Q. We have an employee on our insurance and Medicare; however, he informed me that Medicare does not pay on any of their claims. Medicare told this employee that they will not because he is employed. Is that true? If yes, why is it mandatory that he purchase insurance that does not pay on claims?

A. The rules are a bit confusing. In general, if you are still employed, and your employer has 20 or more employees, the group plan pays first. Medicare will pay when only when Medicare coverage exceeds the group coverage, which depending on the plan could be rare.

The reason to sign up for Medicare A&B at 65 is to avoid part B late enrollment penalties. If you don't sign up for Part B when you're first eligible or if you drop Part B and then get it later, you may have to pay a late enrollment penalty for as long as you have Medicare. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn't sign up for it.

Please refer to the attached “who pays..” guide for your reference. Once a person is retired and Medicare pays first, the group plan pays everything else, so the insured basically has no out-of-pocket except for Rx co-pays. It’s as if you are penalized for working past 65.