Non-U.S. group health plans meet Medicare deferral standard

in /Ask Phil by

Bettyrose – United Kingdom: I’ve been living in the U.K. for over 20 years and just turned 65. I understand I should sign up for Part A, but do I also need to sign up for Part B if I’m living outside the U.S.? There is always an outside chance that we may end up back home in Chicago. Also, I am still working and plan to retire in October. We have socialized medicine here in the U.K. I did some reading, but it’s somewhat confusing.

Phil Moeller: People who turn 65 and don’t get Medicare can face potentially steep late-enrollment penalties when they finally get around to signing up. However, those who are actively employed and have group health plans, often referred to as GHPs, do not need to sign up for Medicare until they leave their jobs, regardless of their age. I have always assumed that these qualifying health plans needed to be in the U.S.

Wrong! I should have followed my own number one Medicare rule: Never assume!

According to the Centers for Medicare & Medicaid Services, so long as a person’s health insurance qualifies as a group health plan, they need not get Medicare at 65 regardless of where they live or who provides their health insurance. When they do retire and leave their plan, they will have an eight-month special enrollment period during which they can sign up for basic Medicare and any other Medicare policies.

“A GHP does not have to be in the United States, and the individual (or spouse/family member for disabled) is not required to be working in the United States,” a spokesman explained, citing an agency webpage explanation. “CMS considers a person working for a foreign employer who has a plan that meets the definition of a GHP to meet the requirement for GHP coverage. This also applies to individuals working in countries with national health plans.”

So if you have a GHP with your current employer, the odds are good that you don’t need to worry about getting Part B right now. Again, do not assume this is the case. The Social Security Administration, which administers many Medicare rules, has an explanation of what it takes to qualify as a GHP.

Here’s an excerpt:

A GHP is any plan of, or contributed to by, one or more employers to provide health benefits or medical care (directly or otherwise) to current or former employees, the employer, or their families. The term GHP applies to the following types of plans:

  • self-insured plans,
  • plans of governmental entities (Federal, State, and local),
  • employee organizational plans (e.g., union plans or employee health and welfare funds),
  • employee pay-all plans (i.e., plans that are approved or sponsored by the employer or employee organization, but receives no financial contribution from them), and national health plans in foreign countries.

I suggest you touch base with the employee benefits office at your employer and raise this issue. Please let me know how you fare, particularly if you are told that your current plan does not qualify.