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Medicare vs. Employer Health Coverage

Question:
Can a church with an active employee 65 years of age drop the employee's health coverage in favor of assisting the Medicare eligible employee with Medicare premiums?

Answer:
"The Age Discrimination in Employment Act (ADEA) which is administered by the Equal Employment Opportunity Commission requires employers of 20 or more employees to offer to their age 65 or over employees and to the age 65 or over spouses of employees of any age, the same coverage, and under the same conditions, as they offer to employees and employees" spouses under age 65."
(https://secure.ssa.gov/poms.nsf/lnx/0600620177)

The following source addresses employer reimbursements of Medicare premiums: "In general, when an employee (or his or her spouse) is eligible for Medicare due to age, an employer may reimburse his or her Medicare premiums only when: 1 The employer’s group health plan is a secondary payer to Medicare because the employer has fewer than 20 employees; AND 2 The reimbursement arrangement complies with the ACA because it is integrated with the employer’s group health plan (or covers fewer than two employees)."
https://www.careplusbenefits.com/Portals/0/InSite/Compliance/2015%20Compliance%20Bulletins/LegislativeAlert4515PayingEmployeesMedicarePremiums121115.pdf

"Medicare beneficiaries are free to reject the employer coverage, in which case they retain Medicare as the primary coverage. When Medicare is primary payer, employers cannot offer such employees or their spouses secondary coverage of services covered by Medicare. However, an employer may offer a supplemental plan that covers items and services not covered by Medicare such as eyeglasses or routine dental care."
https://secure.ssa.gov/poms.nsf/lnx/0600620177

As can be observed from SSA.gov, employees otherwise eligible for health coverage through their employer cannot be denied coverage because of their Medicare eligibility. However, some organizations with one employee, for example, have dropped their plans and increased taxable cash compensation to assist the employee with the cost of Medicare.



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