Medicare card (Image: CMS) (Credit: Centers for Medicare and Medicaid Services)

Recently, a pharmaceutical company inquired regarding one of its employees who is 66 and planning to retire.

(Related: Your Employer Clients Can Prepare for Delayed Retirement by Following These 3 Steps)

The employer offers retiree medical coverage, but it wanted to confirm whether the employee needed to enroll in Medicare Part B.

The employer still has a retiree’s status as “active” because they are receiving retiree medical coverage. For this reason, the employee doesn’t think they need to enroll in Medicare Part B.

The Question

Does an employee who is insured under the employer’s plan need to enroll in Medicare Part B?

The Answer

The employee would need to enroll in Medicare Parts A and B when they stop working in order to avoid a penalty in the future.

The Explanation

Although the employee in question is still covered on the private retiree medical coverage and listed as active in the employer’s system, Social Security Administration rules dictate that an individual must meet SSA’s current employment status in order to be considered active.

This means, if someone is not truly actively performing work duties, they are not considered to have current employment status by the SSA.

Therefore, they need to enroll. Medicare coverage would serve as their primary payer — pay the medical bills first — and their employer’s medical plan would serve as secondary payer for their medical claims.

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Pen (Image: iStock)Tricia Blazier is director of health care insurance services at Allsup.