Opt-Out Payment

[Chaz]

An employer offers an opt-out payment to employees who opt-out of medical coverage and provide evidence of other coverage. Can the employer make the opt-out payment to an employee who opts out of coverage because he or she is enrolled in Medicaid?

[masteff]

My current understanding is yes but only if it's done under a 125 plan and done for all employees, not just Medicare eligible employees.

http://www.americanbar.org/content/dam/aba...uthcheckdam.pdf

http://www.americanbar.org/content/dam/aba...uthcheckdam.pdf

http://benefitblog.com/2008/using-opt-out-...-for-employers/

[Chaz]

I'm asking about MediCAID, not MediCARE. Do you think the rules are the same?

[masteff]

Oooh, my bad!

After some digging, the best answer I can come up w/ is that it may vary by State, since Medicaid is managed by the States. So, I'm going to go with: call your individual state's program and ask if it's against their rules. I will say that while Medicaid is "payer of last resort", I didn't see anything that addressed employer inducements in the same manner that the Medicare Secondary Payer rules do.

[GBurns]

I do not know the answer, but, I suggest that you do not call the State agency. Although you certainly would not disclose the name of the employee, the Caller ID and other things would discose the name of the Employer. I have seen many state employees spend hours following minor leads in an effort to pin an infraction of any sort on a recipient. The problem is that this employee would/should disclose this 'additional income' but most likely did not think of it as being additonal to their regular wages when they applied for Medicaid. It is also quite possible that as little as an extra $100 per month can have a significant and disproportional effect on the employee's Medicaid.