If they've got creditable coverage, you can stick with your insurance plan

You already know you can depend on your spouse, but can you rely on their private healthcare plan to be there for you? If your spouse is still working, you might be confused about your needs as you become eligible for Medicare. Read on to see what rules to follow with regards to creditable coverage, including when to switch from your spouse's private health insurance to Medicare.

First Rule of Thumb

The first rule of Medicare and private insurance is an easy one: if you’ve got creditable coverage, you don't need to sign up for Medicare. For a deep dive on creditable coverage, check out our article here. Your spouse's private insurance coverage is creditable if they work for a company with at least 20 employees. When weighing your options, your first question should be the size of the company providing your insurance. If your spouse works somewhere with less than 20 employees, it’s important to ask their HR representative if the insurance is creditable. If you don’t have creditable coverage, you should apply for Medicare Part A and Part B. And if you decide at any point that private insurance is not a good fit for you anymore, you can always shop for Medicare once you're eligible. Fair Square Medicare is the place to find your best plan. For now, all you need to know is if you have creditable coverage, stick with it.

Primary vs. Secondary

Once you’ve answered the first question, consider whether your insurance will pay primary or secondary. 

If your private insurance is paying primary to Medicare, Medicare pays secondary and is supplementing your employer insurance. For whatever healthcare costs pop up, your insurance takes the first swing, and if anything is leftover, Medicare comes in to cover the rest. Remember that Medicare will only pay for things covered by Medicare.

If Medicare pays primary, your health insurance pays secondary and is left to cover whatever Medicare will not. People often elect to sign up for Part A of Medicare even if they have creditable coverage. That's because it's free (as long you or your spouse have paid 40 quarters' worth of social security taxes) to get more secondary coverage.

Group Health Plans

When your spouse's company has 20 or more employees, that’s considered a Group Health Plan (GHP), and your insurance will pay primary. In a Small Group Health Plan (SGHP) with less than 20 employees, your insurance will pay secondary to Medicare, so you need to sign up for Parts A, B, and likely D if Medicare is meant to pay primary.

Note: If you are under 65 and eligible for Medicare due to a disability, the number used to determine primary vs. secondary coverage jumps up to 100 employees. A plan with over 100 employees is considered a Large Group Health Plan (LGHP).

Coordination of Benefits

The way your Medicare plan and your GHP might work together to share costs is called the Coordination of Benefits. There are systems in place that work to ensure your healthcare claims are being billed in the right order, but it’s still important for you to know how to apply these rules to your situation in case any claims are disputed. If you have any questions about the Coordination of Benefits for your situation, you can call us at 1-888-376-2028, and you can also call the Benefits Coordination and Recovery Center (BCRC) at 1-855-798-2627.

What about your prescription drug coverage?

The same rules apply; if you have creditable coverage through your spouse's private insurance, then you do not need to sign up for a Part D Prescription Drug plan. Other Medicare beneficiaries might incur a Late Enrollment Penalty for either Part B or Part D. But as long as you have creditable coverage, you have a special enrollment period of 63 days after your coverage ends to enroll without penalty.

What if you or your spouse have a retirement plan?

Medicare also pays primary to retirement plans. 

• If you’ve got a retirement plan, your spouse’s GHP, and Medicare, it pays as follows:

  • 1. GHP

  • 2. Medicare

  • 3. Retirement Plan

If your retirement plan includes creditable drug coverage, you have a special enrollment period of 63 days after your coverage ends.

Takeaway

Suppose you have creditable coverage and your plan suits your needs. In that case, you do not need to enroll in Medicare Part B. Talk with your health insurance plan provider for more details about your specific circumstances and your coordination of benefits. For all your Medicare-related questions, we have a team of experts ready to help you get the coverage you need. Give Fair Square Medicare a call at 888-376-2028.