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If you are responsible for the health insurance for your company and your employee base is less than twenty employees, correct Medicare enrollment is critical. When employees or dependents turn age 65 they should enroll in Medicare parts A and B.  Medicare has primary responsibility for medical claims and, if it is not in place, the private insurance carrier is not responsible for those bills.  What does this mean?

  1. If an employee has a medical incident which puts him in a hospital setting for care, Medicare part A takes care of the lion’s share of the bills and the private insurance company picks up the balance while coordinating the insurance plan design.  If Medicare part A is not in place not only is the employee responsible for all of the bills, but they will be processed without either the Medicare or private insurance discounts.
  2. When an employee has an outpatient service like a surgery or lab / diagnostic procedure Medicare part B is responsible for those charges.  Patients will be responsible for charges related to the surgeon, the assistant surgeon, the anesthesiologist and any other physician charges.  In addition there are normally pre-operative procedures like lab tests and imaging processes, never mind the charges from those individuals who interpret the results of these tests.
  3. Another problem of not being properly enrolled is that this is a difficult situation to correct. If an individual finds himself without Medicare part A and / or B coverage, enrollment is only available between January 1 and March 31 of the year.  Worse yet, if that individual enrolls during this special enrollment period the effective date will be July 1.  This individual could potentially be at risk for uncovered claims for up to 15 months if the error is caught in April of any given year.

What can be done to avoid this?  Someone in your company needs to remain vigilant about who is approaching their 65th birthdays. This applies to employees as well as their dependents.  At least three months before the month in which an individual turns 65 conversation should be initiated about what Medicare coverage is necessary and how enrollment should be done.

Please seek out the help of your broker or health insurance counselor to be sure that your employees have compliant coverage.  An error here can produce unnecessary claims that can be financially devastating to your employees.