Medicare & Retirement Part 2:
Talk to Benefits Office Before Retiring

In a “Case Flash” in the July/August edition, the MGH Community News reported that retiree insurance works differently with Medicare than insurance from a current employer; employer insurance is primary, and then Medicare is secondary, retiree insurance is generally secondary, paying only after Medicare pays.

This month’s case flash concerns a 69 year old man who received Medicare and had been covered by his wife’s employer-sponsored insurance so he didn’t take Medicare B. When his wife retired Mr. K was still covered under her plan and receiving the care he needed, so he still did not take Part B. Then a couple of years after his wife retired, he got a bill to repay two years’ worth of medical bills in the amount of over $5,000 which he in fact was responsible to pay. For the past two years, Part B of Medicare should have been paying first for Mr. K’s doctors’ visits, not his wife’s retiree plan. Mr. K should have enrolled in Medicare Part B during a Special Enrollment Period (SEP) to which he was entitled within 8 months of when his wife’s coverage shifted from employer to retiree insurance. Now to enroll in Part B, he will need to wait until the next General Enrollment Period and he will have to pay a late penalty of 10 percent of the monthly Part B premium for every full 12 month period he had not enrolled in Medicare and did not have insurance from his or his spouse’s current employer.

Mr. K expressed outrage that there was no way he or his wife could have known the retiree coverage was not primary for him. The counselor told Mr. K that, unfortunately, employers have no legal obligation to counsel employees about health coverage.

It is always important to speak with the employee benefits office when one is considering or nearing retirement, and becoming eligible for Medicare, to see how the company’s retiree policies will work with Medicare. Many retirement policies require you to sign up for Medicare Part B, and help pay for Medicare costs. It’s important to compare the costs and coverage of your retiree policy to other supplemental options such as Medigaps and Part D plans. If you keep your retiree coverage but want additional supplemental insurance, always check to see how the other insurance will work with your retiree coverage. Retiree coverage will not work with all other kinds of insurance, and you could potentially lose it if you sign up for benefits that do not coordinate with your retiree policy.

-Adapted from “ Case Flash: If You Or Your Spouse Is Retiring, Talk To Your Employee Benefits Office—Your Coverage May Change”, MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center, Vol. 12 , No. 15: July 28, 2009.

 

9/09