If a covered employee who is enrolled in MIT coverage that includes his or her spouse or family members becomes entitled to Medicare and chooses to enroll, will the family members lose coverage?
Thursday, September 03, 2020
When a covered employee enrolls in Medicare, this does not trigger an automatic loss of medical coverage under MIT. The covered employee may continue his or her MIT medical coverage (and medical coverage for his or her eligible family members), in which case Medicare will usually pay secondary to MIT while the employee remains actively employed. This means that if medical expenses are incurred by the covered employee, they must first be submitted to MIT for payment and then, to the extent that they are not covered by MIT they could be eligible for payment through Medicare.
Enrollment in Medicare is treated as an event that permits the covered employee to elect to drop MIT medical coverage mid-year. However, you should be aware that if you choose to drop MIT medical coverage because you enrolled in Medicare, this is not a COBRA qualifying event and so your covered family members will not have any right to continue their medical coverage through MIT. The only way to continue medical coverage for eligible family members is for the covered employee to remain in MIT medical coverage and elect to cover the eligible family member.
Medicare contains special rules that penalize eligible individuals who do not sign up for Medicare when they first become eligible. These penalties, however, may not apply where the individual has employer-provided medical coverage, such as MIT. While MIT can not advise you as to your Medicare rights, we urge you to consult your advisors to determine when you must enroll in Medicare. For purposes of your analysis, it should be noted that because we are an association-sponsored health plan that covers one or more employers who have 20 or more employees, the medical coverage obtained through MIT is subject to the Medicare secondary payor rules, regardless of whether the participating employer has 20 or more employees (which is normally the threshold for an employer to become subject to the Medicare secondary payor rules). MIT has not elected out of these Medicare secondary payor rules.