Medicare benefits start at age 65, but many people continue working past that age, either by choice or need. It is important to understand how Medicare and employer coverage work together.
Depending on your circumstances, Medicare is either the primary or secondary insurer. The primary insurer pays any medical bills first up to the limits of its coverage. The secondary payer covers costs the primary insurer doesn't cover (although it may not cover all costs). Knowing whether Medicare is primary or secondary to your current coverage is crucial because it determines whether you need to sign up for Medicare Part B when you first become eligible. If Medicare is the primary insurer and you fail to sign up for Part B, your eventual Medicare Part B premium could start going up 10 percent for each 12-month period that you could have had Medicare Part B, but did not take it.
Here are the rules governing whether Medicare coverage will be primary or secondary:
- If your employer or your spouse's employer has 20 or more employees, your employer's insurance will be the primary insurer and Medicare is the secondary payer. If your employer or your spouse's employer has fewer than 20 employees, Medicare will be the primary insurer and your employer's insurance will be the secondary insurer.
- If you are retired and still covered by your employer's group health insurance plan, Medicare pays first and your former employer's plan pays second.
- If you receive both Social Security Disability Insurance and Medicare and your employer has 100 or more employees, your employer's insurance pays first. Some employers are part of a multi-employer plan and if at least one employer in that plan has 20 employees or more, the employer's insurance pays first. If your employer has fewer than 100 employees, Medicare will pay first.
- If you have end stage renal disease (ESRD) and are in the first 30 months of Medicare coverage of ESRD, your employer's plan pays first. After the first 30 months, Medicare becomes the primary insurer. It does not matter how many employees your employer has.
- If you are self-employed and have a group health plan that covers yourself and at least one other person, Medicare pays first. Note that if you are self-employed, you may be able to deduct Medicare premiums from your income taxes by including the premiums in the self-employed health insurance deduction.
If your employer's insurance is the primary insurer, the employer must offer you and your spouse the same coverage that it offers to younger employees. It also cannot deny you coverage, cancel your coverage once you become eligible for Medicare, or charge you more for premiums, deductibles, and copays.
On June 13, 2017, Amy E. Stratton presented “Protecting Your Construction Business from Common Lawsuits” to members of the Center for Women & Enterprise. She was able to share tips about ways to avoid some of the most common law suits in the residential and commercial construction field through comprehensive contract drafting and alternative dispute resolution.
On May 10, 2017, Amy Stratton lectured to the budding entrepreneurs of the Rhode Island Center for Women & Enterprise about legal considerations for business owners. It was a great chance for Rhode Island business owners from diverse industries to learn about some common pitfalls relating to legal structure, contracts and business financing.
On April 27-28, 2017, Kristen Moonan and Amy Stratton attended the annual NAELA (National Academy of Elder Law Attorneys) conference in Boston, Massachusetts. They learned cutting edge planning techniques and shared planning strategies with elder law attorneys from around the country.
During the first three weeks of December 2016, Moonan, Stratton & Waldman, LLP assisted a local project called DVDs4Vets, which is collecting new and used DVD’s for distribution to local veterans’ homes and rehab facilities helping soldiers.
On Thursday, October 27, 2016, Kristen Moonan and Amy Stratton presented Estate Planning Basics to the residents of Capitol Ridge at Providence Assisted Living facility. The presentation gave residents a unique opportunity to ask questions about estate planning and probate without having to leave their home.
On Sunday, September 25, 2016, Moonan, Stratton & Waldman, LLP participated in the Rhode Island Alzheimer’s Associations’ Walk to End Alzheimer’s at Roger Williams Park in Providence by sponsoring a team to raise money for this worthy cause. It was a great success and we are looking forward to our continued active participation in the future!
Medicaid has strict asset rules that compel many applicants to “spend down” their assets before they can qualify for coverage. It is important to know what you can spend your money on without endangering Medicaid eligibility.
In order to be eligible for Medicaid, applicants must have no more than $2,000 in “countable” assets (the dollar figure may be slightly more, depending on the state). In addition, Medicaid also has strict asset transfer rules. If an applicant transfers assets for less than market value, the applicant will be ineligible for Medicaid for a period of time. Applicants for Medicaid and their spouses may protect savings by spending them on non-countable assets.
A Medicaid applicant can spend down money on anything that would benefit the applicant. Following are examples of what a Medicaid applicant may be able to spend money on:
- Prepay funeral expenses. A prepaid or pre-need funeral contract allows you to purchase funeral goods and services before you die.
- Pay off a mortgage, car loan, or credit card debts. You can pay off the debt fully or make partial payment.
- Make repairs to a home. Fix the roof, make the house handicapped accessible, buy new carpet, etc.
- Replace an old automobile. This can be useful for the healthy spouse.
- Update your personal effects. Buy household goods or personal comfort objects. Buy a new wardrobe, electronics, or furniture.
- Medical care and equipment. Purchase items that aren't covered by Medicare or Medicaid. See a dentist or get your eyes checked if those items aren't covered by your insurance.
- Pay for more care at home. Make sure you get any caregiving agreements in writing, especially if family members are providing the care.
- Buy a new home. A home can be an exempt asset, so it may be possible to purchase a new home.
In the case of married couples, it is often important that any spend-down steps be taken only after the unhealthy spouse moves to a nursing home if this would affect the amount of money the community spouse would get to keep, called the community spouse's resource allowance.
Each state has different requirements for spend down. Before making any spend down plans, consult with your elder law attorney.
Caring for an elderly parent can be stressful for families. Siblings may disagree over how to provide care or where a parent will live, and if these squabbles escalate into a guardianship battle, it can cost the family thousands of dollars. To avoid this, lawyers have begun drafting sibling agreements (also called family care agreements).
If a parent becomes incapacitated and can no longer take care of him- or herself, questions can come up between siblings over where a parent should live, who should manage the parent's money, or who will assume primary caregiving duties. A sibling agreement can address these issues and provide consequences if the agreement is not followed.
Sibling agreements are not meant to replace a trust or a power of attorney. Instead the agreement can complement these valuable estate planning tools by providing guidance for the trustee or the holder of the power of attorney. The following are some examples of topics an agreement might cover:
- Which sibling has primary care of a parent and how caregiving duties will be divided among siblings
- Whether a sibling will be reimbursed for caring for a parent
- Where the parent should live — with a child, in assisted living, in a nursing home?
- How to decide whether a parent should move into a nursing home
- How the parent's money will be managed
- Whether the siblings will contribute financially to the parent's care
If the siblings can't reach an agreement, a geriatric care manager or mediator can help draft the agreement. Mediators can also help if one of the siblings breaches the agreement. Consequences for breaching a sibling agreement could be losing a power of attorney or a reduction in inheritance.
To draft a sibling agreement, talk to your attorney.