Question: Are employers required to offer benefits to employees eligible for Medicare (65 or older)?

Answer: An employee who is entitled to Medicare may:

  • Remain enrolled in a company’s group health plan and delay enrollment in Medicare;
  • Elect enrollment in Medicare and remain enrolled in the group health plan at the same time; or
  • Voluntarily revoke group health plan coverage and enroll in Medicare.

Regulatory guidance states that the Medicare Secondary Payer (MSP) statute prohibits a group health plan from taking into account the Medicare entitlement of active employees or their family members if such employees are still considered in current employment status. The MSP rules relating to group health plans cover those working who are 65 or older and applies to employers with 20 or more employees. Under the MSP statute, employers are prohibited from discouraging employees from enrolling in their group health plan or from offering financial or other incentives for an individual entitled to Medicare not to enroll (or to terminate enrollment) under a group health plan that would otherwise be a primary plan. An employer must be able to prove that an employee or spouse aged 65 or older has been given the option to remain covered by the employer-provided health plan. Any entity found in violation is subject to a civil monetary penalty of up to $5,000 for each found violation.