Medicare Secondary Payer (MSP)
Age 65, shall I keep insured by my work’s group health insurance or opt for the Medicare if I am still working?
I am being asked by one of our clients and after diving to researching the answer from the related web sites of Center of Medicare and Medicaid and Social Security and referring to my own knowledge in group health insurance, I think I come into a conclusion.
The simple answer is it depends.
If you work for a company with 20 or more employees (full time or part-time), then you would be better off of keeping your work’s group health insurance. Under the current rules, your employer’s group health plan would be the Primary Payer of medical needs and Medicare is only the Secondary Payer. It means your group health insurer is responsible for paying most of your medical expenses before Medicare is needed to chip in.
But, if your employer employs less than 20 full time or part time employees, then the table is turned around. Medicare would become the Primary Payer of your insurance needs and most of the time the coverage that provided by Medicare is more extensive than a run of the mill group health plan can provide. 99% of the hospitals in the States would accept Medicare patients and the network of doctors that accept Medicare is normally a much larger pool of the HMO plan network that normally bound within 20 to 30 miles radius where you live.
Then, if I am an employer, can I not provide the group health insurance to the employee that turn 65 and is eligible for Medicare. Again, the short answer is number of employees you employ. As stated in the Medicare Secondary Payer (MSP) Manual, (Rev.124, 03-22-19):
Only employers with 20 or more employees are required to offer the same (primary) coverage to their age 65 or over employees and the age 65 or over spouses of employees of any age that they offer to younger employees and spouses.
Of course, I have simplified the argument here and I would recommend whoever reading this blog and having great interest in this topic, visit the following links: