then your group insurance will pay secondary. 

In most cases, yes. Employees of large companies can take advantage of Medicare secondary payer benefits. Your Part A benefits will cost nothing if you have worked at least 10 years in the United States. Allowing Part A to coordinate with your group insurance could reduce your hospital bill in some situations. The main exception to this is if you have a Health Savings Account. 

If your health insurance plan is H.S.A. compatible, and you wish to continue contributing into that account, you cannot be enrolled in any Part of Medicare. There are very specific rules about Medicare in regards to health savings accounts.  

 If you are 65 or older and have a larger employer with 20 or more employees and the company plan is creditable coverage, you can delay Part B without penalty.

If you work for a small employer, then Medicare is primary and you need to enroll in Medicare Part A and B when we first become eligible for Medicare.

 

 

 

Definitely. You’ll need to consider how much you are paying for your employer group health insurance. If your employer pays most of the cost, and you are spending only $100/month or so for your portion of the premium, then keeping employer insurance as primary may be in your best interest.

If however, you are spending $300/month for that same coverage, you might want to consider leaving the group plan and instead enrolling in Medicare Parts A & B with a full coverage supplement. Coverage of this kind will leave you with very little out of pocket.

Also, in the case of covering spouses, we often find that is cheaper for the spouse to go on Medicare as primary than to stay on the employer plan. This is because many employers don’t contribute toward the cost of spousal insurance. If carrying your spouse on group health coverage costs you hundreds of dollars each month, then Medicare and a supplement or Advantage plan can often save you quite a bit.

You should contact Social Security to enroll in Medicare Part A and/or Medicare Part B about 2 – 3 months before you turn 65. If you are already taking Social Security benefits, you will be automatically be enrolled in Medicare and will have to decline Part B manually if you do not want it while you are still working.

Most Large group employer health plans include insurance for prescriptions that is as good as or better than Part D. This is called creditable coverage. If that is the case with your employer plan, you can safely wait until you retire to enroll in Part D. Just be sure that you elect a Part D drug plan within 63 days of losing your group health insurance. This will ensure you avoid a late penalty.

Have a high deductible health plan? These occasionally may not be as good as Part D. That’s considered non-creditable, which means you’ will owe a penalty later on for not enrolling in Part D when you were first eligible. Your employer must notify you if it’s coverage is non-creditable.

Above are the rules are for employees who work for companies with 20 or more employees.

 If you work for a smaller company, Medicare will be primary to your group insurance, and you should enroll in both Medicare Parts A & B and speak with us about your options for Part D to avoid a late penalty.   

If your large group plan is considered Creditable coverage. That means that you can enroll in Part B later without a late penalty when you decide to retire. Once you leave the group plan, your insurance company will mail you a creditable coverage letter. Be sure you keep this. You will need it to show Medicare that you had other coverage so that you are not subject to late penalties for Parts B and D.

New to Medicare with Disablity

Dual eligible beneficiaries

“Dual eligible beneficiaries” generally describes beneficiaries eligible for both Medicare and Medicaid. The term includes beneficiaries enrolled in Medicare Part A and/or Part B and receiving full Medicaid benefits and/or assistance with Medicare premiums or cost sharing through one of these Medicare Savings Program (MSP) categories:

 

 

  •  Qualified Medicare Beneficiary (QMB) Program: Helps pay premiums, deductibles, coinsurance,
    and copayments for Part A, Part B, or both programs
  •  Specified Low-Income Medicare Beneficiary (SLMB) Program: Helps pay Part B premiums
  • Qualifying Individual (QI) Program: Helps pay Part B premiums
  • Qualified Disabled Working Individual (QDWI) Program: Pays the Part A premium for certain
    disabled and working beneficiaries
 Determining your Medicare eligibility is is just one of the many things we will help you with . Schedule your Medicare Advisement now.