Employer Offered Medicare Supp Plan

[Guest stilllearning]

Is it ok for an employer to approach a Medicare eligible employee and request that the employee waive off the group medical plan and enroll in Part A, Part B, etc.? The reason is to reduce the employer's premium expenses. If so, is there an issue with the employer paying for a portion or all of the Medicare Supplement plan? Does it make the Medicare Supplement plan a group plan subject to ERISA?

[Guest taylorjeff]

Back in the old days, prior to 1986, that's exactly what happened. The employee was allowed to go to a medicare supplemental plan or carve-out plan offered by his employer, signed up for parts A&B, paid the Part B premium, and the employer was charged a lesser rate by the insuror. In 1986, the Congress began passing legislation concerning the working aged. And since then the laws have said that for employer's with 20 or more employees that Medicare will be secondary, and the employer's plan primary. The employee can on his own drop the employer plan and sign up for Medicare. The employer can not encourage or enforce this action nor pay for a supplement.

Employers who have fewer than 20 (doesn't sound like yours) employees may still offer carve-out (and I suppose supplements, though you don't see them as often) plans to their 65 and over employees and/or spouses.

Is it ok for an employer to approach a Medicare eligible employee and request that the employee waive off the group medical plan and enroll in Part A, Part B, etc.? The reason is to reduce the employer's premium expenses. If so, is there an issue with the employer paying for a portion or all of the Medicare Supplement plan? Does it make the Medicare Supplement plan a group plan subject to ERISA?