Question: As a small group health plan in PA (less than 20 employees), employees/dependents age 65 over increase my premiums substantially. Because of my group’s size, is it legal to offer incentives to entice them to go off the group plan and onto Medicare at age 65…or simply not offer coverage to those actively at work age 65+ since they have other options and the younger employees don’t.

Answer: This one comes up often so I’m going to quote chapter and verse:

“Medicare beneficiaries are free to reject employer plan coverage, in which case they retain Medicare as their primary coverage. When Medicare is primary payer, employers cannot offer such employees or their spouse’s secondary coverage for items and services covered by Medicare. Employers may not sponsor or contribute to individual Medigap or Medicare supplement policies for beneficiaries who have or whose spouse has current employment status.” (Excerpt from CMS Medicare Secondary Payer Manual, Chapter 1, (Rev 34,09-07-05)).

If an employer offers a Medicare beneficiary an incentive, financial or otherwise, not to enroll in the group, the health plan is subject to a civil money penalty of up to $5,000 for each violation. In addition, an excise tax could be applied that would equal 25% of the plan’s expenses incurred during the calendar year. This applies to all groups -large and small.

Question:I have a high deductible Med Supp plan. My health is declining, can Im switch to a comprensive Med Supp Plan during open enrollment without penalty?

Answer: You can apply to switch to a different Medicare supplement plan at anytime of the year. However pre-existing conditions would be considered. In California you are guaranteed to switch to a like for like or lesser plan from any carrier during your birthday month. However, if you want to move to a more comprehensive MedSup plan (considered an upgrade) your health history will be considered and you could be denied the plan change. But it is not too hard to qualify for a supplement plan even for those with pre-existing conditions. One carrier will take people as long as they have not been in the hospital 90-days prior to applying.

A Medicare Advantage Plan would be more comprehensive coverage than your current Original Medicare and a High Deductible Supplement. The Medicare Advantage and Part D Prescription Drug Open Enrollment is between 10/15-12/07. During this time, you will qualify regardless of pre-existing conditions other than End Stage Renal Disease.

Question: I’m approaching at 65 and my employer is strongly encouraging me to cancel my group coverage and elect Medicare coverage only. Can they do that?

Answer: Yes, your employer can “strongly encourage” you to take Medicare coverage when you become eligible. It’s important that you understand that your employer has been paying at least $500 a month to provide health insurance for you. Medicare will cost $100 per month. Perhaps you could negotiate a reimbursement for the Medicare Part B premium of $100 and an additional $130 - $150 per month for a Medicare Supplement - total cost to your employer is $250 per month and you get virtually 100% coverage. This advice applies only to group health plans with less than 20 employees where Medicare is the primary payor and the group health plan is secondary.

In larger groups, Medicare is the primary payor and there are rules that forbid employers from targeting Medicare-eligible employees by providing incentives (financial or otherwise) for them to drop employer coverage in favor of Medicare. As one of our readers, Chris Anderson of Sylmar, CA, pointed out: “The Centers for Medicare and Medicaid Services (CMS), formerly known as the Health Care Financing Administration (HCFA), has confirmed this prohibition many times, and employers should note that CMS may assess a penalty of up to $5,000 for each violation. An employer cannot offer, subsidize, or be involved in the arrangement of a Medicare supplement policy where the law makes Medicare the secondary payer. Even if the employer does not contribute to the premium, but merely collects it and forwards it to the appropriate individual’s insurance company, the GHP policy is the primary payer to Medicare.”

Question: I am turning 65 and work half-time. I am not eligible for health benefits, so I am on my wife’s policy. It is at a state university and it is through Anthem. Will I be able to continue on her policy, or will Anthem kick me out?

Answer: When you turn 65 you have health insurance available. It’s called Medicare. Your wife’s employer is no longer obliged to offer you coverage as a dependent on her employer-sponsored policy. Medicare is excellent coverage and it’s available to you for less than $100 per month. Anthem will not “kick you out” because they collect a nice piece of change from your wife’s employer as long as you remain on the group plan. Do the right thing and opt for Medicare.

Question: Will I be able to keep major medical insurance if i am not employed or being offered group insurance after the age of 65 if i only have an individual policy?

Answer: Yes. You can keep your individual health insurance after age 65. However, you would be wiser to take Medicare coverage (assuming you qualify). Medicare coverage is more comprehensive than most individual health insurance plans and the cost of Medicare coverage would be a small fraction of the cost of a private plan post 65.

Question: Can an HRA reimburse employees for Medicare premiums?

Answer: Yes. In 2002, the IRS issued Notice 2002-45 and Revenue Ruling 2002-41 that opened the door for employers to legitimately reimburse non-group health insurance premiums to their employees as a tax-free fringe benefit. When an HRA is combined with non-group health insurance, including MediCare, the HRA can reimburse the employees’ premiums. The HRA and high deductible individual health insurance combination is absolutely the cheapest health plan available today.

Question: I have prescription drug coverage under Medicare and will be hitting the "doughnut hole" pretty soon. What will the new healthcare bill help me pay for my drugs?

I'm signed over my Medicare to Secure Horizons, which I like. I heard these type plans are to be cancelled by the new healthcare reform?

Question: I am retired and on Medicare with a BC/BS Medigap policy which continues to be administered by my former employer. I pay about $100/month for this coverage. If my previous employer discontinues this insurance, will I have the same COBRA-HIPPA options for continuation of the MediGap coverate that apply in layoff situations to persons who are not yet eligible for Medicare?

Question: I was informed that Medicare would no longer cover my grandson (age 3) because I'm not his legal guardian anymore- but he and his father live with me and (father) cannot afford health insurance. Will this insurance cover my grandson?

Question: Is it possible for me to get medicare supplement insurance? I am 62 and had lukemia which is why i have medicare in the first place.