If I have a employer group health plan, do I need to sign up for Medicare Part B?
I lost my job when my company merged with another company. The merger triggered a set of Change-in-Control provisions that provided special benefits for employees who lost their jobs because of the merger. These benefits included a company-paid extension of my medical coverage under the company group health plan for 18 months. The level of coverage is the same as when I was an employee and the company's medical insurance remains my primary medical insurance. I am over 65 years old. Can I wait until the 18 months of extended medical coverage is over before I apply for Medicare B, or do I have to apply within 7 months of my job termination, as some Medicare brochures seem to indicate. If I am still covered by my company's group health plan, I don't see why I have to apply for Medicare B now, rather than 18 months later.
The answer depends on whether Medicare considers this special Change-in-Control employer-sponsored health coverage to be based on current employment or to be a kind of retirement plan. That's because of the wording of the Medicare rule concerning late enrollment in Part B. If you don’t sign up for Part B when you're first eligible, the cost (currently $96.40 per month for most people) goes up 10% -- permanently -- for each year that you could have had Part B but didn’t sign up for it. But, if you delay taking Part B because you or your spouse have group health insurance based on current employment, you don't have to sign up for Part B and don't pay the higher premium when you do. This does not apply, however, to health coverage provided as part of a retirement package.
If you have group health plan coverage based on current employment, you can sign up for Part B any time while you have the group health plan coverage, or during the 8-month period that begins the month the employment ends, or the group health plan coverage ends, whichever happens first. You can read more about these rules in the pamphlet Medicare & You 2008.
So, it comes down to an interpretation of whether your coverage is considered part of "current employment" or not. The first place to check is the benefits office at your former employer. They should be able to give you a specific answer to this question. If they do, ask them to give you a copy of the communication from Medicare, or the Medicare regulation, that establishes the specific Medicare Part B status of this Change-in-Control health plan. If they do not give you a satisfactory answer, you should set up an appointment at your local Social Security office (which handles Medicare enrollment) and ask them to get you Medicare's official position on this particular situation. If you do go to a Social Security office, do not settle for a general explanation of the rules from a Social Security interviewer. Instead, make sure to get a specific, written answer regarding your case.
Beware! If you are signed up with a retiree health plan through your employer, and you waive Medicare Part B, the retiree plan may still process your claims as if you have part B anyway leaving you with a gap in insurance! Ex. Medicare pays office visits 80% after a deductible. If you waive part B your retiree health plan may process your claim as if medicare had paid that 80% even though you don't really have Part B coverage. In the meantime as a penalty for waiving the Part B medicare may make you wait to sign up for coverage and apply a penalty by adding an additional 10% charge for each year you were eligible for part B coverage but declined it!