While your employer can’t pay your Medicare premiums in the true sense, you’ll be glad to know that they may reimburse you for your premium costs! To compensate you, your employer will need to create a Section 105 Medical Reimbursement Plan. We’re here to help you understand your options for reimbursement of employer premiums you’ve paid.
Find Medicare Plans in 3 Easy Steps
We can help find the right Medicare plans for you today
Can an Employer Pay My Medicare Supplement Premiums?
Medicare Supplement coverage can’t be paid directly by your employer. However, you can get a refund for your monthly premiums from your employer. But, your employer must have a Section 105 plan in place. They can’t write you a check for your Medigap coverage itself, but they CAN refund you for your monthly Medigap premiums, as long as they arrange a Section 105 plan.
There may be instances you can’t get a refund for your Medigap premium. This doesn’t mean you should default to your employer’s health coverage for secondary insurance. Many times, Medigap plans are less costly and provide a wider variety of coverage than your employer’s health plan.
How Medicare Premium Reimbursement Works with an Employer Section 105 Plan
A Medicare premium reimbursement is a fantastic way for active employees to get refunds of their premiums. Often, premiums may cost less than group insurance at your workplace. If you prefer Medicare to your group coverage, you may be eligible to get premium reimbursements. This depends on the program your company has in place. Further, keep in mind that being reimbursed by Medicare versus being reimbursed by your employer are two different topics.
What is a Section 105 Plan?
A Section 105 plan is a reimbursement health plan that lets companies repay employees for their medical costs on a tax-exempt basis. Although there are several different plan options, the most popular Section 105 program is a Health Reimbursement Arrangement plan.
Medicare Premium Reimbursement Arrangement
The type of Section 105 plans employers offers will depend on the employer’s size and whether they provide a group health plan. A Health Reimbursement Arrangement is a system covered by Section 105. This arrangement allows your employer to reimburse you for your premiums.
Some HRAs at employers that provide group coverage require that your employer’s payment plan ties in with the group health plan. Contact a human resources representative at your organization if you have questions about the plan offered to you.
We’ll explain two common types of HRAs offered by employers that can help with your Medicare premiums.
Individual Coverage Health Reimbursement Arrangement (ICHRA)
To be eligible for an Individual Coverage Health Reimbursement Arrangement, you’ll need Medicare Part A and Part B, or Medicare Part C. You can use the ICHRA to reimburse premiums for Medicare and Medigap as well as other costs.
Find Medicare Plans in 3 Easy Steps
We can help find the right Medicare plans for you today
Employers have more choice in which medical costs are eligible for reimbursement under an ICHRA. The terms must be equal for all employees, and medical costs can’t be designed around what Medicare will or won’t pay.
If your employer offers an ICHRA, you must choose between the group policy option and having the ICHRA cover your Medicare costs.
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
If your organization employs fewer than 50 full-time workers and doesn’t offer a group health plan, it may provide a Qualified Small Employer Health Reimbursement Account. To take part in a QSEHRA, you must have minimum essential coverage (MEC), which means enrolling in Part A. Enrolling in only Part B doesn’t count as MEC, but enrolling in Part C does because it includes Part A benefits.
If you have MEC, a QSEHRA will reimburse almost all Medicare premiums; including Part D, Medigap, and Advantage. The only premiums that don’t qualify for reimbursement through a QSEHRA are Part A premiums. Most people do not have to pay these premiums but those who have worked fewer than 40 quarters must pay monthly.
Reimbursements under a QSEHRA are tax-free. If your workplace offers a QSEHRA, talk to a human resources representative about getting your premiums covered.
FAQs
How to Enroll in Medicare while Still Actively Working
Like so many others, you may have many questions about whether you should enroll in Medicare while still actively working. Making sense of primary and secondary coverage can prove exhausting and frustrating.
Everyone that is Medicare eligible can benefit from the guide to health insurance. Also, our team at MedicareFAQ can help you understand how insurance works. We can also help you to be ready for the monthly costs you may face. Call our team for a free rate comparison today! You can also use our online quote tool to have a premium rate comparison prepared for you.
Enter ZIP Code
Enter your ZIP code to pull plan options available in your area.
Compare Plans
Select which Medicare plans you would like to compare in your area.
Get Quote
Compare rates side by side with plans & carriers available in your area.
I retired in 2004, 16 years ago on Medicare. My employer was under a 105 medicare premium reimbursement plan. and did tell me about the program for 16 years. So i did not know that i should have been reimbursed for my medicare premiums over all those years. They said that according to their plan rules they only have to make 2 months worth of back payments which mean i must take a loss on 16 years of payments. I appreciate your insight on this because it does not seem right. To me these payments should have been initiated when i retired. In 2019 was the first year they asked for SSA verification of benefits for this purpose. I submitted the verification to them but they couldn’t find it. I submitted the 2020 verification and called to confirm receipt. This is when i found out this benefit was available.
Hi Jacqueline! Thank you for your question. I don’t have enough information to provide you with a straight forward answer. There are many different types of Section 105 plans offered through employers. They are all designed differently and have specific guidelines. If the plan rules have limits, such as only having to reimburse you for two months worth of back payments, then, unfortunately, there’s nothing you can do. However, there might be rules in place where your employer has to prove they told you about the section 105 plan upon employment and/or retirement. Hopefully, this helps!
I just noticed yesterday that my employer has been deducting Medicare f or 4 years. I have been receiving social security retirement since 2018.
Your INFO is greatly appreciated. I will go to payroll office and se what they can do form. For sure, stop deduction.