Taft Hartley Plan with Benefits Bank .. Medicare secondary

[Guest jlcowden]

We have a relatively new, to us, Taft Hartley client who maintains a benefits bank which often produces large $ bank amounts that are often not used up by age 65 .... Medicare has indicated that 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??

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jlcowden

[KJohnson]

I know that many multis have provisions that the hours you earn one quarter entitles you to benefits in the subsequent quarter. I think these multis have accepted HCFA's position that if a Medicare eligible active earns eligiblity in one quarter, retires, and that coverage then carries on for the following quarter that the multi plan remains primary and Medicare secondary until the end of the quarter of coverage "earned" while the employee was active.

I guess the same thing could apply to an hours bank.

Thus, it is a quesiton of when the elibility was earned rather than when the coverage is provided. Of course, what happens with multis that only provide retiree coverage for individuals with, for example, 20 year of service. As far as I know, HCFA has not stated that the Plan remains primary for this type of retiree coverage.

[Guest jlcowden]

In this situation the bank can accunulates substantial balances eg; in excess of $20,000 and HICFA has in an opinion letter dated April 11, 2000, indicated that as long as an account balance remained; the retiree was considered an active employee because the bank accumulated as a result of active employment.

Obviously the intent of thr bank was to accumulate $ for periods of un/under employment and to permit the retiree to cover the cost of suuplemental coverage .... the ruling is resulting in retired members reaching into there own pocket once the bank is drained and is costing the fund signifigant $ as well.

We have some ideas to resolve but I am hoping to find someone who has faced similar situations.

Any advice or shared experiences will be appreciated.