When multiple insurance companies are involved, one becomes the primary, or first to pay, and one becomes the secondary, paying after the primary has paid its share of the costs. This is often a beneficial relationship to the insured, who has extra help paying for costs beyond the primary insurance. Not all costs may be covered after both insurance companies have paid, so you should be prepared to cover a portion of costs even with this extensive coverage.
For Medicare, which insurance pays first depends on the size of the company. For larger employers, Medicare pays second. For smaller employers, Medicare pays first. There are certain conditions where this is not always the case.
Large Employers
Medicare acts as a secondary insurance to large employers of 20 or more employees. The group health plan pays first, then the rest of the bill is sent to Medicare. Medicare will pay based on the group health plan’s payment, what the group health plan allowed, and what the healthcare provider charged on the claim. Any remaining costs leftover after your group health plan and Medicare have paid will be at your expense.
Small Employers
Medicare pays first for employers with fewer than 20 employees and that are not a multi-employer or part of a multi-employer group health plan. Multi-employer group plans are formed by union groups that join other employers or employee organizations to sponsor a health plan. If one of the other employers in a multi-employer group has 20 or more employees, Medicare will pay second. Your plan can apply for an exception to not be part of the multi-employer group health plan. Check with your plan to see whether they or Medicare will be the primary insurance.
If 65+, Retired, With Coverage From Spouse’s Employer
If your spouse is still working and has group health coverage from a large employer (of 20 or more employees), you are retired, and you have coverage from your spouse’s plan, Medicare will pay secondary to the employer coverage.
If Under 65, Disabled, Retired, with Coverage From Former Employer
Medicare will pay first (primary) and your group health plan coverage will pay second if you are not currently employed and receive coverage from your former employer.
If Under 65, Disabled, Retired, with Coverage From Family Member Employer
Medicare will pay first for companies with fewer than 100 employees that are not part of a multi-employer group health plan. For companies smaller than 100 employees with a multi-employer group health plan, Medicare pays second. Medicare is secondary insurance to large employers of 100 or more employees.
If your group health plan has a network of providers (as is common with Health Management Organizations and Preferred Provider Organizations) and you receive care or services outside of the plan’s network, it is possible that none of the insurance companies will pay for the service. You would then be responsible for the full cost. Before you receive care outside of your network, check with your plan to see if it could be covered.
For more information regarding Medicare and employer insurance, reach out to Cornerstone Senior Advisors today!