When employees with a group health plan through their employer become eligible for Medicare, they may keep their group health plan as long as they continue to meet whatever requirements the employer has for the plan. They are also free to defer Medicare enrollment or reject the group health plan. If they decide to keep both, there will be multiple payers.
According to the U.S. Department of Health and Human Services (HHS), the group health plan will pay first in most situations. The group health plan is first payer for people ages 65 and older who are currently employed or have a spouse of any age who is currently employed, or if their employer has 20 or more employees and covers the same services as Medicare. Once the group health plan has paid its share, the doctor or provider will send the bill to Medicare, where it will be reviewed and Medicare will pay a Medicare-approved amount. If the costs exceed this, employees will have to pay out of pocket.
Although Medicare generally pays first if a company has fewer than 20 employees, this changes if an employer joins with unions or other employers to offer a group health plan and one of the other organizations has more than 20 employees. Occasionally, companies are allowed to bypass this rule.
Medicare is first payer if an employee drops or decides not to partake in an employer’s group health plan, unless the employee is covered through a spouse’s plan.
For Medicare recipients who are 65 years old or younger with disabilities, the rules are different.
Medicare is generally first payer for recipients with non-end-stage renal disease (ESRD) who work for an employer that has fewer than 100 employees. If the organization has more than 100 employers, the employee is part of a large group health plan, therefore Medicare pays second.
If a recipient is 65 years old or younger and qualifies for Medicare because of ESRD, the group health plan is the first payer for the first 30 months the employee is available for Medicare. When the period has ended, Medicare becomes first payer.
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