Medicare Advantage group plans: What are the benefits?
Employers may offer retired former employees group Medicare Advantage insurance.
All Medicare Advantage plans, or Medicare Part C plans, must offer the same benefits as Original Medicare (parts A and B). Many plans also offer additional benefits, such as prescription drug coverage.
Read on to learn about how group Medicare Advantage works and how it differs from Original Medicare. This article also looks at eligibility, how to enroll, and what costs are involved.
Glossary of Medicare terms
We may use a few terms in this article that can be helpful to understand when selecting the best insurance plan:
Out-of-pocket costs: An out-of-pocket cost is the amount a person must pay for medical care when Medicare does not pay the total cost or offer coverage. These costs can include deductibles, coinsurance, copayments, and premiums.
Deductible: This is an annual amount a person must spend out of pocket within a certain period before an insurer starts to fund their treatments.
Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, this is 20%.
Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
What is group Medicare Advantage?
Employers may offer group Medicare Advantage to employees when they retire. According to the Kaiser Family Foundation (KFF), around 5.4 million people with Medicare are enrolled in a group Medicare Advantage plan through either a former employer or a union in 2024.
These plans function like regular Medicare Advantage plans. They are managed by private companies, such as UnitedHealthcare. Plans may be either Health Maintenance Organization (HMO) plans or Preferred Provider Organization (PPO) plans.
The insurance company must offer the same benefits that a person would receive under Medicare Part A (hospital insurance) and Part B (medical insurance).
Many Advantage plans include prescription drug coverage.
An Advantage plan may also cover added benefits, such as prescription drug coverage, and dental, vision, and hearing care.
Learn about Medicare Advantage coverage.
Differences between group Medicare Advantage plans and Original Medicare
A group Advantage plan manages the benefits of Medicare parts A and B for retired employees. Medicare pays a fixed amount every month to the insurance company, which ensures that its Advantage plans follow Medicare’s rules.
The table below shows some of the differences between Original Medicare and group Medicare Advantage plans.
Original Medicare | Group Medicare Advantage plans |
|---|---|
People receive the benefits of Medicare parts A and B. | People receive these benefits and possibly others, such as coverage for prescription drugs and dental care. |
To help pay out-of-pocket deductibles, coinsurance, and copayments, a person may purchase Medicare supplement insurance, or a Medigap plan. | Many plans help cover the out-of-pocket costs of Original Medicare. The plans also have maximum out-of-pocket costs. |
A person may visit any doctor or hospital that accepts Medicare. | Usually, a person needs to visit doctors and hospitals within the plan’s network. |
A person does not need a referral to see a specialist. | Most often, a referral is necessary to see a specialist. |
A person pays a monthly premium for Part B. | A person pays the monthly Part B premium plus a monthly premium for the group plan. |
There is no yearly limit on out-of-pocket charges. | Most plans have maximum out-of-pocket costs, after which the plan pays the rest of these costs for the year. |
Usually, if Medicare covers the service or procedure, a person does not need approval ahead of time. | Some services and procedures require pre-approval. |
Learn more about how Medicare Advantage and Original Medicare differ.
Eligibility for group Medicare Advantage
A person must meet the following criteria to be eligible for a group Medicare Advantage plan:
They must be entitled to Medicare Part A and enrolled in Part B.
They must live in the area where the insurance company provides coverage.
They must be a retired employee of the company that offers the plan.
Not all insurance companies provide Advantage coverage throughout the United States. They can choose the states in which they offer benefits. If a retired employee does not live in the same state as their former employer, they may not qualify.
Learn more about Medicare Advantage eligibility.
How to enroll in a group Medicare Advantage plan
A person’s employer supplies the contact information for the insurance company behind a group Advantage plan. If a person were buying an Advantage plan independently, they would choose the company.
Not all Medicare Advantage plans provide the same benefits. It is important to understand how the plan works and whether it will suit a person’s needs.
When filling out the application, a person will need to provide their Medicare number and the date that they enrolled in parts A and B. This information is on a person’s Medicare card.
Following the application’s approval, the insurance company will set up a payment plan with the person and explain when the benefits will start.
Learn about the Medicare enrollment periods.
Group Medicare Advantage costs
There are several costs associated with group Advantage plans, and these vary depending on factors such as the person’s age and location.
A person pays a monthly premium for their group policy, as well as a premium for Medicare Part B. If the group plan provides added benefits, this may raise the premium.
Learn more about Medicare Advantage costs.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Summary
An employer can offer group Medicare Advantage plans to a retired former employee. A person must be eligible for Original Medicare parts A and B.
The plans must provide the same benefits as Original Medicare. They may also offer additional coverage, such as prescription drug coverage.
A person in a group Advantage plan pays a premium for the group plan, as well as the Medicare Part B premium.
To enroll, a person should contact their employer, who will refer them to the insurance company that offers the plan.
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