Employers may offer retired former employees group Medicare Advantage insurance.
These insurance policies function like other Medicare Advantage plans. This type of Medicare is sometimes called Medicare Part C.
At the age of 65, many people in the United States become eligible for Medicare parts A and B. These parts together represent “original Medicare.” People with certain health issues, including some disabilities and end stage renal disease, are eligible before they turn 65.
People can find out if they qualify using the Medicare eligibility calculator.
In 2019, there were 71.6 million people aged 55–73 in the U.S., constituting the baby boomer generation. By 2030, all baby boomers will have reached retirement age and become eligible for Medicare.
In this article, we describe how group Medicare Advantage is different from original Medicare, as well as who is eligible, how to enroll, and what costs are involved.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Many large employers offer health insurance for retired former employees.
They may offer group Medicare Advantage. These plans function like regular Medicare Advantage plans — they are managed by private companies, and they may be either health maintenance organization, or HMO, plans or preferred provider organization, PPO, plans.
The insurance company must offer the same benefits that a person would receive under Medicare parts A and B. An Advantage plan may also cover routine dental, vision, and hearing care, for example.
Medicare Advantage plans may also include prescription drug coverage. Otherwise, Medicare Part D covers outpatient prescription drugs.
People can purchase Medicare Part D if they are enrolled in original Medicare or have an Advantage plan.
However, if their Advantage plan already includes prescription coverage, a person cannot enroll in Part D.
A group Advantage plan manages the benefits of Medicare parts A and B for retired employees. Medicare pays a fixed amount every month to the insurance company, which ensures that its Advantage plans follow Medicare’s rules.
The table below shows the differences between original Medicare and group Advantage plans.
|Original Medicare||Group Medicare Advantage plans|
|People receive the benefits of Medicare parts A and B.||People receive these benefits and possibly others, such as coverage for prescription drugs and dental care.|
|To help pay out-of-pocket deductibles, coinsurance, and copayments, a person may purchase a Medicare supplement insurance, or Medigap, plan.||Many plans help cover the out-of-pocket costs of original Medicare.|
|A person may visit any doctor or hospital that accepts Medicare.||Usually, a person needs to visit doctors and hospitals within the plan’s network.|
|A person does not need a referral to see a specialist.||Most often, a referral is required.|
|A person pays a monthly premium for Part B.||A person pays the monthly Part B premium plus a monthly premium for the group plan.|
|There is no yearly limit on out-of-pocket charges.||Most plans have this yearly limit, after which the plan pays the rest of these costs for the year.|
|Usually, if Medicare covers the service or procedure, a person does not need approval ahead of time.||Some services and procedures require preapproval.|
A person must meet the following criteria to be eligible for a group Medicare Advantage plan:
- They must be enrolled in Medicare parts A and B.
- They must live in the area where the insurance company provides coverage.
- They must be a retired employee of the company that offers the plan.
Not all insurance companies provide Advantage coverage throughout the U.S. — they can choose the states in which they offer benefits. If a retired employee does not live in the same state as their former employer, they may not qualify.
To join a group Medicare Advantage plan, a person must meet the requirements listed above.
A person’s employer supplies the contact information for the insurance company behind a group Advantage plan. If a person were buying an Advantage plan independently, they would choose the company.
Not all Medicare Advantage plans are the same. It is important to understand how the plan works and whether it will suit a person’s needs.
When filling out the application, a person will need to provide their Medicare number and the date that they enrolled in parts A and B. This information is on a person’s Medicare card.
The insurance company is not allowed to ask for financial information, such as credit card or bank details, over the phone.
When the application has been approved, the insurance company will set up a payment plan with the person and explain when the benefits will start.
There are several costs associated with group Advantage plans, and these vary, depending on the person’s location, age, and gender.
A person pays a premium — a monthly charge — for their group policy, as well as a premium for Medicare Part B. If the group plan provides added benefits, this may raise the premium.
Only an employer can offer group Medicare Advantage plans. They are available to people enrolled in Medicare parts A and B.
The plans must provide the same benefits as these elements of Medicare, and they may also offer additional coverage, of routine dental, vision, and hearing care, for example.
A person in a group Advantage plan pays a premium for the group plan and another premium for Medicare Part B.
To enroll, a person should contact their employer, who will refer them to the insurance company that holds the plan.