Dear Gina: We have an employee who just turned 65 and has been enrolled in our group medical plan. Can we pay her Medicare premiums if she opts out of our group medical plan?
A while back I wrote a detailed article around this very topic – with a focus on how you could possibly pay for Medicare premiums with an ICHRA. However, in this case, if your Medicare-aged employee still works a full-time schedule and is eligible for your group medical plan, the answer is no. There is no vehicle for you (the employer) to legitimately reimburse Medicare premiums through an ICHRA or any other tax-favored plan. Here’s the way it’s written in the Employee Benefit Institute of America (EBIA) manual: “If an employer offers a traditional group medical plan, they cannot offer an ICHRA to a class of employee that is eligible for that traditional group medical plan.” If that same Medicare-aged employee dropped down to part-time hours, then they are not eligible for that group medical plan and become a unique class of employee you can reimburse Medicare Parts A and B or Part C and Medicare supplemental insurance.