Can an employee drop employer's coverage, and take a Medicare advantage plan?

1 answer | Last updated: Sep 28, 2016
Kiersten asked...

Can an employee who is working full-time and becomes eligible for Medicare elect to drop the employer group coverage and pick up a Medicare advantage plan or supplement, Or are they required to stay on the group plan

Expert Answers

Neither Medicare itself nor an employment-based group health plan require you to keep the group plan instead of enrolling in Medicare -- either traditional Medicare plus a Medigap supplement or a Medicare Advantage plan. If you are enrolled in an employer-supported plan while you (or a spouse on whose work the group coverage is based) are still working, it makes sense to enroll in Medicare Part A because most people don't have to pay any premium for it, so there's no reason not to enroll; Medicare Part A would then cover inpatient health care costs not paid by the group plan. Some people with group coverage also enroll in Medicare Part B, paying the monthly premium for it in order to get extra coverage; if you do that, the employer-based group plan pays first, with Medicare Part B paying a portion of the costs that the group plan doesn't pay.

But most people do not need both Medicare Part B (or a Medicare Advantage plan) and employment-based group coverage. Many people just keep their group plan. However, because many employment-based group plans are more expensive than Medicare, or provide poorer coverage than Medicare does, people are allowed to drop the group coverage and enroll in Medicare A and B plus a supplement, or in a Medicare Advantage plan, instead.

Before you make the change, find out what the rules are concerning re-enrolling in the employer-based group plan if you later decide you want its coverage again. That's because you might enroll in a particular Medicare Advantage plan but find over time that you do not like its coverage, or its costs or participating physicians may change, or it may even end coverage in the geographic area where you live. So, it's a good idea to make sure that you could reenroll in your employment-based group plan if you decide to drop out of a Medicare Advantage plan. If reenrollment would be a problem, that may affect your decision about switching coverage.