COBRA, Post 65 Retiree Benefits and Younger Spouse

scottorr · October 2003

Okay, we are making our formal presentation to the board on our retiree benefits and I need some clarification. We will be offering our employees pre and post 65 health benefits. If an employee is covering their spouse and the employee turns 65 and becomes medicare eligible, their current health care coverage becomes secondary for the retired employee. Do we then create a seperate indivual plan for the spouse or do we offer the spouse COBRA? If we create a second plan how long do we keep the spouse on the plan? Any help would be greatly appreciated.

Pearce · October 2003

The fact that the Retiree is Medicare eligible does necessarily make a change (unless you plan specifies otherwise) in the benefit of the Retiree's dependents. COBRA would only be offered to the dependent if the dependent was losing coverage because the Retiree was Medicare eligible/enrolled.

E Wart · October 2003

Sorry, I am confused. You speak of employees and then you speak of retirees. I don't know which you are offering the health benefits to. If an employee is covered under your group insurance (no matter their age) and they turn 65 and become eligible for Medicare, they are still primary under your policy and medicare is secondary. Now this may be different for retiress, but don't know which one you are asking about. I would recommend you talk with your broker to get this straightened out. I don't think you need a second plan, but can certainly have a second plan for retired employees (which would be a separate class.)
E Wart

MrCreosote · October 2003

When the employee turns 65 they don't automatically become medicare primary. They can't be medicare primary as long as they are employed and have your insurance available. And you can't make yours unavailable based on age.
If a retiree is Medicare primary but their spouse is not old enough for Medicare eligibility, they continue on your insurance but pay a premium that is higher than a retiree with a Medicare-eligible spouse. The rate for a retiree with a medicare-primary spouse is just the individual retiree rate times two. The rate for a retiree with a non-Medicare-primary spouse is the individual retiree rate plus the regular employee rate. When the spouse turns 65, they become Medicare primary and the premium decreases. That's how it works with our BC/BS plan, anyway.

COBRA, Post 65 Retiree Benefits and Younger Spouse

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