Company medical insurance / Medicare with retired over 65 spouse

[Delawaredave5]

I'm 62, working, wife soon 65, retired.

Megacorp has medical plan - I understand now employers have to offer coverage for over 65 spouses ?

Still researching, but I think we want to:
1. Keep her on my insurance
2. Enroll her in just Medicare Part A

What I'm trying to confirm:
1. Can I still contribute to HSA and use money for her expenses ? (I think yes)
2. Can we still stay on our high deductible plan (I think so)
3. Megacorp would be primary, Medicare secondary if she were hospitalized (believe so)

Lastly, is there any reason for her to decline all of Medicare ?

Thanks !!

 

[oldphd]

I'm 62, working, wife soon 65, retired.

Megacorp has medical plan - I understand now employers have to offer coverage for over 65 spouses ?

Still researching, but I think we want to:
1. Keep her on my insurance
2. Enroll her in just Medicare Part A

What I'm trying to confirm:
1. Can I still contribute to HSA and use money for her expenses ? (I think yes)
2. Can we still stay on our high deductible plan (I think so)
3. Megacorp would be primary, Medicare secondary if she were hospitalized (believe so)

Lastly, is there any reason for her to decline all of Medicare ?

Thanks !!

My experience is several years old, but aligns with yours. Based on what I learned from my HR, I did what you suggest in 1 & 2 of "I think we want to".

Below is based on my recollection since it's been awhile... so please take it with a grain of salt...

In the trying to confirm...
1 - We did contribute to HSA and use money for her expenses, delayed some years down the road. We have had plenty of medical expenses to meet the amount in the HSA, but when I pulled it out I was assuming I'd earmark withdrawals to go with certain expenses, including Medicare Part B. I did read something that had me questioning whether I should have done the HSA with her on Medicare Part A, but it was after the fact. I have not been challenged by the IRS in any way, but the HSA withdrawal was 2020.
2 - We stayed on high deductible.
3 - That was my understanding, however we never had any event that would verify.

On a side note - if you try to retire and use ACA for you before age 65 with her on medicare... the contribution amount for JUST you is the same as if you were a couple both under medicare age, and you have to consider both of your incomes. Be sure to look into this if you're thinking of doing it. Definite disadvantage to a couple hoping to use ACA when one person is on medicare.

Good luck!

 

[oldphd]

OK, after a little time and thinking about this, I'm reconsidering my response to #3... I think her Medicare A might have been primary if hospitalized, followed by my work coverage secondary. Either way, I don't think this matters, since most coordination of benefits these days sees to it that you get the max of the two benefits. The old days of having two coverages and getting paid more than the max are over, at least in my experience.

 

[Telly]

OK, after a little time and thinking about this, I'm reconsidering my response to #3... I think her Medicare A might have been primary if hospitalized, followed by my work coverage secondary. Either way, I don't think this matters, since most coordination of benefits these days sees to it that you get the max of the two benefits. The old days of having two coverages and getting paid more than the max are over, at least in my experience.

Yeah, I think you have that right now.
My still-working DW filed for SS on her own record at her FRA date. Which turned on Medicare. She declined Part B for now, so has Medicare Part A, and her work high-deductible insurance plan. If she was to be hospitalized, after the Part A deductible (for 2022) of $1,556 was met, then Medicare would start paying for 80%. That seems clear to us.

But we really don't understand how her high-deductible work plan would kick in as secondary. Does the Medicare Part A not-covered 20% have to add up to reach the high-deductible plan's high-deductible, before the work plan pays anything? Or does the $1,556 Part A deductible $-amount spent also count towards the work plan's deductible, which would get it part way there? I don't know. I'm absolutely fine with DW retiring before we need to find out!

 

[Bamaman]

My sister and her husband own a business, and they didn't take Medicare at age 65. The company was on a high deductible semi self insured basis up to a point. One employee had to have a heart transplant and another employee had a catastrophic illness--wiping out the account. At age 75, my sister has had back issues and cancer, and she has to fight with her insurance company for every procedure. They've had to pay big $ out of pocket too.

I retired at age 58, but had enough HSA funds saved to pay for my company's health insurance and Medicare for my wife until my age 65 @ $435 per month. It was the way to go.

You never want to decline Medicare at age 65 as every year past that will cost you 10% more than the rate @ 65 years of age--if and when you enroll.

 

[MBSC]

Yeah, I think you have that right now.
My still-working DW filed for SS on her own record at her FRA date. Which turned on Medicare. She declined Part B for now, so has Medicare Part A, and her work high-deductible insurance plan. If she was to be hospitalized, after the Part A deductible (for 2022) of $1,556 was met, then Medicare would start paying for 80%. That seems clear to us.

But we really don't understand how her high-deductible work plan would kick in as secondary.

Large group plans are primary to Part A. There is no 20% coinsurance in Part A. The only patient responsibility for under 60 inpatient days is the $1556 deductible but the HDHP claim payment counts toward the deductible. Providers who accept claim assignment must accept the low Medicare approved amount as payment in full. Hospitals must accept assignment. The quirk is that this rule still applies when Medicare is secondary. As long as the HDHP pays more than $1556, there is no remaining patient responsibility even though the hospital may send bills.

Part B reimbursement as a secondary payor is different and not worth the premium. This is why Part B is delayed without penalty. Retiree plans and most small group plans are secondary to Medicare.

42 CFR § 411.33 - Amount of Medicare secondary payment.

(e) Services reimbursed on a basis other than fee schedule, reasonable charge, or monthly capitation rate. The Medicare secondary payment is the lowest of the following:

(1) The gross amount payable by Medicare (that is, the amount payable without considering the effect of the Medicare deductible and coinsurance or the payment by the primary payer), minus the applicable Medicare deductible and coinsurance amounts.

(2) The gross amount payable by Medicare, minus the amount paid by the primary payer.

(3) The provider's charges (or the amount the provider is obligated to accept as payment in full, if that is less than the charges)[HDHP approved amount], minus the amount payable by the primary payer.

(4) The provider's charges (or the amount the provider is obligated to accept as payment in full if that is less than the charges)[HDHP approved amount], minus the applicable Medicare deductible and coinsurance amounts.

[Examples follow but the dollar amounts are outdated.]

(4) A hospital furnished 5 days of inpatient care...
(iv) ...The beneficiary has no liability for Medicare-covered services since the primary payment satisfied the [$1556] deductible.

Source: https://www.law.cornell.edu/cfr/text/42/411.33

I have Medicare and I'm 65 or older and have group health plan coverage based on my or my spouse's current employment status. If the employer has 20 or more employees, then the group health plan pays first, and Medicare pays second.

Source: https://www.medicare.gov/supplements-other-insurance/how-medicare-works-with-other-insurance

 

[jollystomper]

I'm 62, working, wife soon 65, retired.

Megacorp has medical plan - I understand now employers have to offer coverage for over 65 spouses ?

Still researching, but I think we want to:
1. Keep her on my insurance
2. Enroll her in just Medicare Part A

What I'm trying to confirm:
1. Can I still contribute to HSA and use money for her expenses ? (I think yes)
2. Can we still stay on our high deductible plan (I think so)
3. Megacorp would be primary, Medicare secondary if she were hospitalized (believe so)

Lastly, is there any reason for her to decline all of Medicare ?

Thanks !!

You should talk with your Megacorp to get the details for their plan.

I will be in this situation in a couple of months, as my DW will turn 65 but I do not until 2023. This what my Megacorp told me when I asked earlier this year (and they followed up, sending me a document with details a month ago to confirm it):

- She can stay on Megacorp insurance until I turn 65, if she enrolls in Medicare Part A and Part B.
- Medicare becomes the primary health coverage, Megacorp becomes her secondary.
- Since Medicare is now her primary, the Megacorp insurance premium is reduced. The reduction is more than the Part B premium; my analysis showed it cheaper to keep her one Megacorp insurance than to go with a Medigap supplement/dental/prescription plans (and Megacorp insurance also includes some dental and eye coverage).

In relation to your questions for my situation:

1. I can still contribute; what is unclear is how much I can. We have a single "family" HSA plan. All of the examples show a reduction in what can be contributed to an HSA *if* a person has their own HSA plan. I cannot find an example when it is a family plan. From the IRS worksheet (I forget the number) it seems I can still contribute the full HSA family amount this year, even with her turning 65.

2. In our case, she can stay on Megacorp health insurance until I turn 65, at which point we are both ineligible for Megacorp retiree insurance and must use Medicare.

3. In our case, Medicare is primary, Megacorp is secondary. This may vary by company.

In our case, we do not want to decline Medicare for her as she would then not be eligible for any Megacorp coverage. As others have stated it becomes more expensive if you delay. Plus in our case our overall monthly health car premiums will be lower once she goes onto Medicare.

 

[MBSC]

I will be in this situation in a couple of months, as my DW will turn 65 but I do not until 2023. This what my Megacorp told me when I asked earlier this year (and they followed up, sending me a document with details a month ago to confirm it):

- She can stay on Megacorp insurance until I turn 65, if she enrolls in Medicare Part A and Part B.
- Medicare becomes the primary health coverage, Megacorp becomes her secondary.

We are transitioning from Megacorp retiree health care into the wild world of Medicare in less than a year.

It sounds like you are retired. Retiree plans are secondary.

The OP and Telly's DW have group plans through current employment.

Retiree insurance

If you're retired and have Medicare and retiree coverage from a former employer, Medicare pays first for your health care bills.

Source: https://www.medicare.gov/supplements-other-insurance/retiree-insurance