Amwins Connect - May 2025 Question of the Month

Amwins Connect – May 2025 Question of the Month

Question

Can employers reimburse employees for Medicare premiums?

Answer 

Under certain circumstances, yes, employers can reimburse employees for Medicare premiums. 

Employers with fewer than 20 employees 

• Employers with fewer than 20 employees can reimburse employees for Medicare Part B or D premiums if the employer has standard small group coverage. 

Employers with fewer than 50 employees 

• Employers can use a Qualified Small Employer HRA (QSEHRA) to reimburse employees for Medicare premiums. 
• Not all small employers are eligible for a QSEHRA.

Health Reimbursement Arrangement (HRA) 

• Employers can fund an HRA to reimburse employees for medical premiums and expenses.

Medicare Premium Reimbursement Arrangements 

• Employers can reimburse employees for Medicare premiums through a Medicare Premium Reimbursement Arrangement if the plan meets certain requirements. 
• One requirement would be the plan must only be offered to employees who are eligible for Medicare.
• Another requirement would be the employer must offer the employees the opportunity to enroll in the group health plan. 

Section 105 plan 

• Employers can designate employee funds to apply for health insurance coverage payments through a section 105 plan. 
• Employers cannot pay Medicare premiums directly
• Employers cannot offer reimbursement on a pre-tax basis. 

Note: Because all of the above scenarios represent an employer ‘funded’ plan, a summary plan description or plan document describing the details would be required.

Resources 

• Health Reimbursement Arrangements | CMS 
• Health Reimbursement Arrangements (HRAs): 3 things to know | HealthCare.gov 
• Health Reimbursement Arrangements (HRAs) | Internal Revenue Service 
• Health Reimbursement Arrangements (HRAs) for small employers | HealthCare.gov

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