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health care services. It does not cover
everything, nor does it cover the total
cost for many of the covered services or
medical supplies. Provided an employee
or spouse has 40 or more quarters of
Medicare-covered employment, there is
no cost associated with Part A.
Q: What is Medicare Part B?
A: A medical insurance provided by the
federal government that covers
Medicare eligible physician services,
outpatient services, certain home
health services and durable medical
equipment. Though many services and
products are covered, Part B is not a 100
percent insurance coverage plan. It
costs $96.40 per month this year,
provided your current income does not
exceed $85,000 (single) or $170,000
(married couple).
Q: If I’m still offering employees
insurance, should they take
Medicare or not?
A: COSE suggests employees turning 65
enroll in Medicare Part A and Part B. If
they do not receive a packet, they
should contact Medicare directly.
If your company has fewer than 20
employees, Medicare is primary. This
means Medicare pays claims first and
the company’s insurance pays
second. If an employee opts out of
Medicare Part B, he or she may incur
large out-of-pocket expenses since they
are now responsible for the amount
Medicare Part B would have paid.
If the company has more than 20
employees, the company insurance
pays first and Medicare pays second.
Q: Do employees need insurance in
conjunction with Medicare?
A: It’s not necessary, but secondary
insurance will help minimize out-ofpocket
expenses. Remember, Medicare
does not cover everything, nor does it
cover the total cost for many of the
covered services or medical supplies.
Q: Do employees have to notify
Medical Mutual of Ohio when they
are turning 65?
A: Yes, employees should call Medical
Mutual of Ohio’s customer service
department when they receive their
Medicare packet.
Q: Will employee coverage remain
the same if enrolled in Medicare
and company insurance plan?
A: As the employer, you need to make a
plan selection for active employees
turning 65. Your choices include
Medifil and Medifil without Rx, which
will change your employee’s coverage.
And Medicare Carve Out, which, in
most cases, will keep an employee’s
coverage the same.
Q: What Is Medicare Part D?
A: Medicare Part D is a stand-alone
prescription drug benefits plan
available to all individuals turning 65
years of age.
Q: Do employees need to elect a
Part D plan?
A: No, however you are responsible for
notifying your employees as to whether or
not the plan elected is considered
creditable by government standards
associated with the Medicare Part D
plan. Visit cms.hhs.gov/creditable
coverage for information on creditable
plans. If not creditable, the employees
need to purchase a Part D plan on their
own so they don’t incur a monthly penalty.
Q: What is the Part D “Doughnut
Hole” or “Gap”?
A: A gap in prescription drug coverage
caused when an employee’s
prescriptions’ total cost reaches $2,700.
Employees then pay the prescriptions’
full price until the total cost reaches
$6,153. Then catastrophic coverage
starts and employees pay
approximately 5 percent of drug costs
until year end.
Benefits Jargon Tune Up
Aggregate deductible: The total family deductible must be
met prior to benefits being paid. The deductible can be satisfied
by one or multiple persons.
Brand-name drug: A drug protected by a patent.
Coinsurance: The cost-sharing percentage that an individual
must pay after the deductible amount has been met.
Copayment (copay): A fixed dollar amount an individual pays
for specific services covered by his or her health plan. The
health plan pays the rest.
Deductible: The fixed dollar amount individuals must pay from
their own funds for covered medical services before insurance
coverage begins. Deductible typically calculates Jan. 1 to Dec. 31.
Embedded deductible: Benefits will begin to pay when one
person meets the single deductible, or when two or more
people satisfy the family deductible.
Formulary: The list of brand name and generic drugs covered
by a health plan.
Generic drug: A drug that is a chemical and therapeutic
equivalent of a brand-name drug where the patent has expired
and is usually less expensive.
Mail order/mail service pharmacy: A pharmacy that
dispenses at least a 90-day supply of maintenance prescription
medications through the mail.
Medicare: A federal health plan that pays for medical services
for qualified seniors, disabled persons, and people with
end-state renal disease.
18 • COSE Update Special Insert • June 2009 (216) 592-2222