1. Crowe & Associates Lowering Employers’ Insurance Cost With Medicare
25% of Americans work past age 65
3 out of 5 people age 40 to 60 plan to work beyond age 65
Creates a huge cost for employers offering health insurance benefits to employees

2. Crowe & Associates
Average cost of group based health insurance for someone age 65+ in Connecticut
Example #1:
Employers with 3+ enrolled
Example plan: $25/$40 copay with $1,500 major services deductible
Female age 66 = $1,500 month average premium
$18,000 annual premium

3. Crowe & Associates Example #2: Employers with 3+ enrolled
Example plan: $30/50 copay with $3,000 major services deductible and 30% co-insurance
Male age 66 = $1,200 month average premium
$14,400 annual premium

4. Crowe & Associates Example #3:
Employers with 3+ enrolled
Example plan: $6,000 high deductible health plan
Female age 66 = $900 month average premium
$10,800 annual premium
Rates are 20% higher for business with 1-2 employees

5. Crowe & Associates Health insurance cost going up every year
Average increase is 6.6%
Average increase in CT is 8.9%
No realistic hope of increases going down

6. Crowe & Associates
Average employer in CT contributes 72% toward individual employees as of 2015
Example costs:
$25/$40 -$1,500 plan is 72% = $12,960 in annual average employer costs
$30/$50 -$3,000 plan is 72% = $10,368 in annual average employer costs
$6,000 HSA plan is 72% = $7,776 in annual average employer costs

7. Crowe & Associates
Medicare as an alternative for 65 and older active employees
Medicare Part A and B covers 80% of medical expenditures
Part B costs $134 a month for most enrollees
Medicare Part D provides coverage towards drug costs
Average cost is $28 to $42 a month for a drug plan

8. Crowe & Associates
Confirm that employee age 65 and older has Medicare part A (most enrolled automatically at age 65)
Employees age 65 and older can enroll in Medicare Part B (if not already enrolled)
Dropping group coverage creates a special election to enroll in part B
Part B costs can be higher for those with higher incomes

9. Crowe & Associates The employee enrolls in a Medicare supplement plan
Medicare supplements cover the medical costs not covered by Medicare A and B
Go to any doctor that accepts Medicare anywhere in the United States
No referrals needed
Coverage outside of the US on certain plans

10. Crowe & Associates
Plan F supplement covers 100% of medical services not covered by Medicare for $240 a month
Plan N supplement covers all costs not covered by Medicare except:
$183 deductible
Up to $20 cost share for office visits
$50 for emergency room visits
Cost is $156 a month

11. Crowe & Associates Enroll in a Medicare Part D Rx plan
Use the CMS plan finder website to find the best plan based on the current prescriptions
Premiums per month usually range from $28 to $42 a month depending on the drug plan

12. Crowe & Associates Cost of a plan F with a drug plan
$134 month for part B of Medicare
$240 a month for the plan F supplement
$35 a month for a drug plan
Total cost is $409 a month x 12 months = $4,908 a year
The $25/$40 health plan with a $1,500 major deducible costs $18,000 a year vs. $4,908 total premium using the Medicare Supplement Plan

13. Crowe & Associates Cost of a plan N with a drug plan
$134 month for part B of Medicare
$156 a month for the plan F supplement
$35 a month for a drug plan
Total cost is $325 a month x 12 months = $3,900 a year
The $25/$40 health plan with a $1,500 major deducible costs $18,000 a year vs. $3,900 total premium using the Medicare Supplement Plan

14. Crowe & Associates Company funding of alternative strategy
A number of benefit consultants suggest using a section 105 plan for premium reimbursement
It is suggested not to use a 105 plan due to recent changes in regulations and compliance
We suggest adding the extra premium to payroll or using a Small Business HRA plan.
Small business HRA plans are new for 2017
Groups of 50 employees and less may utilize them
Group must offer MEC benefits in order to offer them

15. Crowe & Associates Total cost examples using Medicare Plan N
Assuming employer pays all associates Medicare premiums
Company paying 72% of $25/$40 - $1,500 plan
$18,000 annual 72% = $12,960 employer cost
The alternative would be to have the employee go on Medicare and pay associated premium costs
Employer pays employee additional income of $3, % cost of payroll expenses = $4,290

16. Crowe & Associates Total cost examples using Medicare Plan N
Payroll expenses include Social Security, FICA and workers compensation premium
$12,960 on health plan vs. $4,290 using Medicare strategy
Total savings per employee per year of $8,670
In addition to the substantial company savings, the employee has a plan with much less out of pocket vs. the traditional health plan.

17. Crowe & Associates
Medicare Supplement average rate increase is 2.2% per year.
Medicare Part B average increase is 1% -2% per year
Much more manageable rate/premium increase for employer to budget.
Medicare supplement benefits do not change upon renewal as they are standardized plans.
No need to compare benefits from one company to the next. Only need to make sure employee is on the company that is offering supplement at lowest cost.

18. QUESTIONS? Crowe & Associates
Our agency can answer all Medicare enrollment and benefit questions for the employees
QUESTIONS?
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