Full-Time Employees Considering Medigap

By Melissa A. Brown
eMedicareSupplements Contributor

Many seniors wonder when — or under what circumstances — should someone who is actively employed full-time choose to drop their group plan and opt for a Medicare supplement plan.

Individuals who are employed full-time have the same rights concerning Medicare and Medicare supplements as retirees do, so eligibility for an employee is the same as that of a beneficiary. But an employed individual has some important factors to consider before switching to Medicare that do not apply to a non-working or retired beneficiary.

They may choose to drop their current coverage entirely and only use their Medicare coverage, or they may keep their group coverage and rely on Medicare to cover what is not covered by the other policy. In making this decision, they need to consider the coverage offered by each form of insurance, the premiums involved, the likelihood of premium increases in the future, how long group coverage will last and the potential penalty for not enrolling early in a Medigap plan.

If a Medicare beneficiary with Medicare supplements is offered group insurance, it can be important to consider taking this insurance because it may not offered again. Likewise, employees who drop group coverage may not be able to get that coverage back. But if they are required to pay part of the employer's premium, it may not be to their advantage to take the insurance, so careful consideration is required before making a decision.

If an individual keeps the employer’s group coverage, usually the group plan must pay a claim before Medicare will cover what is left. Figuring out which plan must first pay claims can get more complicated for people in special circumstances, such as retirees with group health insurance, people under 65 who qualify for Medicare because of a disability and people who have enrolled in Medicare due to End-Stage Renal Disease.

The Centers for Medicare and Medicaid Services offers a helpful publication that shows how Medicare works with other forms of insurance called Who Pays First?. This is excellent reading for anyone trying to decide between group coverage and a Medicare supplement plan.