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Group Medicare —Retiree Health Coverage for Employers

Employers, unions and associations that provide health benefits to Medicare-eligible retirees have specialized options beyond individual Medicare plans. Group Medicare programs allow organizations to provide structured, coordinated Medicare coverage as a valued retiree benefit.

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Overview

What Is Group Medicare?

Group Medicare refers to employer-sponsored or group-sponsored Medicare coverage for retirees and Medicare-eligible employees. Unlike individual Medicare plans, group Medicare programs are negotiated at the group level, often with more consistent pricing and administration.

Employer Group Waiver Plans (EGWPs). Medicare Advantage plans specifically designed for employer, union or association groups. They allow the sponsor to customize benefits beyond standard Medicare Advantage offerings, often at negotiated rates.

Group Medicare Supplement. Employers can offer group Medigap coverage to Medicare-eligible retirees. Group underwriting may make coverage available to retirees who would not qualify individually due to health history.

Employer contribution strategy. Group programs allow employers to structure defined contributions toward retiree Medicare coverage, providing a benefit while managing cost exposure.

Group vs. individual Medicare

  • Group: employer contribution reduces retiree cost
  • Group: customized benefits possible
  • Group: simplified enrollment and administration
  • Group: underwriting may be more favorable
  • Individual: more plan choice and flexibility
Program Types

Group Medicare Program Options

Most Common

Employer Group Waiver Plans

Medicare Advantage plans customized for employer and union groups. Allow sponsors to offer supplemental benefits, coordinate with existing retiree benefits, and potentially reduce retiree premiums below standard market rates.

Group Medigap Programs

Employer-sponsored Medicare Supplement plans for retiree populations. Group underwriting may allow coverage for retirees who would not qualify individually, with the broad provider access of Original Medicare.

Individual Coverage HRA (ICHRA)

Employers provide a defined monthly amount through an HRA that retirees use to purchase individual Medicare coverage. Predictable employer cost, maximum flexibility for retirees.

Retiree Drug Subsidy (RDS)

Federal subsidy available to employers providing prescription drug coverage to Medicare-eligible retirees that is at least as generous as Part D. The employer keeps its own drug plan and receives a subsidy from CMS.

Coordination with Active Plans

For employers with both active employees and Medicare-eligible retirees, coordination between the two programs requires careful structuring to comply with Medicare Secondary Payer rules.

Medicare Advantage Group Plans

Standard Medicare Advantage plans available to groups with enough Medicare-eligible enrollees, with care management and wellness benefits tailored to retiree populations.

Regulatory Requirements

Compliance considerations

Employer-sponsored Medicare programs involve significant compliance requirements. We help organizations understand their obligations and design programs that meet regulatory standards.

Medicare Secondary Payer (MSP). These rules determine whether Medicare or an employer group health plan pays first for Medicare-eligible employees. The rules depend on employer size and whether the individual is actively employed or retired. Compliance is critical.

Creditable coverage disclosure. Employers providing prescription drug coverage to Medicare-eligible individuals must annually disclose to those individuals and to CMS whether their drug coverage is creditable. This affects Part D late enrollment penalties.

ERISA and plan documents. Employer-sponsored retiree health plans are subject to ERISA. Maintaining compliant plan documents, summary plan descriptions and COBRA administration are important obligations.

Design considerations

  • Retiree population size and demographics
  • Geographic distribution of retirees
  • Employer contribution level and budget
  • Current retiree benefits being replaced
  • ERISA and MSP compliance

Frequently Asked Questions

What is an Employer Group Waiver Plan?
An EGWP is a type of Medicare Advantage plan specifically designed for employer, union or association groups. They allow the group sponsor to offer customized benefits beyond what standard Medicare Advantage plans provide, often at negotiated rates. EGWPs are common among employers and unions that want to provide Medicare coverage as a retiree benefit while maintaining control over benefit design.
How many retirees do we need to offer a Group Medicare program?
Minimum group size requirements vary by carrier and program type. Some group Medicare programs are available to groups as small as 2 to 5 eligible enrollees. EGWPs typically require larger groups. We will assess your retiree population and identify which structures are available based on your group size and geography.
What is the Medicare Secondary Payer rule?
MSP rules determine whether Medicare or an employer plan pays first for covered services. For retirees, Medicare is typically primary and any employer plan is secondary. For actively employed individuals at large employers (20 or more employees), the employer plan is typically primary and Medicare secondary. Compliance is legally required.
Does our organization need to disclose creditable coverage?
Yes. Employers providing prescription drug coverage to Medicare-eligible individuals must annually notify those individuals whether the coverage is creditable, and must report this to CMS. The disclosure affects whether retirees will face a Part D late enrollment penalty if they later enroll without creditable coverage.
Can we give retirees a stipend to purchase their own Medicare plans?
Yes. An Individual Coverage HRA (ICHRA) is a tax-advantaged way for employers to provide a defined monthly contribution that retirees use to purchase individual Medicare coverage. This provides predictable employer cost and maximum flexibility for retirees.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1–800–MEDICARE to get information on all of your options.

Design the right Group Medicare program for your retirees.

We help employers, unions and associations evaluate options from EGWPs to individual coverage HRAs.

Talk to a Benefits Advisor Call (206) 878-1404

No obligation. Monday–Friday, 9:00 AM – 5:00 PM.