Employees who are eligible for Medicare can participate in an ICHRA and use their employer allowance to cover the costs of Medicare premiums. To qualify for ICHRA allowances, employees must have primary Medicare coverage– meaning, they must be enrolled in Medicare Parts A and B (Original Medicare) or Part C (Medicare Advantage).

Once an employee is enrolled in primary Medicare coverage (Parts A+B or Part C), they can use ICHRA allowances to cover:

If an employee is over 65 years old and qualifies for Medicare while their spouse is under 65 years of age, or vice versa, the employee can use the ICHRA allowance to cover both the Medicare plan and the spouse’s Individual Family Plan (IFP), assuming that the allowance suffices for both. This is also true in the reverse case, where the spouse qualifies for Medicare while the employee is under 65 years old and will get an IFP. In this case, an employee will have two separate plans, with separate records and separate premium payment processes.

Zorro will help facilitate the full enrollment, payment, and payroll processes for Medicare-eligible employees.

Employees over 65 years old whose employer is moving away from a group plan will not be able to have Medicare as secondary coverage to employer coverage. With ICHRA, an employee cannot use employer ICHRA allowances to purchase an IFP (and pay independently for Medicare). If employees wish to participate in the employer plan, their ICHRA allowance should be used to pay for Medicare as the primary insurer.