Mandatory Medicare Enrollment for Active Employees with ESRD - Samples of Plan Language

[jsb]

Does anyone require active employees with ESRD (End-stage Renal Disease) to enroll in Medicare as a condition of continued participation in your active employee health plan? If so, would you be willing to share your plan language? Many thanks.

[Kirk Maldonado]

Inasmuch as requiring that would violate applicable law, I doubt that anybody would admit that on a public forum.

[jsb]

Kirk,

Please provide a cite for your statement that is specific to ESRD.

What is illegal about, as a condition of enrollment in my plan, requiring a participant to enroll in Medicare if the participant is eligible and Medicare will pay in the primary position? You are suggesting that it is illegal to require my retirees to enroll in Medicare Part B (and soon, Part D) if they are eligible in order for them to participate in my retiree medical plan offerings which coordinate with Medicare? In spite of their ill conceived position re: the EEOC and Eerie, I think even AARP would suppor that they should be allowed to require Medicare enrollment for retirees to participate in the AARP plans.

I would agree that I run afoul of some regulations if I attempt to require my non-ESRD active employees to move into Medicare. Medicare will not pay primary for active employee who are eligible because of age, so in any event there really is no value to the employee or the employer to such a requirement. ESRD, however, is a special case, and Medicare will pay primary even for an active employee after a waiting period.

[Kirk Maldonado]

You need to read up on the Medicare as Secondary Payer Rules.

[GBurns]

jsb,

Shouldn't it be Medicaid instead? As I remember ESRD is quite often taken over from Medicare by Medicaid.

You should also consider any secondary payer issues there also.

You might want to consider making the Medicaid option available rather than trying to dictate it. It is quite possible that the Mecicaid ESRD coverage is better than that offered under your employee plan, which should make the employee's choice easier.

***************************

The above post needs some correction.

It turns out that the reason why I was seeing Medicaid was partly because the Medicare program as not fully functional then (pre 2001) in South Florida, and partly because of the prevalence of Medicare HMOs in this area.

The Medicare ESRD program is reportedly fully functional in many areas but still not in all.

Additionally, Medicare HMOs etc can deny coverage if ESRD is already diagnosed. What they then do in Florida is to get you enrolled in the Stae catastrophic program which is aimed at ESRd and administered as part of Medicaid. Drs are also allowed to do this enrollment.

If there is employer provide group health, there is the COB and related issues and Medicare will not trip in as primary payer until 30 months after dialysis statrts etc

http://www.cms.hhs.gov/medicare/cob/esrd/esrd.asp

It seems that the employee can eventually be covered by both Medicare and the EGHP with Medicare as primary abd the EGHP as secondary and also covering anything that Medicare does not cover, as a supplement.

The same applies for the Medicaid coverage although it seems that the waiting period is shorter.

I would suggest that you (or the employee) not only get the Medicare booklet explaining coverage etc but also contact the Medicaid and state catastrophic coverage people. The treating Dr might be a good source for contact information along with any of the large Medicare HMOs (MCOs).

[Kirk Maldonado]

GBurns brought up a point that I would like to emphasize because it is important but I am concerned that people may not grasp the significance of his statement.

Specifically, he stated that the 30 month coordination period commences when the person starts dialysis.

Thus, the person cannot force his or her employer's plan to remain primary for more than 30 months by simply delaying enrolling in Medicare.

The reason I am bringing up this point is because I once worked on a case where the employer's health plan paid primary coverage for a person in this situation for more than a decade because the employee never enrolled in Medicare. The only explanation that I can concoct for the plan's continued payment is that the plan and the employer's advisors apparently were unaware of this rule.

[jeanine]

The 30 month COB only applies if the person enrolls in Medicare. You can not force an active employee to enroll in Medicare to receive benefits under your plan.

42 CFR 411.102(a)--A group health plan of any size (i) may not take into account the ESRD-based Medicare eligibility or entitlement of any individual who is covered or seeks to be covered under the plan; and (ii) may not differentiate in the benefits it provides between individuals with ESRD and other individuals covered under the plan, on the basis of the existence of ESRD, or the need for dialysis, or in any other manner.

[GBurns]

So the important thing is not to force or coerce the employee into Medicare.

However, if Medicare is made an available option, the employee after weighing the coverage etc, might on his own elect to enroll in Medicare and after the waiting period have Medicare as Primary and the employer plan as secondary which together would seem to be much better coverage than the current employer plan alone.

Just make as much material available as possible and even get the employee to talk to a knowledgeable rep from 1 of the Medicare MCOs and someone from Medicare.

[Kirk Maldonado]

Jeanine:

First, I didn't say anything about forcing a person to enroll in Medicare. If you read my posts closely, you will note that I choose the words in my posts very carefully (subject to a few blunders from time to time).

Second, here is the language that directly supports the position that I asserted, which was published in the Federal Register. If you think about it, that is the only logical result. Otherwise, the limit upon the maximum period of time that the plan will be primary is meaningless. Specifically, the plan can be forced to be primary forever simply by the employee failing or refusing to enroll in Medicare.

Kirk

Medicare Secondary Payer Provision For Individuals With ESRD

Section 4203© of OBRA '90 amended section 1862(b)(1)© of the Act to redefine and temporarily to expand from 12 to 18 months the period during which Medicare is secondary payer for persons entitled to Medicare solely on the basis of end--stage renal disease.

We amended §§ 411.60 and 411.62 of the Medicare regulations to incorporate this amendment.

Comment: One commenter suggested that we amend the regulations to make clear that the ESRD secondary payer provision sets only minimum standards for group health plans. The commenter's view of the provision was that it does not prohibit a group health plan from providing primary coverage, for individuals eligible for but not enrolled in Medicare, beyond the period during which the law obligates plans to be the primary payer. Specifically, the commenter suggested that the rule should include a provision that the specific contract language of each group health plan governs its obligation to pay primary benefits beyond the 18--month coordination period for individuals eligible for, but not entitled to, Medicare.

Response: The regulation does not need to be revised, but the commenter's concern does merit a response. The question of whether plans are obligated to pay primary benefits for Medicare eligible individuals with ESRD beyond the period prescribed in the Medicare law is not a Medicare issue because it is not addressed in the Medicare law. The ESRD Medicare secondary payer provision requires plans to be the primary payer only during the first 18 months of Medicare Part A eligibility or entitlement.

For individuals entitled to Medicare based on ESRD, Medicare becomes the primary payer after the 18 month coordination period. For those individuals eligible for, but not entitled to, Medicare, plans may decline to be the primary payer after the 18th month of Medicare eligibility. Such action by a plan would be wholly consistent with the ESRD Medicare secondary payer (MSP) provision.

The fact that the 18--month period may represent a period of Medicare eligibility, as distinguished from Medicare entitlement, is significant. The "eligibility" provision prevents an individual, of his own volition, from indefinitely maintaining primary plan coverage simply by deferring enrollment in Medicare. If the 18--month primary payment period were predicated strictly upon Medicare entitlement, plans could be required to provide primary coverage indefinitely for plan enrollees who contracted ESRD, and who declined to enroll in Medicare, because the plan would never reach the point beyond which its primary payer status would be limited to 18 months.

However, since the Congress clearly imposed limited primary payment obligations on plans with regard to individuals eligible for Medicare based solely on ESRD, a plan may direct a plan enrollee who is eligible for Medicare to enroll in Medicare once the 18--month primary payment period has expired. In other words, it would be consistent with the ESRD MSP provision for a plan to inform a Medicare--eligible plan enrollee that he continues to be eligible for plan benefits, but only to the extent that those benefits exceed what would be payable by Medicare if the individual were actually entitled to Medicare.

Clearly, a plan may continue primary coverage for a Medicare--eligible individual beyond the 18--month period prescribed in the Medicare law without violating the ESRD MSP provision. But nothing in the ESRD MSP provision requires a plan to continue primary coverage beyond the 18th month of ESRD--based Part A Medicare eligibility.

HCFA Reconfirmation of Final Rules, 58 F.R. 58504 (11/2/93).

[jeanine]

Kirk,

Sorry, I did not mean to come off so forceful in my response. I didn't want to get too detailed either but we have reviewed the whole concept of "carve-outs" under just about any conceivable proposal. Our general answer from counsel is that these are pretty much impermissable when the enrollee is an active employee. Retirees are another issue. We have analyzed this with ERISA, ADEA, and ADA in mind. If you require the person to enroll in Medicare they have to pay the Medicare premium. The employer can't subsidize the premium. I think this leads to fairness issues.

[Kirk Maldonado]

Jeanine:

Do you now agree with my position that the 30-month coordination of benefits period commences when the person could become entitled to Medicare benefits, not when the person actually becomes entitlted (if ever)?

[jeanine]

I'll concede on Part A but not Part B.

[Kirk Maldonado]

Jeanine:

Although stated in an abbreviated fashion, in your last post you concluded that the 30-month coordination of benefits period begins on the date dialysis starts for Part A benefits, but not for Part B benefits.

I disagree with you on this issue as well. While the operative language refers to the person's entitlement to Part A benefits, that date is used as the relevant date for starting the coordination of benefits period.

There is no evidence in either the wording of the statute or the regulations indicating that the Medicare as Secondary Payer Rules are limited to Part A benefits in this case. Nor have I seen any support for that position in any of the treatises or articles that I've read on this topic.

Here is the operative language from the statute. I marked my deletions of superfluous text by * * * while I marked my summaries of the deleted text by putting my language in brackets:

A group health plan * * * —

(i) may not take into account that an individual is entitled to or eligible for benefits under this title * * * [because of end-stage renal disease] during the 12-month period which begins with the first month in which the individual becomes entitled to benefits * * * [because of end-stage renal disease], or, if earlier, the first month in which the individual would have been entitled to benefits * * * [because of end-stage renal disease] if the individual had filed an application for such benefits; and

(ii) may not differentiate in the benefits it provides between individuals having end stage renal disease and other individuals covered by such plan on the basis of the existence of end stage renal disease, the need for renal dialysis, or in any other manner;

except that clause (ii) shall not prohibit a plan from paying benefits secondary to this title * * * when an individual is entitled to or eligible for benefits [because of end-stage renal disease] after the end of the 12-month period described in clause (i). * * * Effective for items and services furnished on or after the date of enactment of the Balanced Budget Act of 1997, (with respect to periods beginning on or after the date that is 18 months prior to such date), clauses (i) and (ii) shall be applied by substituting “30-month” for “12-month” each place it appears.

If your position were correct, the language would say that the plan could not discriminate on the basis of the benefits that the person receives under Part A. But there is no such limitation.

Thus, the statutory language clearly demonstrates that the reference to Part A benefits is only used for determining when the 30-month coordination of benefits period begins; not to limit the Medicare as Secondary Payer Rules in this case to Part A benefits.

[jsb]

Thanks all for the responses.

To try and capture the essence of what has been set out so far:

1. There is apparently congressional intent that an employer plan not have to remain primary on ESRD.

2. ESRD (as evidenced by dialysis) can trigger Medicare "eligibility".

3. One cannot force a plan member into Medicare entitlement (eg. become enrolled).

4. The plan could limit benefits for ESRD (beyond the 30 month COB period) to amounts in excess of what should have been paid by primary Medicare. (Notification to the member of any such plan provision highly recommended before taking action.)

So back to my original question, can I require a participant with ESRD to enroll in Medicare as a condition to continued coverage under my Plan?

A - Only at my great legal peril. However benefits can be reduced for ESRD beyond the 30 month COB period to the extent of payments that should have been made by Medicare as a primary payor, thus providing a significant incentive for my member to secure their Medicare entitlement.

Would this be a fair, albeit overly simplified, summary?

Thanks again to all.

[Kirk Maldonado]

I think that is a fair summary, although I would have worded it quite differently. Thus, the employer can't force the employee to enroll in Medicare, but if the person hasn't enrolled by the time the 30-month coordination of benefits period expires, then the employee will only receive restricted amounts of benefits from the plan.

[jsb]

Kirk, thanks again for your insights and direction on this issue.

[Kirk Maldonado]

You're welcome.

There aren't many secondary materials on this topic. Also, the statutes and regulations aren't terribly well written or organized. Working in this area is a great way to produce a lot of headaches.

I've just spend over a half hour trying to download a basic form from the federal agency's website. I gave up and got a person from that agency on the phone. Apparently, this a form that they feel you have to go into their office to pick up; they don't want it on their website. The logic supporting that conclusion does not seem to be immediately apparent to me.

[Guest slb1113]

FYI - the New York State Health Insurance Plan, which provides insurance to a huge number of NYS employees and related agencies, requires an employee to enroll in Medicare Part A and B as primary when:

An active employee, or the dependent of an active employee, who develops end stage renal disease becomes eligible for primary Medicare coverage and must enroll in Medicare Parts A and B under the following circumstances:

Medicare imposes a three-month waiting period after a patient is diagnosed with end stage renal disease before Medicare becomes effective. However, Medicare waives this waiting period if the patient enrolls in a self-dialysis training program within the first three months of the diagnosis or receives a kidney transplant within the first three months of being hospitalized for the transplant.

After the three-month waiting period, Medicare begins to count a 30-month waiting period that the patient must satisfy before Medicare is primary. The three-month waiting period, if not waived, plus the 30-month waiting period, makes a total waiting period of 33 months.

During the waiting period, NYSHIP (or another employer's plan) continues to be the patient's primary insurer. At the end of the waiting period, Medicare becomes the patient's primary insurer and NYSHIP will be the patient's secondary coverage.

Since Medicare will provide only secondary benefits during the waiting period, NYSHIP does not require Medicare enrollment during this time and will not provide reimbursement for the Part B premium. At the end of the waiting period, when Medicare becomes the primary insurer, NYSHIP requires the patient to have Medicare in effect.

If you or a dependent is eligible for Medicare coverage that is primary to NYSHIP, but has failed to enroll when first eligible, you will be responsible for the full cost of medical services that Medicare would have covered.

So, not only do they REQUIRE it after 33 months, they will NOT pay any claims (if an employee refuses to enroll) that otherwise might have been paid by Medicare as primary. You can't force an employee with ESRD to enroll, but your plan can refuse to pay claims that would have been covered by Medicare. You might consider the Medicare Part B reimbursement as well.

[Kirk Maldonado]

My recollection is that the federal government can't regulate state govenments. Thus, state agencies are generally exempt from federal law. So the fact that a state agency can do something doesn't mean that a private employer can do it too without violating federal law.