Multiemployer Plan with a Benefits Bank

[Guest jlcowden]

We have a relatively new Taft Hartley client who maintains a benefits bank which often produces large $ bank amounts that are not used up by age 65 .... Medicare has indicated tgat the plan not medicare is primary until the bank is used up ... this makes NOOOOOOOO sense to me ... does anyone have experience with this type of medicare ruling??

[mbozek]

I am not an expert but I thought that medicare is the secondary health carrier for those employees over 65 who are covered by employer health insurance and will only pay for some charges not paid by employer health insurance. The law requires that employers with 20 or more employees must cover employees 65 under the same conditions as younger employees. Medicare will not pay health expenses for employees over 65 until the benefits in the bank are used up.

[GBurns]

What else could you do with the money in the benefits bank?

How come the bank builds up other than a minimal surplus?

[Guest jlcowden]

Under the HICFA interpretation in question, the bank will be prematurely drained if the plan; not medicare is primary.

Instead of the retired member paying for supplemental premium they must spend their bank $ on Basic coverage and only when it is drained do they convert to medicare primary ...... and then the retired member has no bank $ to cover supplemental premiums.

The build up has occurred because workers have enjoyed ten plus years of nearly fuu year work ... in the ancient past they were off 2 to 3 years due to weather or lack of work.

[Guest jlcowden]

In event I was not clear these are retired members who are no longer working ... the benefit $ were accumulated while they were actively at work.