Medicare and Employers National Association of Health Underwriters June 2009 Medicare Basics Review Medicare is a health insurance program for: People age 65 or older People under age 65 with certain disabilities, People of all ages with end-stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant) Medicare has two basic parts: Part A Hospital Insurance Most people don’t pay a premium for Part A, and Part B Medical Insurance – usually out of the hospital Most people pay a monthly premium for Part B - $96.40 in 2009. (higher income beneficiaries may pay more) The cost of Part B may go up 10% for each full 12-month period that you could have had Part B but didn’t enroll and your Part B coverage as a late enrollee will start on July 1 of the year you enroll. This additional cost is permanent. Medicare Part B and Employer Health Plan Coverage If you or your spouse is working and has group health coverage you are eligible to defer your enrollment in Part B without a penalty. You may enroll in Part B without penalty anytime you are still covered by your employer as an active employee (not retiree or COBRA), or During a special enrollment period in the eight months following the month your employer or union coverage ends. Medicare Part B and Employer Health Plan Coverage IMPORTANT - Once you are no longer covered under your employer’s plan you are strongly advised to sign up for Part B before the end of the eight month special enrollment period. If you don’t, you’ll only be able to enter Part B during a general enrollment period, which means that you may have to go a significant period of time with health insurance coverage only under Part A. Your open enrollment period for Medigap will only begin once your Part B begins, so it is VERY important to enroll during the eight month period. Medicare Part B and Employer Health Plan Coverage In addition, if you wait to enroll, your Part B premiums will go up. Whether you decide to enroll in Part B while you’re still actively at work or wait until your group health plan coverage ends, it is important to remember than your open enrollment period for Medigap coverage begins when you enroll in Part B. Open enrollment is a one time option that allows you to select any Medigap plan available in your area regardless of your health status. Part B and COBRA You should consider enrolling in Part B even if you take COBRA. Because COBRA isn’t considered coverage as an active employee, your eight month Part B special enrollment period begins on the last day of your employment or the month your employer or union coverage ends, not when your COBRA ends. Part B and COBRA You may want to consider whether or not coverage under Medigap or through a Medicare Advantage plan would be better for you than electing COBRA. If you are age 65 or older and do elect COBRA, be aware that your employer plan may require you to sign up for Part B in order to receive full plan benefits. In that case, the best time to sign up for Medicare Part B is before your employment ends or you lose your employer’s coverage. Part B and COBRA If you wait to sign up for part B during the eight months after employment or coverage ends, your employer plan could require you to be responsible for services that Medicare would have paid for if you had signed up earlier. As a reminder, if you don’t sign up for part B during the eight month period after your employment ends or you lose coverage, you will only be eligible to sign up during the general open enrollment and your Part B premiums will go up. COBRA and Medicare If you already have COBRA coverage when you first enroll in Medicare, your COBRA coverage may end. Your employer has the option of canceling your COBRA coverage if your first Medicare enrollment is after the date you elected COBRA coverage, and the majority of employers do. Who Pays First – Large Groups If you are age 65 or older, actively employed, and covered by a group health plan where the employer has 20 or more employees, the group health plan is primary and Medicare is secondary Some people choose not to take Part B in this situation since taking Part B triggers the open enrollment period for Medigap and Medigap is probably not needed at this time. Once your active employment ends, you’ll have a special enrollment opportunity to enroll in Part B. Who Pays First – Large Groups Then Medicare will be primary and you’ll be able to select from among all the Medigap plans available in your area regardless of your health status. Keep in mind that although Medicare Part A is supplementing your group health plan, not taking Part B may mean that some of your expenses that would have been payable through Medicare Part B as the secondary payer may not be payable. Who Pays First – Small Groups If you are age 65 or older and actively employed and covered by a group health plan where the employer has less than 20 employees, Medicare is primary and the group health plan is secondary This may also be the case if your employer is part of a multi-employer plan that has requested an exemption that has been approved by Medicare. Who Pays First – Small Groups You have the option when covered under a group health plan not to take Part B, however, it is often not advisable to do so when covered under a plan with less than 20 employees. Many small employer plans pay secondary benefits for Medicare eligible employees as if they were covered by both Part A and Part B, regardless of whether or not they are actually enrolled in Part B. If you’re covered by a small employer plan and don’t enroll in Part B, you may find that you’ll still have to pay a large portion of your medical expenses out of your own pocket. Who Pays First – Small Groups Remember that when you enroll in Part B, you trigger your one time open enrollment period for Medigap It is especially important for Medicare beneficiaries with health conditions to purchase Medigap coverage during their open enrollment period, even if that means buying a policy while still covered by an employer plan Even beneficiaries in good health may want to protect their right to purchase the policy they want by purchasing during the open enrollment period. Who Pays First - Retirees If you are covered by a group health plan as a retiree and are age 65 or older, Medicare is primary regardless of the plan size. Who Pays First - Disability If you are disabled and covered by a large group health plan and the employer has more than 100 employees, the health plan is primary and Medicare is secondary. If you are disabled and covered by a large group health plan with less than 100 employees Medicare is primary and the group health plan is secondary. Who Pays First - Disability If your employer has less than 100 employees but is part of a multi- employer plan that has any employer with 100 or more employees, the group health plan is primary and Medicare is secondary. If you are disabled and covered by Medicare and COBRA, Medicare is primary and COBRA is secondary. End Stage Renal Disease End State Renal Disease is a medical condition in which a persons kidneys cease functioning on a permanent basis leading to the need for long-term dialysis or a kidney transplant. Beneficiaries may become entitled to Medicare based on ESRD. ESRD Medicare Benefits Benefits on the basis of ESRD are for all covered services not only those related to kidney failure. Medicare is secondary to group health plans for individuals entitled to Medicare based on ESRD for 30 months regardless of the number of employees and regardless of whether the employee is an active employee or covered by COBRA, even if the employer plan says that it is secondary to Medicare. ESRD Medicare Benefits The health plan may not provide different benefits to those who have ESRD, and they may not terminate coverage, impose benefit limitations, or charge higher premiums on the basis of ESRD. When the beneficiary first enrolls in Medicare based on ESRD, Medicare coverage usually begins on the 4th month of dialysis when the beneficiary participates in a dialysis treatment in a dialysis facility. ESRD Medicare Benefits Medicare coverage can start as early as the first month of dialysis if the beneficiary takes part in a home dialysis training program in a Medicare-approved training facility to learn how to do self-dialysis treatment at home, the beneficiary begins home dialysis training before the third month of dialysis, and the beneficiary expects to finish home dialysis training and gives self-dialysis treatments. ESRD Medicare Benefits Medicare coverage can start the month the beneficiary is admitted to a Medicare-approved hospital for a kidney transplant, or for health care services that are needed before the transplant if the transplant takes place in the same month or within the two following months. Medicare coverage can start two months before the month of the transplant if the transplant is delayed more than two months after the beneficiary is admitted to the hospital for that transplant or for health care services that are needed before the transplant. When Medicare Coverage Ends If the beneficiary only has Medicare because of ESRD, coverage will end 12 months after the month dialysis treatments are stopped, or 3 months after a successful kidney transplant. Coverage will not end if the beneficiary has to start dialysis again or receives a kidney transplant within 12 months after stopping dialysis or if the beneficiary continues to receive dialysis or receives another kidney transplant within 36 months after a transplant. Who Pays First – Auto Insurance and Workers Compensation No-fault or liability coverage is always the primary payer over Medicare Workers Compensation usually covers all expenses, however, Medicare may make a conditional payment while the beneficiary’s claim is pending. Who Pays First – VA and TRICARE Veteran with Veterans’ benefits – Medicare pays first for Medicare-covered services, but VA pays for VA authorized services (Medicare and VA can’t pay for the same service) TRICARE – Medicare pays for Medicare- covered services but TRICARE pays for services from a military hospital or any other federal provider. TRICARE may also pay secondary to Medicare. Medicare Secondary Payer Medicare Secondary Payer (MSP) is the term used by Medicare when Medicare is not responsible for paying first. This process is very similar to the COB rules used by private industry for assigning responsibility for first and second payment. Medicare secondary payer laws take precedence over State law and private contracts. Responsibilities of Beneficiaries Respond to questions from Medicare about other coverage in a timely manner. Make sure that your Medicare Contractor is aware of any changes in your coverage in addition to Medicare through yours or your spouse’s employment. You can call the Medicare COB contractor at 1-800- 999-1118. Make sure your doctors and other medical providers also know about these changes so they can bill for your medical services appropriately. Responsibilities of Employers Provide CMS with information regarding the health coverage of Medicare-eligible workers and spouses when requested. Make sure your health plan provides for primary payment for these individuals. Consider not only employees and spouses age 65 and over but also those with permanent kidney failure and disabled Medicare beneficiaries. Complete and submit Data Match reports timely on identified employees. Data Match The law requires the IRS, Social Security Administration and CMS to share information that each agency has about whether Medicare beneficiaries or their spouses are working. The process is called the IRS/SSA/CMS Data Match. The purpose is to identify situations where another payer may be primary to Medicare. Data Match Employers are required to complete a questionnaire that requests group health plan information on identified workers who are either entitled to Medicare or married to a Medicare beneficiary. The Data Match Project has saved the Medicare Trust Funds more than 3.5 billion dollars to date. Employer Reporting Requirements The employer must provide information about their workers whenever CMS identifies those individuals to the employer. Generally, the questionnaire asks if each named individual worked during a specific time period and if so whether he or she had employer sponsored group health plan coverage. Employers must respond within 30 days of the initial inquiry, unless an extension has been requested and approved. Employer Reporting Requirements The COB Contractor has responsibility for virtually all initial MSP development activities and in addition handles MSP related inquiries for general information. MSP claims are identified in a number of ways. When a claim is submitted with an EOB from an insurer rather than Medicare, a questionnaire is sent to the beneficiary to collect information on the existence of other insurance that may be primary to Medicare. Employer Reporting Requirements MSP information is also collected through self- reports which are basically reports from any source that contacts the COB contractor with information on other coverage. When a diagnosis appears on a claim that indicates a traumatic accident, injury, or illness, a questionnaire is sent to the beneficiary, provider, attorney, or insurer to collect more information. A process identified as CFR 411.25 is used to confirm MSP information received from a third party payer. Employer Reporting Requirements An instruction booklet is available to assist employers with completion of the questionnaire. As an alternative to the Data Match, employers may want to consider an employer voluntary data sharing agreement with CMS to exchange group health plan and Medicare entitlement data. Employer Voluntary Data Sharing Agreements Many large employers have entered into Voluntary Data Sharing Agreements with CMS to share coverage information. There are substantial benefits from entering into this type of agreement. One benefit is that it allows the employer to avoid completion of Data Match questionnaires, eliminate repayment of claims and associated penalties. Employer Voluntary Data Sharing Agreements With this type of agreement, the employer agrees to electronically share on a quarterly basis health plan entitlement information for employees and their spouses. In exchange, CMS agrees to provide the employer with Medicare entitlement information for identified individuals. This enables claims to be paid by the correct payer the first time. Employer Voluntary Data Sharing Agreements A VDSA is a cost effective way to satisfy your requirement to complete annual Data Match questionnaires. Most employers handle Data Match manually. The automated process will provide administrative savings and more effective coordination of benefits. VDSAs identify not only when Medicare is the secondary payer, but also when Medicare is the primary payer to your insurer. Beneficiary Automated Status and Inquiry System (BASIS) The Beneficiary Automated Status and Inquiry system (BASIS) is available to participants of the Voluntary Data Sharing Agreement (VDSA) program. It allows online Medicare entitlement queries to determine if an individual is a Medicare beneficiary. Participants may request Medicare information for up to 100 enrollees per month. Questions?