I would appreciate any comments that anyone might have regarding the following:
If an employer has or had at least 20 employees on each of 20 or more calendar weeks in the preceding or current calendar year (42 CFR 411.170(a)(2)(i)), the a group health plan of that employer must offer the same health coverage to active employees that are 65 or older and eligible for Medicare that is offered to other active employees. 42 CFR 411.102(b). Such an employer's group health plan must provide the "same benefits under the same conditions as it provides to employees and spouses under age 65."
42 CFR 411.172© provides that an employee or spouse that is age 65 or older "may refuse the health plan offered by the employer. If the employee or spouse refuses the plan (1) Medicare is primary payer for that individual; and (2) the plan may not offer that individual coverage complementary to Medicare."
Not only must such an employer not offer 'individual coverage complementary to Medicare', no one may offer "financial or other benefits as incentives" to a Medicare eligible individual to forego coverage in that employer's health plan. 42 CFR 411.103(a).
An HRA may be designed under IRC sec 105(h) to permit the employee to choose to have his or her HRA benefits applied either to pay health insurance premiums or reimburse out-of-pocket medical expenses. If the HRA permits benefits be applied to payment of supplemental health insurance premiums as well as major medical insurance premiums, would permitting employees such a choice be 'offering' individual coverage complementary to Medicare for those age 65 or older given such an employee could have his or her HRA benefits applied to premiums for Medicare supplement insurance rather than the employer's major medical coverage?
If an IRC sec 125 cafeteria plan gives the employee the option of payment of premiums for Medicare supplement insurance rather than taking employer-paid coverage in the group health plan, is that offering individual coverage complementary to Medicare?
Would the ability of the employee to not have his or her HRA benefits applied to the payment of premiums for major medical insurance (but applied to any other health insurance premium or to accumulate and be available for later reimbursement of out-of-pocket medical expenses) be a 'financial or other benefit' incenting an employee over age 65 to refuse coverage under the employer's major medical policy?
If an IRC sec 125 cafeteria plan gives the employee the option of cash rather than taking employer-paid coverage in the group health plan, is that a 'financial or other benefit' incenting an employee over age 65 to refuse coverage under the employer's major medical policy?
Restricting from such options just those who are age 65 or older would likely violate the Age Discrimination in Employment Act (ADEA).
It would seem that since the purpose of the Medicare coordination regs are to prevent employers from inducing those employees age 65 or older into refusing the employer-provided coverage and thus making Medicare primary coverage, rules that applied to all employees regardless of age and regardless of Medicare eligibility would be alright. Extra pay instead group health plan coverage under a cafeteria, or the ability to have HRA benefits applied to AFLAC insurance rather than major medical, ought be no problem for employees of all ages, even those age 65 or older.
However, since Medicare supplement insurance is only for those age 65 or older and those for whom Medicare is primary (i.e., those that don't have major medical through the employer's group health plan), it seems that allowing employees to pay the premiums for Medicare supplement insurance as a cafeteria or HRA option would be problematic.
Any info or thoughts on this would be greatly appreciated.
I would appreciate any comments that anyone might have regarding the following: If an employer has or had at least 20 employees on each of 20 or more calendar weeks in the preceding or current calendar year (42 CFR 411.170(a)(2)(i)), the a group health plan of that employer must offer the same health coverage to active employees that are 65 or older and eligible for Medicare that is offered to other active employees. 42 CFR 411.102(b). Such an employer's group health plan must provide the "same benefits under the same conditions as it provides to employees and spouses under age 65." 42 CFR 411.172© provides that an employee or spouse that is age 65 or older "may refuse the health plan offered by the employer. If the employee or spouse refuses the plan (1) Medicare is primary payer for that individual; and (2) the plan may not offer that individual coverage complementary to Medicare." Not only must such an employer not offer 'individual coverage complementary to Medicare', no one may offer "financial or other benefits as incentives" to a Medicare eligible individual to forego coverage in that employer's health plan. 42 CFR 411.103(a). An HRA may be designed under IRC sec 105(h) to permit the employee to choose to have his or her HRA benefits applied either to pay health insurance premiums or reimburse out-of-pocket medical expenses. If the HRA permits benefits be applied to payment of supplemental health insurance premiums as well as major medical insurance premiums, would permitting employees such a choice be 'offering' individual coverage complementary to Medicare for those age 65 or older given such an employee could have his or her HRA benefits applied to premiums for Medicare supplement insurance rather than the employer's major medical coverage? If an IRC sec 125 cafeteria plan gives the employee the option of payment of premiums for Medicare supplement insurance rather than taking employer-paid coverage in the group health plan, is that offering individual coverage complementary to Medicare? Would the ability of the employee to not have his or her HRA benefits applied to the payment of premiums for major medical insurance (but applied to any other health insurance premium or to accumulate and be available for later reimbursement of out-of-pocket medical expenses) be a 'financial or other benefit' incenting an employee over age 65 to refuse coverage under the employer's major medical policy? If an IRC sec 125 cafeteria plan gives the employee the option of cash rather than taking employer-paid coverage in the group health plan, is that a 'financial or other benefit' incenting an employee over age 65 to refuse coverage under the employer's major medical policy? Restricting from such options just those who are age 65 or older would likely violate the Age Discrimination in Employment Act (ADEA). It would seem that since the purpose of the Medicare coordination regs are to prevent employers from inducing those employees age 65 or older into refusing the employer-provided coverage and thus making Medicare primary coverage, rules that applied to all employees regardless of age and regardless of Medicare eligibility would be alright. Extra pay instead group health plan coverage under a cafeteria, or the ability to have HRA benefits applied to AFLAC insurance rather than major medical, ought be no problem for employees of all ages, even those age 65 or older. However, since Medicare supplement insurance is only for those age 65 or older and those for whom Medicare is primary (i.e., those that don't have major medical through the employer's group health plan), it seems that allowing employees to pay the premiums for Medicare supplement insurance as a cafeteria or HRA option would be problematic. Any info or thoughts on this would be greatly appreciated.