Part B Delayed Enrollment Penalty Question

[Stephen]

We are obviously all aware that the size an employer group determines if Medicare is the primary or secondary payor, depending on if the employer has more or less than 20 employees.

Today, someone told me that if you are covered by an employer group with less than 20 employees (which makes Medicare the primary payor) that you also cannot delay Part B without incurring a penalty.

There aren't any questions about employer group size on Form CMS L564 (request for employment information when applying for Medicare Part B), and I can't find anything sourced back to Medicare that jives with that statement such as the Medicare and You Handbook, website etc..

What I have found is several articles by elder law attorneys and AARP that state that this particular situation does call for a delayed enrollment penalty.

Can anyone shed light on this for me?

 

[G.Gordon]

If Medicare is not primary (sub 20 emp group) then part B is needed. Without it their insurance at work is basically useless.

As a matter of CYA, I tell all working prospects to "ASK YOUR HR/BENEFIT PERSON", exactly this: Do I need part B as long as I'm working and on the company's plan? That answer is never wrong and takes the monkey off your back.

I've had clients think they work for a large company, but in reality the employer is a stand alone subsidiary of the mother company and not considered a "large employer".

 

[midwestbroker]

Gordon nailed it...I always advise my clients to call their benefits administrator as if they can delay Part B of Medicare. They will need a letter of credible coverage from the employer and that is who they will get the letter from.

Plus, it takes any potential blame / E&O claim from you should the information be inaccurate. I have made the above phone call numerous times with my clients right there.

 

[NYBernie]

Great info all, thanks!

 

[yogooglethis]

Gordon nailed it...I always advise my clients to call their benefits administrator as if they can delay Part B of Medicare. They will need a letter of credible coverage from the employer and that is who they will get the letter from.

Plus, it takes any potential blame / E&O claim from you should the information be inaccurate. I have made the above phone call numerous times with my clients right there.

If it's a mom and pop small business you definitely want to be on that call to HR Dept because the HR is going to be either mom or pop.the last thing you want is for the client to ask the owner of the business without you there because many times the owner or book keeper will not have a clue and recommend that the employee calls the agent who sold them the small group plan to find out the answer because they probably sell MA too.

 

[Stephen]

If Medicare is not primary (sub 20 emp group) then part B is needed. Without it their insurance at work is basically useless.

This is the discrepancy that threw me off. Arkansas Blue Cross dominates the market here in our fine state, and their position is that they will pay as primary on outpatient services if the member delays Part B, even if the group is under 20 and isn't subject to that specific ERISA requirement.

I called UHC and Qualchoice, and both of them will only pay only as secondary. So my guess is that what I see on a day to day basis here in Arkansas is quite different than what other agents across the country generally encounter.

 

[kstein]

In regards to under 20, I'd say the norm now is that medicare and supplement or ma is probably a better overall deal vs the employer plan (ie lower premium,deductible) plus they are swimming the same direction as most other people on Medicare so there is less confusion at the doctor office.

This is even more consistent if it is a spouse on a small biz group.

 

[yogooglethis]

This is the discrepancy that threw me off. Arkansas Blue Cross dominates the market here in our fine state, and their position is that they will pay as primary on outpatient services if the member delays Part B, even if the group is under 20 and isn't subject to that specific ERISA requirement.

I called UHC and Qualchoice, and both of them will only pay only as secondary. So my guess is that what I see on a day to day basis here in Arkansas is quite different than what other agents across the country generally encounter.

Even if they do the employee most likely the employee won't be exempt from the late enrollment for part B.Another thing to consider is the group plan is paying commercial insurance rates so if the insured is responsible to pay 20% for OP,Diagnostic services etc. up to the MOOP an MRI for example at 20% on their group plan may cost them 300-400.00 whereas as Medicare beneficiary they would pay about 100.00 for the 20% for an MRI under the Medicare allowable rates.Of course if group plan has deductible,which most do, they have to pay 100% of the cost at commercial rates for Op,diagnostics, rehab etc services until they reach deductible.Most people don't factor this in when comparing their group coverage with the individual Medicare Health plan options.



Which insurance pays first | Medicare.gov

 

[Stephen]

Even if they do the employee most likely the employee won't be exempt from the late enrollment for part B.


Which insurance pays first | Medicare.gov

Thank you for circling around back to the original question. Where does Medicare state that employer group size effects the Part B delayed enrollment penalty?

 

[yogooglethis]

Thank you for circling around back to the original question. Where does Medicare state that employer group size effects the Part B delayed enrollment penalty?

Medicare Interactive - Enrolling in Medicare Part B if you are 65 or older, still working (or spouse is still working) and have insurance from that job