Medicare FAQs
As part of our focus on total wellness at Essex, our goal is to provide our associates with tools to help make informed decisions for you and your family. As you, your spouse, or another family member approach age 65 learning about Medicare can help you understand what options are available. The decision to apply or not for Medicare is a personal matter that depends on many factors.
We’ve prepared a list of FAQs (Frequently Asked Questions) that are meant to provide some high-level answers to common questions you may have as you start your research into whether Medicare is right for you and your family.
Table of Contents
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1. What is Medicare?
2. When do I apply for Medicare vs. being automatically enrolled?
3. I currently have coverage under Essex’s medical plan. Do I need Medicare?
4. How can I delay taking Medicare?
5. What are the Medicare Enrollment Periods?
6. Can I drop Medicare if I go back to work?
7. What happens if I drop my employer insurance?
8. When is my employer insurance primary?
9. When is Medicare primary?
10. How will my employer-based coverage change when I turn 65?
11. I have drug coverage through Essex. Do I need a Part D prescription drug plan?
12. What should I do if I terminate my employment or drop my employer coverage?
13. How does Medicare work with COBRA?
14. What do I need to know about Part C (Medicare Advantage)?
Resources
1. What is Medicare?
A: Medicare is a federal health insurance program run by the centers for Medicare and Medicaid services (CMS) for people 65 or older, people under 65 with certain disabilities, and people of any age with End-Stage Renal Disease (ESRD) (permanent kidney failure requiring dialysis or a kidney transplant). Medicare has four Parts (A, B, C, and D)
- Part A is Hospital Insurance including: hospital, skilled nursing facility, home health, and hospice services.
- Part B is Medical Insurance covering: doctor visits, outpatient services, preventive services, lab tests, ambulance services, medical equipment and supplies.
- Part C is Medicare Advantage which allows private health insurance companies to provide Medicare benefits. Part C is basically Part A and Part B provided through a Medicare-approved private insurance company.
- Part D is Prescription Drug coverage.
2. When do I apply for Medicare vs. being automatically enrolled?
A: You will automatically be enrolled in Medicare Parts A and B when you turn 65 or on your 25th month of disability if you are already receiving Social Security benefits when you become eligible for Medicare and have enough work quarters. You will need to apply for Medicare if you are not yet collecting Social Security benefits when you turn 65 or decide to delay taking your benefits past your retirement age (usually because you are still actively employed). You may delay enrolling in Medicare (see next two questions) if you or your spouse is actively working.
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3. I currently have coverage under Essex’s medical plan. Do I need Medicare?
A: If you currently have active coverage through Essex, then you can wait to sign up for Part A, B & Part D (if enrolled in Creditable employer options). This is because your employer insurance will still be your primary payer. You will be given a Special Enrollment Period (SEP) to enroll in Part A and/or B without penalty while you’re still working and for up to eight months after you retire or lose your current employer coverage. It’s important to enroll early so you do not have any periods of time without coverage.
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4. How can I delay taking Medicare?
A: Most people who continue to be actively employed past age 65 take Medicare Part A since it is premium free. You don’t pay a monthly premium for Part A coverage if you or your spouse paid Medicare taxes while working.
To delay Part B if you were auto-enrolled, fill out the back of your Medicare card and mail it back to SSA. Medicare will send you a new card with only a Part A effective date.
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5. What are the Medicare Enrollment Periods?
A: Part B Enrollment Periods
1. Initial Enrollment Period (First time you are eligible for Medicare)
- 3 months before, and up to 3 months after your 65th birthday (7 months total).
2. Special Enrollment Period (SEP) (Period after you’ve lost your group health coverage based on being an active employee)
- 8 Months from the date your medical coverage ends.
3. General Enrollment Period
- Jan 1 – March 31 of each year: Coverage begins July 1.
If you did not enroll when you were first eligible, a penalty of 10% for each full 12 months you were eligible but did not enroll is assessed to your Medicare Fees unless you can show you were covered under an employer’s active plan.
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6. Can I drop Medicare if I go back to work?
A: As long you are currently working you can drop Medicare. However, since this is a serious decision, you will need to have a personal interview with a Social Security representative first.
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7. What happens if I drop my employer insurance?
A: If you choose to drop your current employer insurance and you already have Medicare, Medicare will become your primary insurance. If you do not have Medicare and drop your employer insurance, enroll in Part A (if needed) and Part B before your employer coverage ends to avoid any gaps in your coverage.
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8. When is my employer insurance primary?
A: If you are 65 or older, your employer insurance is primary (pays first) if it is from your or your spouse’s current job at a company with 20 or more employees. If you qualify for Medicare because of a disability and have insurance through your employer or a spouse or family member’s employer, your employer insurance is primary if the company has 100 or more employees. Different rules apply if Medicare eligibility is based on ESRD.
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9. When is Medicare primary?
A: Medicare is primary if you have COBRA or retiree insurance. Medicare is also primary if you are 65 or older and there are fewer than 20 employees (fewer than 100 employees if you are receiving SSDI) at the company where you currently work.
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10. How will my employer-based coverage change when I turn 65?
A: If you are still working when you turn 65, your employer insurance may look the same but function differently. If you work at a company with fewer than 20 employees, your employer insurance will become secondary and Medicare becomes your primary insurance, often this is the case whether you are enrolled in it or not.
If Medicare is primary and you do not sign up for it, it is as if you do not have any insurance. If you work at a company with 20 or more employees (100 or more employees if you are under 65 receiving SSDI), then your employer insurance is primary and you can delay enrolling in Medicare.
If you are retired, your retiree insurance will be secondary to Medicare.
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11. I have drug coverage through Essex. Do I need a Part D prescription drug plan?
A: If you have drug coverage from an employer, and it is Creditable drug coverage (meaning it is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage), you do not have to enroll in Part D when you first become eligible for Medicare. Essex’s drug coverage is considered Creditable as it’s at least as good as a basic Part D prescription drug plan. It is important to review Essex’s drug coverage status each year.
If you have Creditable drug coverage from an employer, you have a Special Enrollment Period to enroll in Part D later without a penalty if you lose that coverage or decide to drop it. You can use this Special Enrollment Period to enroll in a Part D plan at any time while you have drug coverage from your employer and for up to two months after you lose coverage (63 days).
You should get a letter from your current drug plan every year stating whether or not the drug plan is Creditable.
It’s important to know that for Medicare purposes, the term “Creditable” only applies to drug coverage, not health coverage. Having Creditable coverage does not give someone a Special Enrollment Period to enroll in Part B. Having current employer insurance is the only way to get a Part B Special Enrollment Period.
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12. What should I do if I terminate my employment or drop my employer coverage?
A: If your employer-coverage terminates and you are not moving over to your spouse’s Active employer coverage, Sign up for Part A (if needed), Part B and Part D as soon as you can.
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Parts A and B: You have an 8-month special enrollment period (SEP) to enroll in Part B without penalty.
- The sooner you enroll in Part B the sooner your coverage begins.
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Part D: You only have 63 days to enroll in Part D plan without penalty.
- Your plan will begin the first of the month following the month you enroll.
13. How does Medicare work with COBRA?
A. Medicare is always primary to COBRA coverage. This means that your COBRA plan will only pay out after Medicare has paid out, and often the coverage you would receive with the COBRA plan paying secondary doesn’t justify the cost of paying the COBRA premiums.
If you are eligible for Part A and B, you should enroll immediately as you will have to pay a late-enrollment penalty if you decide to delay enrolling in Medicare because you had COBRA. This is because COBRA coverage is generally not coverage based on active employee status.
If you enroll in Medicare after electing COBRA coverage, your COBRA coverage will terminate on enrollment in Medicare. If you elected Medicare prior to electing COBRA, your COBRA coverage can continue.
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14. What do I need to know about Part C (Medicare Advantage)?
Medicare Advantage plans are sometimes referred to as Medicare Part C. Part C is completely voluntary. They are Medicare-approved private health insurance plans for individuals enrolled in Original Medicare, Part A and Part B. When you elect to join a Medicare Advantage plan, you are still in the Medicare program and must continue paying your Part B premium. Medicare Advantage plans often offer additional benefits such as vision, dental, prescription drug coverage and in some cases, lower out-of-pocket costs. They also usually have specific networks where you must seek care.
You can generally join if:
- You live in the service area of the plan you select
- You already have Medicare Part A and B coverage
- You don’t have end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant); however, there are a few exceptions
Choose your plan carefully. Outside of when you first become eligible to enroll and other personal circumstances that may qualify you for a Special Election Period, you are only able to change plans once a year during the Annual Election Period. The Annual Election Period lasts from October 15 through December 7 of each year.
There is also a Medicare Advantage Disenrollment Period, which runs from January 1 through February 14. During this time, individuals enrolled in a Medicare Advantage plan can disenroll from their plan and return to Original Medicare coverage.
It’s important to know that Medicare Advantage plans vary depending on where you live, and each Medicare Advantage plan offers plan-specific benefits. Find out if a Medicare Advantage plan is right for you by comparing the plans available in your area.
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Resources
If you have questions or need more information about becoming Medicare eligible and what options are available to you visit the following resources to learn more:
- For more information on Medicare please see the official U.S. Government Medicare handbook “Medicare and You” available here.
- Or, call 1-800-MEDICARE (800-633-4227)