What is an Employees' EGI?

Generally, most people have one health insurance plan to cover their needs. But let's face it: With the rising cost of healthcare, single-policy coverage isn't always enough. Some people have additional contingencies, such as health savings plans (HSAs) or employer-sponsored flexible spending accounts (FSAs). But one of the best scenarios is to have both Medicare and insurance from a group health plan. Maximize your savings with FSA deductions! Click here to visit this website and learn how ( Flexible Spending Account) FSA deductions can benefit your finances.

If that's the case, employers must provide relevant information to insurance companies and the IRS. In addition to detailing FSA deductions from payroll, employers must submit forms covering employees' EGI.

EGI stands for Employer Group Information.

Why is an Employees' EGI Necessary?

The Employees' EGI form is important for many reasons. The biggest is that it's a mandate under federal law. The law states that it's the employer's responsibility to inform insurance companies about employees. They must detail how many people the company employs.

But why?

It all comes down to dual-coverage situations. This document helps determine payment priority between Medicare and another insurer.

When you qualify for Medicare, you have two insurers who can cover healthcare costs. Two separate entities could pay the bill. However, how do you determine which insurance company is the primary payer? Is it Medicare or a group health plan?

The Employees' EGI form is what determines who the primary payer is. It's not the size of the group health plan that matters. Instead, it's the number of people employed by the company.

Failing to provide this document can lead to many issues. The biggest is the employer's group health plan automatically becomes the primary payer. That can be detrimental for employers because it increases healthcare costs. While that's sometimes unavoidable, having Medicare as the primary payer is always preferred. That coverage exists for those who qualify, so having Medicare cover the bill first is beneficial. In that scenario, the group health plan would be the secondary payer and cover expenses that Medicare won't.

If you're an employer, remember to submit the Employees' EGI form alongside documentation about FSA deductions every year.

Read a similar blog about savings investments here at this page.