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Medicare Advantage Plan: Can You Have One with Employer Insurance?

HealthPlans of NC

As the workforce ages, associated statistics play a prominent role in claim cost projections. Statistically, employees aged 65 and older incur two to three times the claim cost of average employees aged 40. However, claims equal risk, and unfortunately, this drives up health insurance premiums or self-insured costs.

Employees who know their health coverage options use a Medicare Advantage Plan to help with these costs. But knowing which medical insurance plan is the most beneficial for you and what you’re eligible for involves a lot of research.

Below, we’ll discuss a Medicare Advantage Plan, your options, and how it works with employer insurance. We also answer, “Can you have a Medicare Advantage Plan and employer insurance?”

What is a Medicare Advantage Plan?

The majority of people receive their Medicare benefits through Original Medicare. However, some choose to receive health coverage through the Medicare Advantage (MA) Plan. This is also known as a Medicare private plan or Part C.

MA Plans contract with the federal government and are paid a fixed amount per person to provide medical insurance through Medicare. These benefits are available through Social Security. Most people use three coverage options.

  • The first are Health Maintenance Organizations (HMOs), which you need parts A and B to be eligible for. If accepted by Social Security, most HMOs will typically require that you see in-network professionals to receive health coverage. Additionally, HMOs require referrals for visits to a specialist. But most plans do offer prescription drug coverage if you need it.

  • The second option is Preferred Provider Organizations (PPOs). With this coverage option, you will also need both Parts A and B, which you can receive after your application through Social Security. Unlike HMOs, you won’t need a referral to visit a specialist with a PPO and may have prescription drug coverage with the right plan.

  • The third option is a Private Fee-For-Service (PFFS), which also requires part A and B coverage to be eligible for medical insurance. Most PFFS plans have provider networks, which may lower out-of-pocket costs. However, they also cover out-of-network services. Like a PPO, you also don’t need referrals to see a specialist and may also have prescription drug coverage with the right plan.

Remember that being 65 or older is not the only way to be eligible for Medicare. If you’re suffering from a severe illness or disability, you’ll be able to apply for social security.

In addition, you don’t have to apply if you already receive social security benefits. The Social Security Administration will automatically enroll you in Medicare.

Medicare Supplemental Insurance

Using Both Medicare Advantage Plan and Employer Insurance

According to the U.S. Bureau of Labor Statistics (BLS), “the labor force participation rate is expected to increase the fastest for the oldest segments of the population, notably people ages 65 to 74 and 75 and throughout 2024. In contrast, participation rates for most other age groups in the labor force aren't projected to change between now and 2024.”

That means more and more employees ask, “Should I drop my employer coverage for an MA Plan?”

Below, we’ll be covering your three options as a Medicare-eligible worker.

Should You Drop Your Employer Insurance Coverage for a Medicare Advantage Plan?

Three coverage options are generally available if you’re eligible for both Medicare and employer insurance. You may keep both, drop employer coverage, or delay Medicare enrollment.

While you can drop your health coverage with your employer and only use Medicare, it’s not a requirement.

You also have the option of delaying Medicare benefits. This may be the best choice if your employer coverage is more beneficial than Medicare. You may want to consider dropping your employer coverage if Medicare can offer smaller monthly premiums with better coverage.

If you like the extended benefits of a group health plan, a Medicare Advantage plan may be right for you. Over 90 percent of Advantage plans provide additional coverage, including prescription drugs, vision, and dental care.

You may also run into the unfortunate fate of losing your job. If not, there are options available to help cover your medical expenses. Firstly, the Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers the right to receive benefits under their employer insurance for a limited time under certain circumstances. This applies if they’ve lost their insurance. Like employer coverage, you can have COBRA as well as an MA Plan at the same time. This way, you are covered as best as possible.

But if you lose your job after deciding to delay Medicare, you won’t have to wait for the next enrollment period. This is largely due to Part B Special Enrollment Period (SEP) for job loss. Therefore, you can apply after open enrollment without paying late enrollment penalties.

Late enrollment penalties are distributed in two ways: as a one-time fee or added to your monthly premium. Additionally, late enrollment penalties can differ depending on the part that you’re applying for.

For example, Part A late enrollment penalties may raise your monthly bill by 10 percent. The penalty will stay for twice the years you didn’t initially sign up for. If you apply for Plan B late but do not qualify for SEP, the late enrollment penalty policy requires you to pay an additional 10 percent. The 10% is added to each year you didn’t apply. Depending on your income, you may also have a higher premium rate. 

Also, keep in mind that transitioning from your employer insurance to Medicare may involve what’s called creditable coverage. You can use creditable coverage in two different ways. Generally speaking, creditable coverage allows you to switch insurance plans without penalties, restrictions, or waiting periods. For Medigap policies, the coverage that shortens the waiting period would also be called creditable coverage.

Lastly, remember that the best option depends on your needs. Whatever route you choose, ensure sufficient prescription drug coverage, medical service availability, and other necessities.

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Get Agents to Assist You with Your Health Insurance Plan

Understanding Medicare medical insurance can be exhausting and complicated. The confusion and lack of information mean that employees are unaware that they can enroll in Medicare Part A and Part B. They also don’t know they can choose an MA Plan as their primary insurance for lower monthly premiums and pocket costs.

A lack of knowledge can also prevent Medicare-eligible workers from comparing their current monthly premiums to those of other plans. This does a disservice to all individuals and further limits coverage options.

The good news is that you have experts waiting and willing to help. With proper discussion and research, employees can find the best insurance with low monthly premiums and pocket costs.

Frequently Asked Questions

Can you have Cobra and a Medicare Advantage plan?

If you enroll in one before the other, there’s no need to worry – you can have both coverage options. However, consider benefits such as prescription drug coverage, monthly premiums, and pocket costs.

If your private insurance plan is provided by an employer, there is no other type of private health insurance for which Medicare is a secondary payer. This includes COBRA, retiree health plans, and coverage via the ACA Marketplace. If you have one of these plans, Medicare is the primary payer, with your private insurance paying secondary.

What is excluded from a Medicare Advantage Plan?

MA Plan exclusions depend on the kind of plan you have. Some, for example, may exclude vision or dental care, while others exclude coverage for out-of-network medical services unless it’s an emergency. For full details, speak with a health insurance expert about your options.

Is it necessary to have supplemental insurance with Medicare?

While supplemental insurance is not necessary with Medicare, the additional coverage will help with concerns like prescription drug coverage and pocket costs. If you are planning to have Medicare, exploring your options for supplemental insurance may be a good idea.

What is the difference between a Medicare Advantage Plan and a Supplemental Medicare Plan?

The major difference is that the Medicare Advantage plan bundles Part A, B, and D. Meanwhile, a supplemental Medicare plan is additional insurance that helps with Part A and B coverage.

Is there a Medicare Supplement that covers everything?

Unfortunately, there is no Medicare Supplement that covers everything. So, it’s essential to research and speak with a health insurance expert about the best plan for you.

Want to Know More?

Medicare can be a confusing process. But it’s important to remember that you have options if you’re eligible and still working. Also, remember that different plans are available, and picking the one that suits you the best is crucial.

Speak with a healthcare expert to learn more about your possible benefits and the best way to cover your medical needs.

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