13.12 Relationship with Medicare

If an individual is age 65 or older and remains actively employed, Medicare typically serves as secondary coverage to the employer-sponsored group health plan in which the individual is enrolled.

• A group health plan with 20 or more employees is considered primary to Medicare and is responsible for paying benefits first.
• If the employer’s group plan does not cover the full cost of services, Medicare may pay secondary benefits for eligible services to supplement the remaining balance.
• Employers with 20 or more employees must offer the same health benefits, under identical terms, to employees age 65 and older—and to spouses age 65 and older—as they do to younger employees and spouses. Employees who are disabled and eligible for Medicare must also be offered coverage on the same basis as all other employees.
• A Medicare carve-out coordinates an employer-sponsored retiree plan with Medicare Parts A and B. Under this arrangement, Medicare serves as the primary payer, and the employer’s plan supplements benefits up to the limits specified in the group policy.