Medicare Vs Group Health?

When a church has a group health plan and an employee is ready to turn age 65, a common question is: should they stay on the group plan or go to Medicare? The reality is…it depends.

• If your employer size is 20 employees or less, Medicare will automatically become the primary insurer for anyone 65+ and your group coverage will become secondary. This means your group plan will only cover eligible expenses in excess of what Medicare covers. In this case, employees nearing 65 generally should apply for Medicare so it is effective for them in the month they turn 65, and they avoid any potential late enrollment penalties. Moving to Medicare can also have a significant positive impact on the costs of the group coverage to the church by moving the 65+ individuals off the group plan. Due to the group coverage being secondary behind Medicare, it is generally not advantageous for the 65+ employee to remain on the group coverage.      

  
  

• If your employer size is more than 20 employees, employees turning 65 can defer applying for Medicare without penalty, and remain fully covered under the employer group plan if they choose. The employer sponsored group coverage in this case remains primary. Under this scenario employees 65+ can elect to move to Medicare at any time without penalty as long as they have maintained coverage under the employer plan up until the transition date.      

Interested in learning more? We’re here to help.

BMA Financial Insurance Services is your trusted partner that can help bring clarity and understanding to whatever your situation may be. Let us help explain your options. Our focus is on educating our churches and pastors to help them make well informed decisions about these very important topics.  

BMA Financial Insurance Services is your trusted resource. Let us serve you today!  

Mark Bradley

BMA Financial - Insurance Services

501.499.4205

mbradley@bmaamerica.org

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