By Victoria J. Braden
Braden Benefit Strategies, Inc.
Medicare is a topic all employers offering health insurance to their employees need to understand. There are two sets of compliance, one for employers with less than 20 employees and one for those over 20 employees. Not understanding the difference could be very expensive for both the employee and the employer.
Employers with less than 20 employees
Employees participating in the company health insurance MUST enroll in Medicare Part B. In groups with less than 20 employees the government considers Medicare the employee’s primary insurance and the employer provided insurance as secondary coverage.
We have seen a situation where the employee did not enroll in Medicare Part B thinking he had coverage through his company’s health insurance. A major medical event occurred and the health insurance company did not cover medical expenses that should have been covered by Medicare Part A & B. This left the employee with a large financial exposure.
The employer had been misinformed by the group health insurance agent who was not aware of the Medicare Part B requirement for companies with less than 20 employees. The liability of these expenses became a topic for the lawyers. Was the employee responsible for the uncovered expenses? The Employer or the Agent? The liability came down on the employer.
In companies with less than 20 employees, the employer can subsidize the cost of an employee’s Medicare Part B and Medicare subsidy. This has always proven to be less expensive than the insurance companies individual group health rate. However, when the employer pays a significant portion of the employee’s individual health insurance premium, the employee usually elects to remain on the company’s policy. Our experience in the cost difference is usually a savings to the employer of $200 or more.