Welcome to the final part of our series
"Solving the Mystery of Medicare and Social Security" where we look at
Medicare Benefits
Understanding the components of Medicare is essential for making informed decisions about your healthcare coverage, especially if you plan to continue working beyond the typical retirement age and are eligible for employer-sponsored benefits. Sharing this information with your employees can help them select the Medicare option that best aligns with their healthcare needs and financial circumstances.
Medicare Facts:
- Medicare has two main parts
- Medicare Part A (hospital insurance)
- Medicare Part B (physician and outpatient services)
- Medicare also offers prescription drug coverage (Medicare Part D) to everyone with Medicare
- If you or your spouse paid Medicare taxes while working for a certain amount of time typically you don't pay premiums for Part A coverage
- If not eligible for premium-free Part A, you may be able to buy it ($278 - $505 every month)
- Medicare beneficiaries are required to pay for Part B and Part D coverage
- The standard Part B premium amount in 2024 is $174.70 every month
- Part D premium varies by drug plan chosen
Original Medicare:
- Includes Medicare Part A (Hospital Insurance) and Part B (physician and outpatient services)
- You can join a separate Medicare drug plan to get Medicare drug coverage (Part D)
- You can use any doctor or hospital that takes Medicare, anywhere in the U.S.
- You can also shop for and buy supplemental coverage that helps pay your out-of-pocket costs (i.e. your 20% coinsurance)
Medicare Advantage (also known as Part C):
- Medicare Advantage is a Medicare-approved "bundled" (Parts A, B, and D) plan from a private company that offers an alternative to original Medicare for your health and drug coverage
- In many cases, you can only use doctors who are in your plan's network
- In many cases, you may need to get approval from your plan before it covers certain drugs or services
- Plans often have different out-of-pocket costs than original Medicare or supplemental coverage like Medigap
- There may be additional premium required
- Plans may offer extra benefits that original Medicare does not
Signing Up for Medicare:
- Based on Age:
- Automatic Enrollment: If you are receiving Social Security or Railroad Retirement Board (RRB) wage benefits at least 4 months before your 65th birthday, you will be automatically enrolled in Medicare Parts A and B starting the first day of the month you turn 65
- Manual Enrollment: If you are not receiving Social Security or RRB wage benefits, you need to enroll manually. The Initial Enrollment Period (IEP) for Medicare starts 3 months before your 65th birthday, includes the month of your birthday, and ends 3 months after your birthday.
- Based on Disability:
- Disability Benefits: If you are under 65 and receiving Social Security Disability Insurance (SSDI) or RRB disability benefits, you are eligible for Medicare after a 24-month waiting period. You will be automatically enrolled in Medicare Parts A and B in the 25th month of receiving these benefits
- Special Conditions: For certain disabilities, the waiting period is waived:
- ALS (Amyotrophic Lateral Sclerosis): You are eligible for Medicare immediately upon receiving your first month of SSDI benefits
- End-Stage Renal Disease (ESRD): You are eligible for Medicare regardless of age, but enrollment is not automatic. You need to sign up for Medicare when you first become eligible
- Actively at Work - If you are 65 or older and still working, you may have employer-sponsored health insurance:
- If your employer has fewer than 20 employees, Medicare will generally be primary, and you should enroll in Medicare Part A and Part B during your IEP to avoid late enrollment penalties
- If your employer has 20 or more employees, the employer-sponsored plan will generally be primary
- You can delay enrolling in Medicare Part B without penalty if your employer has 20 or more employees
- you must enroll in Part B during a Special Enrollment Period (SEP) within 8 months after your employment or group health plan coverage ends to avoid penalties
- If you do not enroll in Medicare Part B when first eligible and do not have creditable coverage (such as through an employer), you may face a late enrollment penalty
- If you are not receiving Social Security or RRB wage benefits and are still working, you can apply online for Medicare only during your Initial Enrollment Period or during a Special Enrollment Period if you delay enrollment due to employer coverage
Enrollment Process:
- Automatic Enrollment: if you are receiving Social Security or RRB benefits before turning 65, you will be automatically enrolled in Medicare Parts A and B
- Manual Enrollment: For those not automatically enrolled, you can enroll online, by phone through the Social Security Administration (1-800-772-1213), or in person at a local Social Security office during the designated enrollment periods
Who Pays First??
- When individuals have Medicare coverage and other health coverage (i.e. employer-sponsored health coverage), Medicare Secondary Payer Act (MSP) coordination of benefits rules decide who pays first on a health care claim
The primary payer pays what it owes on a health care claim first. If the primary payer does not pay the health care claim in full, the claim is sent to the secondary payer to pay any remaining covered portion
The following chart summarizes Medicare's coordination of benefits rules for employer-sponsored health plans
Click HERE to access the official handbook "Medicare & You 2025"
This concludes our series on "Solving the Mystery of Medicare and Social Security." We hope the information has helped you and your employees better understand these benefits, enabling you to make well-informed decisions that will contribute to a secure and comfortable retirement.
Enroll Smart: Understand your Medicare Options
Knowledge is power ~ #TeamKoppinger