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Medicare Secondary Trap for Unwary


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Sharing a sad story involving a local church in case it might help your clients avoid the "trap".

Its generally understood that the Medicare Secondary Payer (MSP)rules don't apply to small employers under 20 employees.

Small church (5 employees) thought they were exempt from MSP and reimbursed age 65 employee for premiums for Medicare Part B and D and Medicare Supplement.

Turns out their group health plan is a self-funded multiple-employer plan sponsored by the national church and they've now learned that since the plan covers at least 1 employer who has over 20 employees they are not considered a small employer exempt from MSP.

Lesson learned: small employers participating in a multiple-employer health plan are very likely subject to MSP.

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