There are a couple of different scenarios whereby an employee who is covered by both Medicare and the employer’s group health plan may
encounter a dilemma as to which pays a claim first. Typically, this is a classic “coordination of benefits” that can sometimes cause confusion if not handled in a timely manner.
For employers with less than 20 employees, in a large majority of cases, Medicare is the primary payer of the claim, followed by the group health plan.
For Example, billed amount $500, Medicare allowed amount $300, Part B pays 80% of $300 = $240, group medical plan will pay the co-insurance amount of the $60 balance of the allowed amount.
Once an employee turns 65 and they are covered by Medicare A or B, they can no longer contribute to the HSA. If they are on Medicare, however, they can use funds to reimburse 213(d) expenses. They do not lose their money.
|Scenario||Primary Payer||Secondary Payer|
|Employer with 20+ employees||Employer||Medicare|
|Employer with fewer than 20 employees||Medicare||Employer|
|On spouse's insurance and employer has 20+ employees||Employer||Medicare|
|On spouse's insurance and employer has fewer than 20 employees||Medicare||Employer|
|Retiree from non-federal job with health insurance from former employer||Medicare||Employer|
|Retired and spouse's employer's plan for business with fewer than 20 employees||Medicare||Employer|
|Retired and spouse's employer's plan for business with 20+ employees||Employer||Medicare|
|Retired federal employee||Medicare||Federal Employees and Health Benefits Program|
|Under 65, disabled and have coverage through a family member's employment and employer has 100+ employees||Employer||Medicare|
*For TRICARE, there are different scenarios that exist which will determine who pays first:
Christopher S. Kudryk
KBenefits provides insurance solutions for small business owners and individuals in NJ & NY. Contact KBenefits today and see how we can benefit you.
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