Jump to content

Guest jsbenn1988

Recommended Posts

Guest jsbenn1988

I was released from a large company on 8/31/13 and offered COBRA coverage accordingly. None of the notifications or the plan summary description make mention of a need for my 67 year old husband to become entitled to (sign up for) Medicare part B to receive identical coverage. In our coverage the day before I was released, he did not have Medicare B.

At the end of December we learned my husband would need surgery. The first week of January, I called the provider to verify our coverage & maximum out of pocket for him. The reply I received that day was in line with what I understood our existing coverage to be. I called again a few weeks later to see why claims weren't being paid as usual. I disclosed that we were COBRA and that he had Medicare part A, but not part B. I was told that they would resubmit for payment, it would take 30 days. I called several times to monitor status on this. Until 3/11, the answers were that it was in process, it would be 30 days. After 30 days was up, the answer was that review was complete and that it would take an additional 30 days for full correction.

Last Tuesday, on 3/11/14, I was informed that because he is "eligible" for Medicare, they will only be paying 20% rather than filling the gap for part B. He is indeed eligible for part B, but he is not entitled to part B. Since he was under my insurance plan 2 years ago when he became eligible, he declined, so is not entitled. Nevertheless, his coverage has changed from the day before I was terminated to a 20% limit. There is no indication of this possibility in any of the COBRA documentation or summery plan description.

I have been searching for information on COBRA & Medicare. My understanding of the law is that it pertains to entitlement, not eligibility. If he had signed up for Part B, he would be entitled. Since he didn't, he is only eligible. I've talked with both the company (self insured) and the carrier about this. They are both sticking to the "eligibility" status as reason for declining coverage now although there has been a variety of answers to this from both of them.

The first surgery was double hernia on 1/10/14 after my initial call to the carrier. During pre-op workup, we discovered he had a large dissected aneurysm and leaking valve. He had open heart surgery on 2/10/14. We are now being informed we are responsible for a gap mounting into tens of thousands of dollars.

I think they are confused about entitlement vs eligibility. The last company rep I talked to said there have been other cases like this.

My questions are:

Is there a COBRA exclusion that allows them to require Medicare B entitlement or a change in coverage like this? If not, what recourse do I have?

If there is a COBRA exclusion that makes this legal, do I have recourse with the carrier who gave me incorrect information for 2 months while we incurred extensive medical bills?

Thank you,

Sue B

Link to comment
Share on other sites

I have seen this type of provision in various health plans. I think it technically is not a COBRA entitlement vs. eligibility issue or an exclusion under COBRA. Rather, the terms of the Plan provide that if someone on COBRA is eligible for Medicare, then the Plan will pay benefits as if the person has Medicare, regardless of whether or not they actually are enrolled. It may be discussed in another part of the SPD.

Link to comment
Share on other sites

Guest jsbenn1988

Can you give me an idea of where this discussion might be hidden? Is this a legal evasion of COBRA requirements for identical coverage?

Link to comment
Share on other sites

Guest jsbenn1988

I have searched the SPD document and every reference to Medicare in the document that applies uses "entitlement" not "eligibility". Would there be other terms to describe this?

Link to comment
Share on other sites

You should be looking at the Plan Document not the SPD.

I think that in this case, since your husband is 67, entitlement and eligibility for Medicare would be the same thing. "Enrolled" might be relevant.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

Link to comment
Share on other sites

Guest jsbenn1988

The SPD, Summary Plan Document, is the only document available on the benefit website pertaining to this plan.

My understanding is that in terms of COBRA, enrollment in either Part A or Part B is translated to entitlement for both, however, since he did not enroll in part A, but was automatically put into it as part of the working aged rules, plans are prohibited from treating him differently. Also, this happened in Sept, 2011, before the qualifying event - my severance from the company in August, 2013.

I believe that eligibility means he could take it if he wanted it. Entitlement means he acted on eligibility, enrolled and has paid premiums. There is a lot of confusion on these terms alone. Many people think they are interchangeable. He is eligible for Part B, he is not entitled to it because he hasn't enrolled. If he did so now, after the severance, he could be removed from COBRA if that were company policy. Obviously it's not.

Link to comment
Share on other sites

jsbenn, you are correct about the meaning of these terms and how much confusion they have and will continue to cause.

I think KED (in post #3) is on the right track. As you probably know, COBRA does not provide coverage. It provides for continuation of coverage under the health plan. So, it's the terms of the health plan that govern.

Although one would assume that continuation coverage means that the coverage you had before COBRA continues while you are on COBRA, apparently (from KED's post) the health plan can have different terms of coverage when you go on COBRA. A good SPD would inform participants that coverage may change (like the 20% limit) when they go on COBRA, but I think such a warning is not required in the SPD.

If you file (in writing) an appeal of the denial of your claim, they will have to provide written documentation from the plan documents why the claim was denied. Procedures for filing an appeal should be in the SPD. It may not turn out well, but at least you'll know why.

Link to comment
Share on other sites

If you have good records of your conversations prior to surgery indicating that you relied on their representations that your husband was covered that might go along way in your favor should wind up hiring an attorney to represent you in this down the road.

Link to comment
Share on other sites

Employees 65+ who are still working can delay enrolling in Part B without a penalty, but this is not the case if the coverage is continued under COBRA. Your husband needed to sign-up for Part B when first eligible (maybe part d too, not sure) to avoid penalties. Penalties are 10% premium penalty per year. This has been standard since inception of COBRA 20+ years ago.

Suggest you follow-up with Medicare staff/office and find out more about your options. Good luck.

Link to comment
Share on other sites

1) Pay careful attention to GMK's comment about filing an appeal and specifically to follow the plan's appeal process. Failure to follow it can limit further recourse.

2) From CMS.gov: "A qualified beneficiary first becomes entitled to Medicare benefits upon the effective date of enrollment in either Part A or Part B, whichever occurs earlier. (26 CFR Sec. 54.4980B-7, Q&A-3.)"

3) Also from CMS.gov: "Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is a Title X provision that provides continuation of GHP [Group Health Plan] coverage if elected. For aged or disabled Medicare beneficiaries, COBRA continuation coverage is secondary to Medicare because the coverage is by virtue of COBRA law rather than by virtue of current employment status. For an ESRD related Medicare beneficiary, COBRA continuation coverage if elected, is primary to Medicare during the 30-month ESRD coordination period. See 42 CFR 411.161(a)(3) and 411.162(a)(3)."

Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra

Link to comment
Share on other sites

Guest jsbenn1988

masteff,

My husband was auto enrolled into Part A when he turned 65 as part of the working aged rule. According to MSP rules, group health plans in my company's category are not permitted to treat an employee or employee's spouse any differently under the plan because either of them has become entitled to Medicare because of attaining age 65 (the "working aged" rules).

GMK,

This company is unlikely to hide this kind of thing behind closed doors and not disclose it in the SPD. They really have gone above and beyond in terms of severance package including the 6 months COBRA at employee rates, 6 months of placement services, and months of severance pay. I have a hunch the crux of the problem is that they are contracting with other companies to execute their plan and it is being mishandled. I talked with a "benefits center" rep yesterday who said "Entitlement, eligibility -- the words don't matter. We both know where this is going." Uh, no. The words matter. This person also admitted that she has had other cases like this. But the one before her believed it was just a matter of coordination of benefits, missing the 20% cap issue.

I've now reached out to the corporate benefits advocacy group. I have the protocol for appeal and am beginning to draft that document.

Lou S.

The carrier is voluntarily sending all the conversations to their review board for bad information including conversations of a supervisor saying "they never should have said that" out loud. They have also verbally said that the 20% change up should be documented where employees can find it. Part of me wonders if the contract information isn't entered incorrectly in their system.

Link to comment
Share on other sites

Your husband needed to sign-up for Part B when first eligible (maybe part d too, not sure) to avoid penalties.

For reference, you are correct, COBRA does not extend the penalty deadline for signing up for Part B. It does, however, extend the deadline for signing up for Part D ... not that that matters here.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...