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BY IRENE C. CARD and BETSY CHANDLER
NEWJERSEYNEWSROOM.COM
This is a question we often hear and the answer depends on a number of factors:
If you are 65 or older and you have health insurance coverage through your or your spouse's current job with an employer that has 20 or more employees, your employer coverage is primary.
If you are under 65 and have a disability or are diagnosed with ALS and you have health insurance coverage through your or your family member's current job with an employer that has 100 or more employees, your employer coverage is primary.
If you have end-stage renal disease (ESRD), your employer coverage from a current job is primary for the first two and a half years (30 months) after you are first eligible for Medicare Part A. Medicare becomes primary after that 30 month "coordination period" (even if you have not yet applied for Medicare and regardless of whether you are also entitled to Medicare because of age or disability).If you are 65 or over, eligible for Medicare, and have insurance through your or your spouse's current job, in most cases you should at least take Part A (hospital insurance).
For most people, Part A is free. To decide whether to take Part B (medical insurance), for which everyone pays a monthly premium, you should ask your benefits manager or human resources department how your employer insurance works with Medicare. If they give you a blank stare, get qualified answers from another source!
When you qualify for Medicare, your employer insurance may start to work differently for you. You will need to figure out whether paying for both types of coverage will be useful in offsetting your health care costs or will you be better off refusing the employer insurance and purchasing a Medigap policy.
It is most important that you first assess whether your employer insurance will be primary or secondary to Medicare. If your employer insurance will be primary (refer back to the second sentence in this article), you can safely refuse Part B Medicare. When you or your spouse retire, you immediately apply for Part B Medicare (medical expenses) and it will become effective the date of your retirement. There will be no penalties for being a "late enrollee."
If Medicare will be primary for you, (employment with a company with less than 20 employees), your group insurance will be secondary so you must sign up for Part B. You will have to determine how your group insurance will pay claims, secondary to Medicare. Some plans will pay very little. They will say Medicare paid 80 percent and if you were under 65, we would have paid 80 percent; therefore, we owe you nothing now because if we were to pay on the remaining twenty percent, you would be getting a richer benefit than those actively employed. In this case, you will be better off refusing the group plan and purchasing a Medigap policy.
When you or your spouse retires, do not opt for COBRA. COBRA does not count as creditable coverage and when you go to apply for Part B Medicare, you will find that you can only sign up during open enrollment which is January, February and March and your coverage will become effective the following July.
We see this happening all too often. Frequently it is the employee benefits department that gave the retiring employee bad advice.
Irene Card & Betsy Chandler are licensed insurance professionals working at MIC Insurance Services, a health insurance services company. If you have questions relative to this column or other related topics, we invite you to call (973) 492-2828, or visit our web site at www.micinsurance.com.
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