The human resources staff at your big business needs to know what to say when employees ask, “What is Medigap?
” Medigap, or Medicare Supplement Insurance provides important insurance benefits to Medicare users not covered by the original plan.
Many baby boomers are reaching retirement age but continue to work. In fact, 40% (2018) of people nearing retirement plan to stay on beyond the traditional 65-year retirement age, as compared to only 12% in 1995.
What is Medigap?
Today, many employees begin to use Medicare before they retire. It often costs less than employer-sponsored health plans. Medigap helps fill in the gap remaining after Medicare pays its part, including:
Medical costs outside the U.S.
Private insurance companies sell Medigap to individuals having Medicare Part A and Part B. If your employee uses the Medicare Advantage Plan, though, law probits that person from using Medigap. As the full name implies, it supplements original Medicare benefits, so it has a premium cost in addition to the monthly Part B premium.
Medigap policies cover individuals, so your employees will hold a policy independent of his or her spouse. Unlike policies that will not cover individuals with pre-existing conditions, anyone who can pay the premium, regardless of health problems, can renew his or her policy. Likewise, Insurance companies cannot deny plan renewal as long as policyholders continue paying.
Medigap policies no longer cover prescription drugs. However the Medicare Prescription Drug Plan (Part D), can cover such expenses, so your HR staff must understand this plan, as well.
Of course, Medigap policies cannot cover everything and long-term, vision, and dental care all fall outside its limits. Likewise, it does not pay for hearing aids, eyeglasses, or private-duty nursing.
Distinguishing Medigap from Other Policies
The federal website, Medicare.com makes a point of explicitly stating what Medigap is not. Your employees using Medicare and associated policies may become confused about which plans cover specific healthcare components. Your HR staff should know how to explain what is Medigap and what makes it different from other policies, like …
Medicare Advantage Plans, such as HMOs, PPOs, or Private Fee-for-Service Plans
Medicare Prescription Drug Plans
Employer or union plans, including the Federal Employees Health Benefits Program (FEHBP)
Long-term care insurance policies
Indian Health Service, Tribal, and Urban Indian Health plans
What is Medigap Policy on Enrollment Timing?
When your employees want a completely different Medigap policy or decide to switch to a Medicare Advantage Plan with prescription drug coverage, your HR staff need to understand the implications of enrollment timing. Late penalties may apply under certain circumstances, like when …
drug coverage is not creditable prescription drug coverage
63 or more days laps before your employee’s new Medicare drug coverage begins
Different insurance companies offer different Medigap policies, and your employees may need guidance in locating and selecting policies. Your HR staff should understand these options, and they should also know how and when to help employees call the state Health Insurance Assistance Program (SHIP) or the State Insurance Department for further assistance.
Anyone who has ever declared annual taxes knows the perils of trying to navigate any federal policy. The feds have worked hard to make Medicare as simple as possible, but you’ll see that employees often do not understand their plans or even know where to find out what coverage they have. Training your HR staff to answer the question, “What is Medigap?” and how to navigate the Medicare system can help your employees see that your company really cares about them.