Is there a restriction on removing those eligible for Medicare from a group health by forming a medigap sub-group with another carrier. We are trying to lower the over-all group premiums. The contributions to those over 65 will not change, but they would be off the group contract and enrolled into a group medigap policy. We understand that some will decide to stay on the group contract. Any ideas or suggestions would be appreciated. Are there any violations in this? Washington DC.

If you are talking about retirees and wish to segregate those who are eligible for Medicare, look out!! A recent federal district court of appeals decision held the company erred in providing different benefits for those who were Medicare eligible and those who were not.

If you are talking about employees who are eligible for Medicare, and if there are at least 20 employees, your plan must be primary and Medicare is secondary. That means you are stuck with the higher costs of the older employee.

Presumably, the court's decision involving retirees would make it difficult to succeed in a law suit if you were to spin off a group of elderly employees and give them benefits which are not as good as those of the younger employees.

Can an employee opt out of group insurance and get Medicare on their own and purchase a Medigap policy on their own.

Thanks.