October 31, 2018

Medicare/Medicaid for Groups Over 20 Employees

If you have Medicare and other health coverage, each type of coverage is called a “payer .” When there’s more than one payer, Medicare Secondary Payer or “coordination of benefits” rules decide who pays first. The “primary payer” pays what it owes on your bills first, and then you or your health care provider sends the rest to the “secondary payer” to pay In some rare cases, there may also be a “third payer’.

In general:

  • If your employer has less than 20 employees, Medicare generally pays first.
  • Generally, your group health plan pays first if both of these are true:
  1. You’re 65 or older and covered by a group health plan through your current employer or the current employer of a spouse of any age. Note: “Spouse” includes both opposite-sex and same-sex marriages.
  2. The employer has 20 or more employees and covers any of the same services as Medicare (this means the group health plan pays first on your hospital and medical bills).

Multi-employer plans

Multi-employer and multiple employer group health plans are plans sponsored by or contributed to by 2 or more employers. If an employer joins with other employers or employee organizations (like unions) to sponsor or contribute to a multi-employer or a multiple employer plan, and any of the other employers has 20 or more employees, Medicare would generally pay second.

However, a plan might ask for an exception, so even if a particular employer has less than 20 employees and participates in a multi-employer or multiple employer plan, an employee would need to find out from their employer whether Medicare pays first or second.

Frequently Asked Questions

Q: If Idon’t accept coverage from my employer, how will this affect what Medicare will pay?
A: Medicare pays its share for any Medicare-covered health care service you get, even if you don’t take group health plan coverage from your employer, and you don’t have coverage through an employed spouse.

Q: What happens if Idrop coverage from my employer?
A: Medicare pays first unless you have coverage through an employed spouse, and your spouse’ s employer has at least 20 employees. Note: If you don’t take employer coverage when it’s first offered to you, you might not get another chance to sign up . If you take the coverage but drop it later, you may not be able to get it back. Also, you might be denied coverage if your employer or your spouse’s employer generally offers retiree coverage but you weren’t in the plan while you or your spouse was still working.

Q: If I’m 65 or older and still working, what health benefits does my employer have to offer me?
A: Generally, employers with 20 or more employees must offer current employees 65 and older the same health benefits, under the same conditions, that they offer younger employees. If the employer offers coverage to spouses, it must offer the same coverage to spouses 65 and older that it offers to spouses under 65.

Q: I’m retired and have Medicare I also have group health plan coverage from my former employer. Who pays first?
A: Generally, Medicare pays first for your health care bills and your group health plan (retiree) coverage pays second.

Q: I’m retired and have Medicare. My spouse is still working and I have group health plan coverage through my spouse’s employer. Who pays first?
A: If your spouse’s employer has 20 or more employees. your spouse’s coverage pays first and Medicare pays second. If your spouse’ s employer has less than 20 employees, Medicare pays first.

Q: What happens if Ihave group health plan coverage after I retire and my former employer goes bankrupt or out of business?
A: If your former employer goes bankrupt or out of business, federal COBRA rules may protect you if any other company within the same corporate organization still offers a group health plan to its employees . That plan is required to offer you COBRA continuation coverage.

Q: I’m under 65, disabled, and have Medicare and group health plan coverage based on current employment. Who pays first?
A: It depends. Generally, if your employer has less than 100 employees, Medicare pays first if you’re under 65 or if you have Medicare because of a disability. Sometimes employers with less than 100 employees join with other employers to form a multi-employer plan or a multiple employer plan . If at least one employer in the multi-employer plan or a multiple employer plan has 100 employees or more, Medicare pays second.

Have more questions about Medicare/Medicaid? We have answers.

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