Medicare and Your BMC Medical Benefits

If you are an active employee or covered dependent and you become eligible for Medicare, you can choose to:

• Continue primary coverage under the BMC plans. You can also enroll in Medicare, but Medicare will be the secondary payer. You can enroll in both Medicare Part A and Part B, or enroll in Part A only and delay enrollment in Part B.
• Drop coverage under the BMC plans and have Medicare as your primary source of coverage.

If you delay enrollment in Medicare beyond age 65 because you are covered by the BMC plans, you will be able to enroll in Medicare later (after you are no longer covered by BMC) without the usual late enrollment penalty. Typically, you will have a “special enrollment period” of eight months from the time you no longer have employer-based coverage to enroll in Medicare. If you wait longer than eight months to enroll, you will lose your special enrollment rights and will have to wait until the annual enrollment period, and you will pay higher Medicare premiums.

Additional rules apply concerning COBRA coverage and Medicare. For more information, please see COBRA: If You and Your Dependents Lose Health Care Coverage.

If you are already Medicare-eligible or expect to be shortly, please contact the Social Security Administration at the Web address or phone number listed in the Plan Contact Information section of this guide.

How Medicare Affects Your Health Savings Account

If you are age 65 or older, you can contribute to a Health Savings Account (HSA) and receive BMC HSA contributions until the month you enroll in Medicare. You are responsible for confirming that you have not enrolled in any Medicare plan by contacting the Social Security Administration at 1-800-772-1213. Contributing to an HSA while enrolled in Medicare will result in tax liabilities. For more information, see page 3 of the IRS publication, Health Savings Accounts and Other Tax Favored Health Plans.

If you are planning to enroll in Medicare, call the Benefits Center at 1-877-262-4849 to have your HSA contributions stopped on the first of the month that your Medicare coverage becomes effective. Remember that when you sign up for Social Security retirement benefits and are at least six months beyond your full retirement age (currently 66), Social Security will give you six months of retirement “back pay” and backdate your Medicare Part A enrollment six months. Under IRS rules you are liable to pay tax penalties on any contributions to your HSA account during the six months you had Medicare Part A . To avoid the penalties, you need to stop all contributions to your HSA account up to six months before you sign up for your Social Security retirement benefits.

You can continue coverage under the HSA Plan (medical insurance only) and use your remaining HSA funds to pay for qualified medical expenses, including Medicare premiums.