February 9th 2024
By Ari Parker
Learn about how insurance pays for your medical bills when you have both Medicare and employer insurance at the same time.
Your eligibility for Medicare starts at the age of 65. Some people choose to retire at 65 or earlier, while some work past the age of 65. If you do choose to keep working after 65, you may want to continue your health insurance coverage through your employer. But the question remains: can you have Medicare and employer insurance at the same time?
Yes, you can. Both your Medicare insurance and employer insurance can work together to ensure that you have comprehensive coverage. That said, you may not want to pay the monthly premiums for both. Read on to learn how both coverage options can benefit you, and how to choose the best healthcare option if you’re still working.
You can have both Medicare and employer insurance at the same time.
It’s very popular for people to have Medicare Part A alongside their employer coverage because Part A is free for most.
The insurance that is responsible for paying the majority of medical charges depends on how many employees work at your company.
If you work for a small company with less than 20 employees and you still have employer coverage, you can face penalties for not signing up for Medicare on time.
Medicare works with other types of coverage you have to pay for healthcare costs. Each type of coverage you have is called a “payer.” Medicare is a payer and your employer insurance carrier is a payer. When you have Medicare and employer insurance, you’ll have a primary payer and a secondary payer. There are a set of rules called the “coordination of benefits” that determine which insurance provides coverage as a primary or secondary payer.
A primary payer is the insurance that pays first when you have a medical bill. The secondary payer covers medical charges if there are costs that the primary insurer didn’t cover. A few notes about the responsibilities of primary and secondary payers:
Secondary payers may not pay all the remaining costs of a medical charge.
If your employee insurance is the secondary payer, it’s very likely that you’ll need to enroll in Medicare Part B before the insurance provides coverage.
Medicare and your employer’s insurance work together to help pay a bill. There could be an instance where your insurance is the primary payer and doesn’t pay a claim promptly. In this case, Medicare could pay the bill for the time being and then contact the provider to be reimbursed.
If you have insurance through your employer, there are certain situations where Medicare will pay for a medical cost as a primary or a secondary payer. The size of the company you work at is the primary factor that determines who pays and when. Here are the different circumstances you could encounter:
If the company you work for has less than 20 employees: Medicare pays as the primary payer, and your employer health insurance pays as the secondary.
If the company you work for has more than 20 employees: Your employer health insurance pays as the primary, and Medicare pays as the secondary.
If you are self-employed and you have more than 20 employees, your employer health insurance pays as the primary, and Medicare pays as the secondary.
These rules could change depending on your specific situation. You can always check with your Medicare plan or your employer health insurance plan to check who is responsible for coverage.
Yes, you can have Medicare Part B and employer insurance at the same time. If your employer insurance is a secondary payer (and it would be if you work for a company that has less than 20 employees), then you’ll likely need to sign up for Medicare Part B. This way, Medicare would cover most of the charges.
You may still have to enroll in Medicare even if you have employer insurance. This applies mainly to people who work at a smaller company. Knowing when to enroll in Medicare is crucial—losing coverage from your employer is a common way that beneficiaries face penalty fees.
Many people don’t know that they have to sign up for Medicare during their Initial Enrollment Period if they work for a company that has fewer than 20 employees. You can face Part B penalty fees if you don’t sign up during this time.
If you work for a company that has more than 20 employees, you can delay enrollment and sign up when you retire or lose employer coverage using the Part B Special Enrollment Period. In this situation, you won’t have to pay any late enrollment penalties.
We don’t recommend it, but you don’t have to enroll in Medicare at all. You’ll have to withdraw from any Social Security or Railroad Retirement Board benefits. You’ll also have to repay the benefits you received until your withdrawal.
Technically, you’re never required to enroll in Medicare—although it’s recommended, and most people do enroll! If you’re still working and like your employer insurance, you probably don’t want to pay two sets of monthly premiums. If you plan to enroll in Medicare once you retire and your employer has 20 or more employees, you can delay enrollment without penalty.
Though you can have Medicare and employer insurance at the same time, it’s always a good idea to weigh your options. Sometimes you’ll find that Medicare saves you a lot of money on health insurance compared to the plan you have with your employer.
Talking to a licensed Medicare Advisor can help you choose the best plan for you. We’ve saved retirees thousands of dollars by helping them switch to a plan that better suits their health and financial needs. Save on your healthcare by calling us at 855-900-2427 or scheduling a time to talk. Our advice is always free and tailored to your unique situation.
