Providing health insurance for your employees is a great benefit, but the situation can change if the employee is 65-years old or older. Here are some of the details that every employer needs to be aware of if offering group health insurance to their team.
Will NH Group Health Insurance Cover Employees 65 and Older?
Employers who offer health insurance are providing a great benefit to their employees. However, they need to be conscience on employees who turn 65. The question is will the group coverage still work for those individuals? The answer? Depends. The magic number is 20. If the business has less than 20 full time employees, then Medicare is primary. Therefore, it is imperative the employee signs up for Medicare Parts A and B
The reason is because the health plan the group has is secondary to Medicare. The plan will assume the member has Medicare and therefore not pay for most of the covered benefits under Medicare. In other words, the member will have very limited benefits if they don't enroll into Medicare. Once they enroll into Medicare, they have two options. One is for them to enroll into a subgroup denoted for Medicare eligible employees. This plan typically works like a Medicare Supplement plan and can also include prescription drug coverage.
What if the Employee Over 65 Covers a Spouse on the Group Health Insurance Plan?
If the employee is covering a spouse who is not Medicare eligible the spouse can stay on the group health plan as an individual so there is no interruption of coverage. The second option is the employee to come off the group plan and enroll into a private Medicare Supplement plan along with a Part D plan for prescription drug coverage. The downside with this option is if the employee is covering a spouse. The spouse can stay on the plan as an individual but only for 18 months. The spouse is considered COBRA which can only last up to 18 months. This will work if the spouse also turns 65 within 18 months and then can take the same path as the spouse.
How is NH Group Health Insurance Impacted if Business has More than 20 Employees?
Now let's talk about if the business has 20 or more employees. In this scenario the health plan is now primary. Most health plans are rich enough in benefits that Medicare being secondary wouldn't add any additional coverage. Therefore, the employee would not have to sign up for Medicare at this time. Will the employee get a late penalty if they don't sign up now? The answer is no because they have credible coverage. They can sign up for Medicare at the time they leave the company and they will not incur any late penalties.
As you can see this can be a very confusing topic for many employers and plan rules may change over time. Please contact Tom Hutton at HPM Insurance for any questions or to schedule a meeting to discuss your specific situation.