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Roadmap to Medicare SSDI Under 100 Employees

Customized Roadmap Report

Click on the image to download your 1 page Roadmap

Enrolling in Medicare

You will be automatically enrolled in Medicare Parts A and B effective after 24 months of SSDI.

Since you are collecting SSDI (Income), you are required to keep your Medicare Part A.  You will have the option to keep or return your Medicare Part B.  In your circumstances, it is advised that you Keep Part B.

To avoid potential gaps in coverage, penalties, and/or deadlines, you may want to...

You will automatically be enrolled in both Medicare Parts A and B.  Simply, do nothing to keep Medicare Part B.

Your Roadmap is based on…

  • You are under age 65, but qualifying for Medicare due to SSDI
  • Your Primary Insured intends to remain ACTIVELY WORKING (at the employer providing your benefits)
  • You ARE covered under the group health insurance plan
  • The employer providing health insurance has LESS THAN 100 employees

Do I need Medicare to have full coverage?

Yes.  Medicare will become your Primary Insurance once you are eligible.  You can keep your Group Health Plan as Secondary Insurance or you can choose private secondary insurance. 

Medicare “Who Pays First” Law states that your Group Health Insurance will become secondary insurance when you are on Medicare due to SSDI since your Group Insurance is through an employer with less than 100 employees.

Will I receive a penalty if I don’t enroll now?

Unsure. Medicare regulations are unclear as to if one will receive a penalty for not enrolling in Medicare Part B if you are receiving Social Security Disability Income and are also covered by a small group health plan (less than 100 employees).  

Part A: Is required since you are collecting SSDI.

Part B: You will receive a Part B Late Enrollment Penalty if you do not have creditable coverage.

  • Creditable coverage is group health insurance coverage while the Primary Insured is actively working for the employer providing the Group Health Plan.
    • Severance, COBRA and/or Retiree Plans are not creditable for avoiding the penalty.
    • Those who have Medicare based on disability can enroll later under an SEP if they, their spouse, or their family member is working, and have coverage by an employer or union GHP (with at least 100 employees – also known as a Large GHP) based on that employment.  For reference, see heading titled Enrolling with a Special Enrollment Period.

A 10% penalty added for every 12 months you go without creditable coverage. Months need not be consecutive. See Details on how the penalty is calculated.

  • The penalty will be assessed on the Base Medicare Premium ($144.60/month in 2020) for as long as you are enrolled in Medicare.

Part D: You will receive a Part D Late Enrollment Penalty if you do not have creditable prescription coverage.

  • Creditable prescription coverage is drug coverage that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage.

A 1% penalty added for every 1 month you go without creditable prescription coverage. Months need not be consecutive.

  • The penalty will be assessed on the Average Medicare Part D Premium ($32.74/month in 2020) for as long as you are enrolled in Medicare Part D.

Penalty Reset: Everything changes when you reach 65. At the end of the month before the month in which you turn 65, you lose your entitlement to Medicare based on disability. At the beginning of the month you turn 65, your entitlement to Medicare based on becoming 65 begins. In other words, you get a second initial enrollment period.  At that point the clock is reset, and Medicare coverage begins anew as though you’d never had it before.  Any penalties that were assessed will be removed.

What is my deadline to enroll?

Unsure.  To be cautious, it is advisable keep your Medicare Part B when it is automatically issued to you (after 24 months of SSDI).  Medicare regulations are unclear and it appear that you only have a Special Enrollment Period if your group size is over 100 employees.

Part A: You will be automatically enrolled in Medicare Part A after 24 months of SSDI.  You will be required to keep Part A since you are collecting SSDI.

Part B-SEP: You will be automatically enrolled in Medicare Part B after 24 months of SSDI.  It does not appear that you will have an 8 month Special Enrollment Period if you return your Part B and want to apply later.

  • Those who have Medicare based on disability can enroll later under an SEP if they, their spouse, or their family member is working, and have coverage by an employer or union GHP (with at least 100 employees – also known as a Large GHP) based on that employment.  For reference, see heading titled Enrolling with a Special Enrollment Period.

Part B-GEP: If you miss your Initial Enrollment Period, you will be able to enroll annually during the General Enrollment Period (however, penalties may apply).

  • The General Enrollment Period is from January 1st to March 31st each year. Your Part B effective date will be July 1st following your enrollment.

Secondary Insurance Options

Since your group health benefits are likely considered secondary insurance to Medicare, you MUST be enrolled in Medicare A and B to have full coverage.  You will have the option to keep your Group Health Plan as secondary or elect a Medicare Supplement and Medicare Prescription Drug Plan or a Medicare Advantage Plan as secondary.

Does it make sense to drop my group health plan to enroll in Medicare Supplement Insurance and a Medicare Prescription Plan?

A general rule of thumb is that if your group health plan costs on average less than $150-200/month/person or about $2000-2400/year/person, then your group health plan is more cost effective than Medicare.

  • Please add up the premiums, copays, deductibles and coinsurances (everything except Rx cost) of your current group health plan for comparison.

However, if you think you may pay more than that, or you are seeking lower deductibles and copays, then you may want to explore Medicare further.

Please contact us for a Medicare Cost Analysis to help you better evaluate if your Group Health Plan or a Private Medicare Supplement and Medicare Prescription plan is more cost effective.

    • If Medicare Secondary coverage is more cost effective than your current plan, you may want to replace your current plan.
      • If your employer is paying the premium on your current plan, you may want to approach them to see if they would be willing to reimburse you the amount they are currently paying to your insurance to help you pay for Medicare instead.

Underwriting Considerations

Once you enroll in Medicare Part B, you will have an Open Enrollment Period/Special Election Period to choose your secondary coverage without having to medically qualify.

When under age 65 and on SSDI, plan availability is state specific.  Please see HTA for plan options.

Additional Considerations

Spouse Under Age 65- If you have a Spouse under age 65, not yet qualified for Medicare, and relies on your group health plan for benefits, please be mindful that if you come off your group plan, your spouse will have to go on COBRA, seek benefits through their respective employer, or purchase individual health insurance until they become Medicare eligible.

Important HSA Considerations– You cannot continue to contribute to your Health Savings Account (HSA) once you enroll in Medicare Part A.  If you are enrolling in Medicare after age 65, your Part A effective date may be back dated up to 6 months.  Please contact us to discuss the HSA maximum contribution rate for you circumstances.  Click Here for Details and Rules.

  • This does not apply to Flexible Spending Accounts (FSA) or Health Reimbursement Accounts (HRA).  Medicare does not have any restrictions on these types of accounts.