HR Support on Medicare Programs & Employee Eligibility

Editor's Note: Understanding Medicare basics.

Tracy MorleyOverview: Medicare is a federal health insurance program that covers individuals age 65 or over, disabled workers under age 65 and individuals with end-stage renal disease. The Medicare program is funded by taxes paid by both the employee and the employer and is calculated as a percentage of salary with no annual maximum.

Medicare is made up of four programs:

  • Hospital insurance (Medicare Part A);
  • Medical insurance (Medicare Part B);
  • Medicare Advantage Plans (Medicare Part C); and
  • Prescription drug insurance (Medicare Part D).

Eligibility for Medicare benefits begins at age 65. Employees that work past age 65 are still eligible for Medicare. If an active employee is covered under both Medicare and the employer's group health plan, the group health plan is considered the primary health plan. For retirees, Medicare is considered the primary insurance and any coverage under an employer's health plan is secondary.

Trends: Medicare is one of the most expensive government programs. With baby boomers reaching retirement age, enrollment is expected to be 80 million people by 2030. The debate continues as to how to control Medicare spending so that the program will be around for future generations.

Author: Tracy Morley, SPHR, Legal Editor

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