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Group Medicare Advantage Plans Explained
Group Medicare Advantage Plans Explained
How Group Benefits Brokers can bring solutions to their Employer clients
You may have noticed the increase in interest and enrollment in Medicare Advantage plans but may not understand how Group Medicare plans work for employers.
Medicare Advantage plans are available to retirees on an individual enrollment level, but they can also be offered by plan sponsors to current and former employees. These plans may be referred to as Group Medicare Advantage plans, Employer Group Waiver Plans (EGWPs) or — more commonly — as Group Medicare plans. The purpose of Group Medicare plans is to enable employers to provide health plans to their retirees.
How they work
Historically, Original Medicare would cover about 80 to 85% of claims for Medicare-eligible retirees. Then, retirees and eligible employees could search for a Medicare secondary plan (sometimes also referred to as Medicare Supplemental) to cover the rest.
In contrast, Group Medicare plans provide traditional Medicare benefits through a private carrier such as Humana. The plans can also include enhanced benefits, like health and wellness programs, dental, vision and hearing benefits, and expanded drug coverage. Additional services offered varies by plan and can even include coverage for pre-65 retirees who aren’t yet eligible for Medicare. Providing these benefits to retirees under a single administrator helps retirees avoid the frustration and confusion that can often accompany the coordination of benefits between multiple carriers/plans.
CMS subsidizes private carriers for the administration of their plans. All plans have a STARS Rating, which reflects their quality based on the Five-Star Quality Rating System which is managed by CMS. Plans are rated on a scale of 1-5 stars, with 5 being the best.
Enrollment trends
The popularity of Medicare Advantage plans is growing. According to Kaiser Family Foundation, in 2022, more than 28 million people were enrolled in a Medicare Advantage plan, accounting for 48% of the eligible Medicare population. (https://bit.ly/3rth0p1)
As baby boomers retire, the eligible population — and opportunity — for these plans will continue to grow. The Census Bureau says that by 2031, the U.S. population over the age of 65 will number an estimated 75 million, almost double what it was just in 2008.
Advantages of Group Medicare
Employers can also benefit from offering their employees a Group Medicare plan. According to Forbes, statistics show that 62% of employees will consider the availability of a retirement plan when deciding whether to accept or remain in a job, and some studies have found that when deciding whether to change jobs, 82% of employees say that their benefits — specifically their retirement benefits — are important. (https://bit.ly/3rftUqR)
On top of the positive impact retiree benefits can have on your talent pool, Group Medicare plans can also have a positive financial impact for plan sponsors. Some Group Medicare plans are fully insured, which means that any financial risk is borne by the carrier rather than the plan sponsor, passing on additional financial benefits to plan sponsors.
The take away
In conclusion, Group Medicare plans can be beneficial to both employers and their retirees. Employer plan sponsors can reduce costs by selecting a Group Medicare plan for their retirees. Fully insured plans can help to reduce the cost to plan sponsors, while the extensive coverage and additional benefits offered to retirees give them access to a wide array of tools and services to effectively manage their health and wellness. Group Medicare plans can also provide more peace of mind.
Humana looks forward to working with Group Health Benefits brokers to assist them to address the needs of their client’s retirees. Humana works hand in hand with Group Benefits Brokers to give them the confidence their employer clients will be able to address retirees with a high quality plan that has been vetted as opposed to searching through the many options for a Medicare plan on their own.
Contact:
888-666-0710 (TTY: 711)
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