Medicare Secondary Payer while on Group Health

Medicare Secondary payer is a term use by medicare when Medicare is not responsible to pay first.  In this situation the Group Health company will pay first and ‘coordinate’ benefits with Medicare.

When you or your spouse turn 65 and are still working for a company with more than 20 employees, you can deny Medicare until you retire or until your younger spouse turns 65.  If the company you work for has more than 20 employees, Group Health insurance companies are primary and Medicare will be secondary for active employees ages 65 and older and the spouses (ages 65 or older) of active employees.

Federal law takes precedence over State law and private insurance contracts.  When Medicare is the secondary payer, it’s federal, regardless of state law or plan provisions.

Group Health Plans …

An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer.  Even if the employer does not contribute to the premium, but merely collects it and forwards it to the appropriate individuals insurance company, the Group Health Plan policy is the primary payer to Medicare.

Medicare, Medicaid, and Schip Extension Act of 2007 …

New reporting requirements for the primary payer to CMS.  Prior to 2007 CMS was often unaware of it’s entitlement to recover of insurance settlements.  Now, failure to report an insurance settlement for a Medicare beneficiary carries a $1,000 per day, per claim penalty.

Companies with under 20 employees …

Medicare is the primary and the employer’s group health plan is secondary for employees with Medicare parts A and B when firms have fewer than 20 employees.  Some companies will actually offer a reduced monthly premiums for the member who also has Medicare as their primary payer.  Be sure to look into the option of enrolling into a Medicare Supplement plan, this may provide better coverage in addition to a lower premium.  If your spouse is under age 65 you may want to stay on the group health plan because the full cost of the COBRA premiums may be a bit shocking.

If you are in one of these two situations your group carrier will notify Medicare in order to coordinate the two plans benefits for you.  Also when Medicare is your secondary payer, your insurance company will submit claims to medicare, this is not your responsibility.

In most cases if a person is eligible for a Medicare Supplement plan, the price and benefit combo can’t be beat.  Medicare Supplement Plan F for example provides virtually 100 percent coverage for Medicare Part A deductibles of $1,132.00 per benefit period, and Medicare Part B $162 annual deductible along with Medicare Part B 20% coinsurance after the deductible is met.  Employers are increasingly suggesting the employee move to either a Medicare Supplement or Medicare Advantage plan once they turn 65 because of the dramatic increase in group premiums for individuals age 65 and over.

If you have questions regarding Medicare as primary or secondary coverage please feel free to call anytime.

Need Help or have Questions?

John Conner

Author: John

Medicare Options along with Individual and Group International Medical Insurance Options.

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