Medicare as Primary Election by Small Employers Participating in MEWAs

[Guest jhall]

I am posting this here as well as on the health plans board although I realize this board is intended for multiemployer pension plan issues but I am hoping that folks on this board might have particular expertise with MEWA issues as well.

I understand that the small employer exception which allows small employers to have Medicare pay primary rather than secondary for working aged employed by the small employer is generally extended to small employer groups participating in multiple employer group health plans (a category which I assume includes MEWAs) but only if the MEWA formally elects to have Medicare provide primary coverage. If the MEWA properly elects the small employer exception and complies with some basic reporting and disclosure obligations established by CMS, the exception basically permits the small employer threshold to be applied on a group-by-group basis in the context of a MEWA, even if the MEWA has some very large employer groups and a large number of total "plan" participants overall. In the absence of such an election, small employer groups participating in a MEWA with a range of large employer groups presumably are not entitled to the small employer exception.

My question is what happens if the MEWA has been acting as if this mandatory small employer election had been made years ago but, in fact, an election was never made. I assume the MEWA is on the hook for having to repay all amounts to Medicare on which Medicare paid as primary rather than secodnary and possibly pay interest and penalties as well. However, I have heard refernce to possibly being able to negotiate or work out a compromise with CMS on the issue if the MEWA voluntarily corrects the problem. I am curious if anybody out there has negotiated a compromise with CMS on similar grounds and, if so, exactly what is realistic to expect. (For example, is the compromise just that you have to pay Medicare back for all amounts they paid as primary but you get interest and penalties waived or is there a possiblity you can get Medicare to agree not to require return of all the amounts on which they paid primary if you can show that, but for the filing of the election, Medicare would have generally paid the amounts as primary. Thanks in advance for any assistance.