This week’s questions from Carol
My husband, John, turned 65 on February 4th. He’s a self- employed general contractor. I’m a full time Physician Assistant working in a family practice and turn 60 in April. We’re on a family Plan with Highmark through my employer. They pay 80% and I 20% of the monthly premium. I expect to work approximately 6 or 7 more years and keep the plan, with John remaining on it as well. Is it necessary for him to sign up for Medicare now or can he wait until I’m getting ready to retire and avoid paying the monthly Medicare Part B premium until then? Is there any benefit to him having both my PPO Plan and Medicare Part A and B?
Answer
Enrolling is Almost Always Recommended
This is an important topic and represents probably a few of the hardest to grasp concepts and most common questions we get as agents regarding Medicare; When to enroll in Part B, when to opt out and stay on an employer health insurance plan, when to leave an employer plan and go with Medicare instead, and who is subject to late enrollment penalties?
I almost always recommend enrolling in Part A because it’s no cost and may come in handy in the event of a hospitalization or the need for a Skilled Nursing stay. The only people who shouldn’t enroll in Part A are those who still want to make contributions to a Health Savings Account.
When it come’s to Part B, there’s no single answer for those in Carol and John’s position. So many people work past age 65 or have spouses 65 or older who have the option to stay on their employer plan. Some must enroll in Part B even if they have employer coverage (I will explain who shortly), many are best to opt out, and others are best to drop employer coverage and opt into Medicare and a Supplement or Advantage Plan because it’s less expensive and better coverage. The Health Insurance Store can advise what’s best for you. We’ve been doing just that for 14 years.
No Late Enrollment Penalty
Let me first make something very clear once again, because it seems like no matter how often I go over this, people still don’t understand, usually because they are listening to others who don’t either. Any active employee or a spouse of an active employee, like John, who is getting health insurance from that employer and eligible for Medicare, will never pay a late enrollment penalty for not having Medicare Part B or Part D as long as the employer coverage was continually in place after age 65. Carol’s husband does not need to sign up for Part B if he wants to remain on her plan. There will be no late enrollment penalty when he decides to get Parts B and D, be that next year or 10 years or longer from now.
Not Always the Case
However, that’s not the case for everyone. Carol stated she works for a private family practice. This tells me that there are probably less than 20 employees on the group health plan, which is very important to know when making my recommendation to opt in or out of Part B. Since the plan is provided by Highmark, her husband does not need Part B. It would be a waste of $170 per month, the standard monthly premium. It could be more than $170 if a single individual has an adjusted gross income of $90,000 and above, or a married couple $180,000 plus. Here’s where it gets really confusing. For group health insurance policies with less than 20 enrolled employees, Medicare is secondary to the health insurance. Therefore, it’s each individual insurance company’s choice to decide if they are going to pay claims for services that would have been covered under Medicare Part B for those who are eligible but not enrolled. Highmark does. UPMC, however, does not as of January 1st, 2022. Anyone who works for a company that has less than 20 employees on the group UPMC health plan, is eligible for Medicare, and wants to remain on the plan needs to enroll in Part B immediately! For those in this situation, the odds of me recommending dropping employer coverage and moving to a Medicare Supplement or Advantage Plan increase significantly. Only those who take more than one brand name medication would be likely to get better value staying on a UPMC employer health insurance plan with less than 20 employees. I suggest calling us or emailing me if you are on a UPMC plan that requires you to enroll in Medicare Part B or are confused.
That being said, almost no one needs to enroll in Medicare Part B who’s on an employer group plan with more than 20 employees enrolled. It doesn’t matter what company supplies the health insurance policy.
Thank you!
If you have any questions or concerns regarding this column topic, or would like to make an appointment for a no-cost consultation, please feel free to give us a call – we would be happy to help. I’d like to remind everyone that I do a live call-in talk show called Medicare A to Z every 1st and 3rd Monday of the month on WMBS Uniontown, 590AM and 101.1FM, from 1 to 3 PM. You can listen in on their website, wmbs590.com.
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