Blog

Medicare vs work insurance as primary

Some people have insurance coverage through both their employer/group plan and through Medicare.  When this is the case, the question comes up about which is the primary insurance which is what we will answer for you in our Medicare vs work insurance as primary blog.

If you are 65 or over, eligible for Medicare, and have insurance through your or your spouse’s current job, you should still enroll in Medicare Part A.  For most people, Medicare part A is free.

In order to decide whether to take Part B (medical insurance), for which most people pay a monthly premium of $134 a month, you should ask your benefits manager or human resources department how your employer insurance interacts with Medicare  and confirm this information with the Social Security Administration (SSA). Be aware that when you qualify for Medicare, your employer insurance may start to work differently for you.  Your employer insurance may start to pay as the secondary insurance. This is usually the case for groups under 20 employees.  When you are over 65 and working for a employer under 20 employees you usually need to purchase Part B of Medicare in order maintain coverage.

As a first step, assess whether your employer insurance will be primary or secondary to Medicare.

• Secondary insurance:
•  pays all or some of the unpaid portion of covered health care expenses after the primary/main insurer has paid.  If your employer insurance will be secondary to Original Medicare, you should generally take Medicare Parts A and B when you are first eligible to enroll.
• Primary insurers pay first:
• Normally, you do not need Medicare Part B if you have primary employer coverage. You may decide to take Part B if you are unhappy with that coverage. This is usually for an employer group of 20 or more employees.  Before you decide to waive part B Medicare, you may want to evaluate which coverage is a better deal.

You qualify for a special election period when;

You are over 65 and getting coverage while working on your own or through a working spouses coverage.

If you drop the group health coverage or you or your spouse stops actively working.

IMPORTANT:  You have an 8 month period to enroll in Medicare part B.

Part B enrollment special election rules

Before you sign up for your Part B Medicare coverage there are some Part B enrollment special election rules that you need to understand.

You are not required to take Medicare Part B during your Initial Enrollment Period (IEP)  (the first of the month you turn age 65) if you are have insurance through work and either you and/or your spouse is still working.  You should only delay Part B if the employer insurance (called group health insurance) is the primary payer on your health care expenses.  This means that Medicare would pay secondary (after your group/employer plan pays). It is a good idea to talk with the employer or the HR department to see which is the primary payer. Usually the employer must have more than 20 employees in their plan in order for the plan to be considered the primary insurance . If you are eligible for Medicare because you get Social Security Disability Insurance, the employer must have more than 100 employees to be the primary payer.

When there are fewer than 20 employees at the company where you get your insurance, Medicare is likely your primary coverage. If this is the case, you should not delay your part B enrollment. If you do so, that can leave you without any insurance coverage at all.

In either case:

If you have insurance from a current employer, you remain eligible for a Special Enrollment Period (SEP). During this time, you can enroll in Part B without penalty at any time. This is true while you or your spouse is still working.  This is also true for up to eight months after you lose employer coverage, switch to retiree coverage, or stop working. However, if you have a lapse in coverage more than eight months at any time after you become 65 and Medicare-eligible, you will lose your SEP. A lapse means any period of time where you were not covered by either Part B or insurance from a current employer.

Part B enrollment special election rules- Cobra and retiree insurance

Important: Medicare DOES NOT consider COBRA or any retiree insurance the same as current employer insurance. If you are on either of these, you will not have a Special Enrollment Period to enroll in Medicare beyond the eight months you have after you retired/stopped working. If you have COBRA or retiree insurance and delay enrollment in Part B, you will likely have a Medicare Part B late enrollment penalty when you do sign up for part B

It important to note:

If you had already taken Social Security before you turned 65, or if you become eligible for Medicare due to disability, you will be automatically enrolled in both Medicare Part A and Part B. It is not mandatory that you take Part B.  If you decide not to take Part B, you will need to send back the Medicare card you received in the mail with the form you received stating that you do not want Part B. After you do this, you will receive a new Medicare card in the mail. The new card will have part A only on it and not part B.  You will not need to pay your Medicare Part B premium as a result.

If you are thinking about turning down Part B—or enrolling in only Part A it is advised you call the Social Security Administration at 800-772-1213 and ask if you delay enrollment will you be subject to the Medicare Part B late enrollment penalty.   Be sure to explain the type and source of your other insurance and other circumstances in as much detail as possible. When you call Social Security, make sure to write down whom you spoke to, when you spoke to them, and what they said. Remember you generally must be covered under a group health insurance plan which you have access to due to you or your spouse working in order to avoid the part B late enrollment penalty.

Medicare special election periods

Anyone that is currently enrolled in Medicare or that will be soon should be familiar withe Medicare special election periods.  The information in this post will explain about the Medicare special election periods.  Special election periods pertain to Medicare Advantage and Medicare stand alone part D rx plans.

Medicare special election periods for MAPD and Part D Rx plans

• You’re limited in when and how often you can join, change or leave a Medicare Advantage Plan (also known as a Managed Medicare plan or Medicare part C) or drug plan (Part D).
• You can enroll in a Medicare Advantage or Part D plan during the initial period when you first qualify for Medicare. (3 months before, the month of and 3 months after you are eligible for Medicare parts A and B.
• During the first 45 days of each year (the Medicare Advantage Disenrollment Period, called the MADP, January 1 through February 14), you can leave your Medicare Advantage Plan and change to Original Medicare with or without also selecting a separate stand-alone Medicare drug plan.  Please note: You can’t make any changes to your coverage during this period
  if you have Original Medicare. You also can’t switch from one Medicare Advantage Plan to another during this period.
• During Fall Open Enrollment, October 15 through December 7 of each year, you can change how you get your Medicare health coverage and enroll in, change or drop Medicare drug coverage.
• Outside of the above three periods, you can only change how you get your health coverage and enroll in, change or drop Part D drug coverage if you qualify for a Special Enrollment Period (SEP).

The link below will list all the Medicare special election periods. Some notable ones to pay special attention to are the SEP for moving out of the service area, losing group/employer coverage or losing or gaining prescription drug assistance and the MAPD Trial Right.

CLICK HERE FOR MEDICARE SEP CHART

Collecting Social Security Retirement and Working Penalties

This is an important post for everyone who is thinking about collecting their Social Security retirement.  You need to know about collecting Social Security retirement and working penalties.  If you receive early retirement benefits and continue to work, your Social Security payment may be reduced

In some cases, Social Security retirement benefits along with your savings and investments are not enough to live on comfortably.  Therefore, many people need to keep working for a few years after they claim early retirement benefits from Social Security.  Sometimes people decide to keep their job or take a new one in order to stay active and involved in the business world.

If you earn a high enough salary while you work, your lifetime earnings average can increase. This factor can increase your retirement benefit rate for the future.  However,  if you claim early retirement benefits and continue working,  once you earn over a certain amount annually, you may receive reduced  Social Security retirement benefits.  This  reduced rate can apply until you reach the full retirement age. The lower benefit amount will apply only during the years you continue to work.  This does not have a lasting consequence on the amount of  the benefits you receive for future payments.

Social Security subtracts money from your retirement payment if your annual earned income reaches a certain amount.  They can do this until you reach the full retirement age which is age 66 for most people

In 2017, the annual earned income limit is $16,920 which comes out to about $1,410 per month.  The amount of the annual earned income limit is adjusted up slightly every year. The benefits you receive from Social Security retirement are reduced by $1 for ever $2 you earn over the limit before you reach the full retirement age.   There is no limit on  the money you are able to earn once you reach the full retirement age.  This means that no matter how much money you make you will still receive your full Social Security benefit.

Collecting Social Security Retirement and Working Penalties

Please note; Social Security can withhold your monthly payments entirely until  you have paid the over the income limit penalty.  They do not reduce each monthly check by a small amount. However, if you are still working and lose your job, through no fault of your own, you can collect unemployment benefits.  You can collect your Social Security benefits as well as unemployment.

If you would like more details about how working can effect your Social Security benefits click here 

Special Rule as You Approach Full Retirement Age

There is a special exception for those that are making over the income limit in the year they turn their natural retirement age. If you will reach full retirement age in 2017, you may earn up to $3,740 per month without losing any of your benefits, up until the month you turn 66. But for every $3 you earn over that amount in any month, you will lose $1 in Social Security benefits. Beginning in the month you reach full retirement age, you become eligible to earn any amount without penalty.

Collecting Social Security Retirement and Working Penalties

Gaining Back the Reduction in Benefits From Working

The amounts of early retirement benefits you lose as a set off against your earnings are usually not  gone forever. When you reach full retirement age, Social Security will recalculate upward the amount of your benefits to take into account the amounts you lost because of the earned income rule. The lost amount will be made up on an annual basis until all penalized income is recovered.  Given it is only paid in small amounts, it could take up to 15 years to pay the money back.  Keep in mind, none of this readjustment will change the permanent percentage reduction in your benefits that was calculated when you claimed early retirement benefits (the early retirement penalty).

Medicare Advantage or Medicare Supplement Plan

Which is better, a Medicare Advantage or Medicare Supplement plan?  Medicare Supplements are also called Medigap plans.  This is a common question and the answer is “it depends”.  Medicare Advantage Plans and Medicare Supplement plans are very different.  They both have strengths and weaknesses.  The key is to know the difference between them as well as how they work with your situation.  We can start by pointing out how each plan works and how they are different.

Medicare Supplement plans

Medicare Supplement plans are private plans that insurance companies offer.  There are a number of different plans that range from A through N.  All have different benefit structures although they are standardized in most states. This means the benefits must be the same regardless of the company that offers the plan.  If 8 companies offer a plan N in a state, they must all have the same benefits. The only difference is price.

Medicare supplement plans are secondary to Original Medicare.  When someone goes to the provider, they show their Original Medicare card.  The provider bills the card and Medicare pays their portion of the benefits.  Your Medicare supplement company will receive a charge for the portion that is left over and they will then pay that portion. It is a very simply process and offers some big positives over an Advantage plan.  Below, we will list the advantages as well as disadvantages of using a Medicare Supplement.

• Advantages
  • No network. Since Original Medicare is primary, the person using a Medicare Supplement can go to any provider that accepts Medicare. The company offering the supplement makes no difference.
  • No Managed Care. This usually means you do not need to get prior authorization on services such as surgeries, major or advanced radiology, skilled nursing and other services.
  • You can determine the exact amount of Medicare coverage you want based on which supplement plan you choose.
• Disadvantages
  • Monthly premium. In addition to your monthly part B Medicare premium, you will also pay a monthly premium for the Medicare supplement.  Premiums can range from $35 a month to $270 a month depending on the plan and state you live in.
  • Medicare supplements do not include drug coverage.   Additionally, you must purchase a stand alone part D plan if you want drug coverage.

Medicare Advantage Plans

In fact, Medicare Advantage plans are also called MAPD’s, Medicare Replacement Plans and Managed Medicare Plans. Medicare Advantage plans are not secondary to Original Medicare.  The Medicare Advantage plan becomes the primary insurance.  The insured is still in the Medicare program but Original Medicare is not used for insurance. An advantage plan works in a similar manner to a group or individual health insurance plan. (they are not the same but have a similar set up.)  This means the client has set benefits which are in the form of co-pays and cost shares.  There are some major pro’s and Con’s with Advantage plans which we have listed below.

• Advantages
  • Advantage plans have little to no premium in most states.  The insured will still pay the monthly Medicare Part B premium of $134 a month, but there will be no additional charge for the advantage plan.
  • Advantage plans include a part D drug benefit.  There is no additional premium charge for the drug plan and you can use one ID card for both Medical and RX.
  • Advantage plans may have additional value added benefits that are not covered by Original Medicare such as; dental and vision benefits.
• Disadvantages
  • Advantage plans have networks.  On an HMO advantage plan you must stay in the network to have your expenses covered. (The exception to this would be emergency room visits and urgent care)
  • Advantage plans have co-pays which can lead to higher out of pocket costs.  The out of pocket max on many advantage plans is as high as $6,700.
  • Advantage plans have prior authorization requirements on some services.
  • Some advantage plans may require referrals to see a specialist.

Overall – Medicare Advantage or Medicare Supplement Plan

In general, someone with minimum health care needs may want to try an advantage plan.  They will not be laying out any premium on a monthly basis and will only pay a copay when they do see a provider.  If someone does not want to be limited by a provider network or if they utilize a lot of healthcare, they may want to consider a Medicare supplement instead. The supplement allows them to go to any provider they want (as long as they accept Medicare) and they can choose a plan that leaves them with very little out of pocket.  The negative is the premium they will pay for the supplement and Part D Rx plan regardless of if they utilize care or not.

Medicare Advantage Trial Right

A Medicare Advantage Trial Right can be a huge benefit to someone trying a Medicare Advantage plan for the first time. Unfortunately, most people do not know it exists. The Medicare Advantage Trial Right is applicable to those trying a Medicare Advantage plan for the very first time.  If you decide you do not want the advantage plan within the first 12 months, you have a trial right that lets you dis-enroll from the Medicare Advantage plan and switch back to the Medicare supplement plan you had previously.

This means that during the first 12 months of your Medicare Advantage Plan coverage, you can change back to Original Medicare, Part A and Part B, and get your Medicare Supplement plan back (if it’s still available). If your original Medigap plan isn’t available, you can use your trial right to enroll in any Medigap Plan A, B, C, F,G K, or L, M, or N that’s sold in your state.   You can make the change for the 1st of any month during the first 12 months.

This rule can be highly valuable

For those that want to try a Medicare Advantage plan with the ability to change if they do not like it. Medicare Advantage plans typically have a very low or even $0 monthly premium. Advantage plans are very different from a supplement.  Some folks may find they do not like them once they get into it.   Having this 12-month trial period allows people to try the Advantage plan out. No medical underwriting is allowed when using the Trial Right which means the insurance company must enroll you regardless of your health.

Under normal rules you would not be able to change from your advantage plan to a supplement until the Open Enrollment Period ,which allows for a January 1 change every year.  To learn more about the differences between a Medicare Advantage plan and a Medicare Supplement Plan CLICK HERE FOR AN ADVANTAGE VS. SUPPLEMENT COMPARISON

Please note that you can use a Trial Right regardless of when you first enroll in an Advantage plan. Some people may initially enroll in a Medicare Supplement plan and then decide to try a Medicare Advantage plan for the first time at age 68.  If it is the first time in an Advantage plan, they will have a 12 month Trial Right.

Medicare Advantage Commissions 2022

Learn about all the benefits Crowe and Associates offers to agents

Health Savings Account contribution limits 2018

This information is important to you if, you have a Health Savings Account.  You need to be aware of the Health Savings Account contribution limits 2018.

As a matter of fact, The amount that individuals may contribute annually to their health savings accounts (HSAs) for self-only coverage will rise by $50 next year. For HSAs linked to family coverage, the contribution cap will rise by $150.

In Revenue Procedure 2017-37, issued May 4, the IRS provided the inflation-adjusted HSA contribution limits effective for calendar year 2018.  They also gave the minimum deductible as well as maximum out-of-pocket expenses for the high-deductible health plans (HDHPs) that HSAs must be coupled with.

Catch up contribution provisions for those age 55 and older

Account holders who will be 55 or older by the end of year can contribute an additional $1,000 to their HSA.  If a married couple are both age 55 or older they may both contribute the extra $1,000. Please note: An HSA is in an individual’s name—there is no joint HSA even when the plan provides family coverage.  Therefore only an account holder age 55 or older can contribute the additional $1,000 in his or her own name.

[SHRM members-only HR Q&A: Are employer contributions to an employee’s health savings account (HSA) considered taxable income to the employee?]

Not All High-Deductible Plans Are HSA Eligible

Besides a high deductible, to qualify as an HDHP, a health insurance plan must not offer any benefit beyond preventive care before those covered by the plan (individuals or families) meet their annual deductible. “An otherwise high deductible plan fails the HSA qualification when it tries to be nice and it gives you some benefits before you meet the deductible.  For instance, if the plan provides coverage in the following areas before the individual or family satisfies their deductible, it is not HSA-eligible.

• Prescription drugs. Plans may not cover non-preventive prescription drugs with only a co-pay before an individual or family meets the annual deductible.
• Office visits. Excluding preventive care such as physical checkups or immunizations. Plans may not cover office visits with only a co-pay, without having to meet the annual deductible first.
• Emergency. Additionally, Plans may not cover emergency services with a co-pay outside the deductible.

Contributing to an HSA with Medicare A and/or B

There are a number of people age 65 and older still working.  If they have a HDHP at work they may be tempted to put money in an HSA.  Additionally, no one is eligible to contribute to an HSA account, if they are currently enrolled in Medicare A and/or B.  In fact, the only way to avoid this issue would be for the person to defer the A and B enrollment until a later date.

Obamacare Alternatives in CT

Today’s health insurance market has many looking for Obamacare alternatives in CT.

The federal government requires both Individuals and families to enroll in a qualified health plan.   In fact, those people who choose not to enroll will be subject to a tax penalty.

Access Health CT is the health insurance exchange for the state of Connecticut.  It is also called the state health insurance marketplace.  This site offers insurance options for every individual.  Although, some may qualify for reduced premiums, others may not.  Individuals as well as families looking for coverage outside of  Access Health will want to be sure that the option chosen meets the criteria to avoid a tax penalty.   Below are some options to explore.

Individuals not qualifying for a premium subsidy may choose to purchase traditional insurance directly from an insurance company.  Click here to learn about traditional health insurance plans available in CT.

Another option would be to enroll in a health share plan.  These are not traditional insurance plans, but do work in a similar fashion.  Individuals and families enrolled in a health share plan are exempt from the tax penalty.  Click here to learn more about Altrua Health Share plans.

A third option applies to self-employed  business owners.  Click here to learn more about low cost health insurance plans available in CT.

No matter which route you choose, Crowe and Associates offers the expertise required to navigate the process.  We can answer your questions and advise you which option is best suited for you and your family.  Please email us at Admin@CroweAndAssociates.com or call us at 203-796-5403 to schedule a personal and confidential evaluation.

Guaranteed acceptance term and permanent life insurance

If you are unsure about acceptance for life insurance, we have the answer for you!  It is called Guaranteed acceptance term and permanent life insurance.

We list below some of the differences between guaranteed acceptance term insurance and permanent life insurance

Applying for Medicare in Connecticut

This post will try and give you some help when you are applying for Medicare in Connecticut.  This can be overwhelming for some people.  We want to make it easy for you.  If you are 65 years old, or are under 65 and qualify for Medicare because of a disability or other special circumstance, you are eligible for Medicare.  (Note:  You must be a US citizen or a legal resident for at least 5 consecutive years to be eligible for Medicare.)

Apply for Medicare can be done online by CLICKING HERE.  You can also enroll by phone at 1-800-MEDICARE.  Or, you can enroll in person at your local social security office.  You can call 1-800-772-1213 for help locating your local social security office.

Click here for more details regarding choosing a Medicare plan in CT.