How Medicare and employer coverage work together
Medicare has specific rules about working alongside an employer’s health plan. The primary insurer and costs will depend on various factors.
Factors to consider include the person’s age, the number of people the employer plan covers, and whether a multi-employer plan is in place.
When someone has multiple health insurers, the “coordination of benefits” rules determine which plan pays first.
This article discusses how Medicare works with employer health plans, including claims processing and out-of-pocket costs.
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.
Primary and secondary insurers
When an individual first sends a claim to Medicare, the Centers for Medicare & Medicaid Services (CMS) will provide a Medicare Secondary Claim Development Questionnaire to confirm whether a person has more than one health insurance policy.
Medicare can be the primary or secondary payer, with the coordination of benefits rules determining which it is in each case.
The primary payer will be the first to receive a person’s healthcare claims and will pay eligible costs up to the plan’s coverage limit.
If there are costs that the primary payer does not cover, they may pass the claim to the secondary payer for processing.
A person can help ensure that medical claims go to the right insurer by:
responding to Medicare Secondary Claim Development Questionnaire letters by the given deadlines
telling the Benefits Coordination & Recovery Center about health insurance changes that affect the person or their spouse
telling a doctor or another healthcare professional if they have more than one insurance plan, including Medicare
Deciding the primary insurer
The coordination of benefits rules decides when Medicare pays first. They also ensure that:
the correct insurer pays claims
Medicare shares eligibility data with other health insurers, including employer insurance
claim payments do not exceed 100% of the total healthcare professional charges
Medicare as the primary payer
Medicare is the primary payer when a person:
has a group health plan and works for a company that has fewer than 20 employees
has retiree health coverage, such as from a previous employer
is under 65 years of age, has a disability, has a group health plan, and works for a company with fewer than 100 employees
Learn about what happens when Medicare becomes the secondary payer.
How to submit claims
Healthcare providers submit claims to the primary insurer first. Providers who participate with Medicare, which is known as accepting assignment, will usually send a claim directly to Medicare for consideration if they are the primary insurer.
The primary insurer must consider the benefits for which the person is eligible without factoring in a secondary insurer.
After the primary insurer has paid for eligible costs in line with plan benefits, they may submit the remaining claim costs to the secondary insurer.
If this does not happen, a person may submit the claim to the secondary insurer themselves.
How payments are calculated
Under the coordination of benefits rules, the primary payer must pay an amount up to the limit of the coverage on the plan.
The remaining charges will go to the secondary payer, which provides benefits based on the plan rules.
Out-of-pocket costs
There may be additional costs if Medicare and employer coverage do not cover the full cost of the service. If this is the case, the individual will need to pay the remaining amount.
There will likely be other necessary costs, such as deductibles for both plans.
A person can contact Medicare and the insurer providing the employer’s health plan to determine what coverage they offer and what additional costs may be involved.
Medicare resources
For more resources to help guide you through the complex world of medical insurance, visit our Medicare hub.
Summary
Medicare can work with other health plans, including employer coverage, and there are rules to decide which plan pays first.
Either a person or a healthcare professional can submit a claim to the primary insurer first, who will consider the bill as though there is no secondary insurer.
Once the primary insurer has covered the expenses, the secondary payer will consider the remaining costs.
Out-of-pocket expenses may also still apply.
View the original article on Medical News Today
