- Retirees
- Understanding your retiree benefits
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UC coverage and Medicare
UC coverage and Medicare
Medicare is the federal health insurance program for people 65 and over, and it plays an important role — in coordination with your UC retiree health benefits — in covering your health care costs as you age.
The transition to Medicare can be complicated — the UC Retirement Administration Service Center (RASC) is here to help. Retirees and prospective retirees can check out weekly office hours and monthly webinars on Medicare to ask questions and get answers.
Enrolling in Medicare: When you are eligible and when you are required to enroll
If you’re like most people, when you turn 65 you will become eligible to enroll in Medicare. If you’re receiving Social Security, Railroad Retirement, or Civil Service income benefits, enrollment in Part A and B is automatic.
Whether you are required to enroll in Medicare when you turn 65 depends on whether you’re an active UC employee, preparing to retire, or retired. To avoid Medicare premium penalties (which can be substantial), make sure you understand the rules that apply to you and your family members.
When you’re ready, What to do if you’re enrolling in Medicare walks you through the process.
If you are covered by UC medical insurance as an employee, you are usually not required to enroll in Medicare when you become eligible.
Here are a few important considerations:
- There’s typically no cost to enroll in Medicare Part A coverage, and it could potentially pay some hospitalization costs not covered by your UC medical plan. Your UC employee medical plan will continue to be your primary coverage (for most), even if you enroll in Medicare.
- Medicare has different rules for spouses and domestic partners. Spouses covered by UC employees can delay enrollment in Medicare Part A and B. However, domestic partners (same-gender and opposite-gender) covered by UC employees need to enroll in Part B at age 65 to avoid potential Medicare penalties and to comply with UC’s requirements. Your domestic partner should contact Social Security three (3) months before turning age 65 to inquire about Part B enrollment options and penalties for deferring enrollment.
- If you are already receiving a Social Security income benefit, you’ll be automatically enrolled in Medicare Parts A and B; you’ll need to contact Social Security if you do not want to be enrolled.
- The IRS does not allow Medicare enrollees to have a Health Savings Account. If you’re in the UC Health Savings Plan, you and your spouse must delay enrollment in all parts of Medicare to remain eligible for the UC Health Savings Plan and the Health Savings Account (HSA).
If you are turning 65 at the time of your retirement from UC and you are eligible for premium-free Part A, you and your spouse must enroll in both Part A (if not already enrolled) and Part B.
See What to do if you’re enrolling in Medicare for a step-by-step guide. The process takes time, so it’s a good idea to plan ahead.
If you are required to pay a premium for Part A as a UC retiree, you are not required to enroll in Medicare Parts A and B. However, UC does require that you send a copy of your denial letter from Social Security to the RASC to keep your current UC coverage.
How Medicare works
Avoid surprises by learning more about the ins and outs of Medicare.
Medicare has four parts: A, B, C and D. You must pay the federal government a premium for Medicare Part B, and possibly other parts of Medicare; the amount depends on your income. These premiums are separate from the premiums you pay to UC. See “Your costs” below and medicare.gov/basics/costs for more information.
Part A covers hospital care, skilled nursing and hospice care and home health services. Most people don’t pay a premium for Part A because you or your spouse or ex-spouse have worked full-time for 10 years and paid for it through Medicare taxes.
Part B covers outpatient medical services. Everyone enrolled in Medicare must pay a monthly premium to the federal government for Part B. For those with higher incomes, this premium is indexed to your modified adjusted gross income.
Part C is another term for “Medicare Advantage,” a type of Medicare-approved plan offered by private insurance companies that combines Medicare Parts A, B and D benefits. If you enroll in a Medicare Advantage plan, Medicare pays your insurance company a set amount and the company approves and pays for your care.
Part D covers prescription drugs. The cost for Medicare Part D is folded into UC-sponsored Medicare plans, except for UC Medicare PPO without Rx. If you are paying a higher Part B premium due to your income (see information on Part B), you will also pay a Part D surcharge to the federal government.
UC sponsors five Medicare plans for eligible retirees who live in California, and they work in different ways to increase your coverage over the standard 80% usually covered by Medicare.
Kaiser Permanente Senior Advantage and UC Medicare Choice are Medicare Advantage (Part C) plans (see The components of Medicare above). The insurance company that offers the Medicare Advantage plan receives a set amount from Medicare to pay for and manage your care; you pay a set copay for some services. You’ll work directly with your physician and the plan if you have questions about whether a certain service or medication will be covered.
UC may refund a portion of the Part B premium you pay to Medicare if UC’s contribution to your retiree medical benefits is more than the total cost of your premium. You’ll see the exact amount on your retiree benefit (pension) statement under “Medicare Part B Reimbursement.”
UC High Option Supplement to Medicare, UC Medicare PPO and UC Medicare PPO without Prescription Drugs are Medicare Supplement plans; your care is governed by Medicare’s rules. When you receive services, your provider submits claims to Medicare first, and then your claims are forwarded to your plan to cover even more of your costs.
If you are a retiree and you have some family members with Medicare coverage and others not currently eligible for Medicare, you’re considered a split-Medicare family. Your family is not eligible for the UC Health Savings Plan if you have family members with Medicare coverage.
Most UC non-Medicare medical plans have a Medicare version of the plan; for example, Kaiser Senior Advantage is the Medicare version of Kaiser Permanente. Other UC non-Medicare plans have “partner” plans; for example, UC Medicare PPO is the partner to UC Care and CORE.
With both types of plans, you enroll in the non-Medicare version of the plan and your Medicare-enrolled family members are automatically placed in the partner Medicare plan. You may not see the Medicare plan name when you enroll in the non-Medicare plan.
| Non-Medicare family members | Medicare-enrolled family members |
|---|---|
| CORE | UC Medicare PPO |
| UC Blue & Gold HMO | UC Medicare Choice |
| Kaiser Permanente | Kaiser Permanente Senior Advantage |
| UC Care PPO | UC Medicare PPO |
View the monthly premiums for split-Medicare families.
If you enroll a family member in a new Medicare plan, you will need to complete an additional form:
- Kaiser Senior Advantage — Complete the Medicare Advantage Enrollment/Election form for Kaiser (UBEN 127 PDF) and mail to the plan and the UC Retirement Administration Service Center.
- UC Medicare Choice — Complete the enrollment form for UC Medicare Choice (UBEN 121 PDF) and mail to the UC Retirement Administration Service Center.
- UC Medicare PPO — Fill out the Medicare Prescription Drug Enrollment form for UC Medicare PPO (UBEN 123PDF) and send it to the UC Retirement Administration Service Center.
Medicare Part A (coverage for hospitalization and facilities) is usually premium-free, but there is a standard monthly premium for Part B (doctor and outpatient services) with additional costs for some people depending on income. This premium is usually deducted from your Social Security benefit, or you are billed quarterly by Social Security. See the Medicare Fact Sheet PDF and/or Medicare costs on Medicare.gov for standard rates.
If you are subject to extra Medicare Part B costs due to your income, you will also be required to pay a premium for Part D coverage. Check with Social Security to see if you are required to pay a higher Part B and Part D premium. Most of the UC-sponsored medical plans coordinate Medicare Part D (prescription drug) coverage with the plan’s coverage. This means that, unless you’re enrolled in UC Medicare PPO without Prescription Drugs, you do not need separate Part D coverage.
The premiums you owe to Social Security for Medicare coverage are separate from your premium for UC medical coverage. Currently, UC shares the monthly cost of medical and dental coverage with retirees, up to a UC maximum that varies each year depending on overall costs. Under “graduated eligibility,” retirees may be eligible to receive from 5% to 100% of UC’s maximum contribution to retiree medical plan premium costs.