Medicare - Primary v. Secondary

[Guest TommyS]

We are an employer with 17 fulltime employees and 5 part-time employees. Only fulltime employees are eligible for our plan and 16 of them participate in our health plan with a major health insurer. One of the fulltime employees just turned 65, which, under our premium rate structure, would raise the cost of the premium for her insurance by about $400 per month (employer pays 75%, employee 25%) if Medicare not implicated. The insurer does provide a Medicare rate that is about one fifth the cost of the age and gender based premium. I asked our broker who in turn asked the insurer whether we could pay the Medicare rate for this employee.

Broker responded that insurer "looks at whether or not you have 20+ employees that are benefit eligible. If you do, then Medicare would be secondary and this individual would be charged the appropriate rate for their age. If you have less than 20+ benefit eligible employees, then Medicare would be primary. with insurer secondary. And then insurer would apply the Medicare primary rates as long as the form was submitted that shows the individual being enrolled in both Parts A & B."

My understanding from a few other posts was that the federal rules as to whether Medicare is primary or secondary are based upon how many employees the employer has regardless of whether they are fulltime or part time and not based upon number of "benefit eligible" employees (part-timers not eligible under our plan). But I would think that this major insurer would know the rules.

Is the insurer wrong? And, if insurer is wrong but is willing to charge us only Medicare premium rate for this employer after we've discosed the above facts, any problems for employer down the road if Medicare finds itself to be only secondary? Or did I miss something?

Thanks for your help.

[oriecat]

http://www.cms.hhs.gov/EmployerServices/05...erexception.asp

"The small employer exception provision of the MSP statue can be found at 42 U.S.C.1395y(b)(1)(A)(iii) and 42 CFR 411.172(b)."

http://assembler.law.cornell.edu/uscode/ht...95---y000-.html

http://edocket.access.gpo.gov/cfr_2006/oct...2cfr411.172.htm

[Guest TommyS]

We are an employer with 17 fulltime employees and 5 part-time employees. Only fulltime employees are eligible for our plan and 16 of them participate in our health plan with a major health insurer. One of the fulltime employees just turned 65, which, under our premium rate structure, would raise the cost of the premium for her insurance by about $400 per month (employer pays 75%, employee 25%) if Medicare not implicated. The insurer does provide a Medicare rate that is about one fifth the cost of the age and gender based premium. I asked our broker who in turn asked the insurer whether we could pay the Medicare rate for this employee.

Broker responded that insurer "looks at whether or not you have 20+ employees that are benefit eligible. If you do, then Medicare would be secondary and this individual would be charged the appropriate rate for their age. If you have less than 20+ benefit eligible employees, then Medicare would be primary. with insurer secondary. And then insurer would apply the Medicare primary rates as long as the form was submitted that shows the individual being enrolled in both Parts A & B."

My understanding from a few other posts was that the federal rules as to whether Medicare is primary or secondary are based upon how many employees the employer has regardless of whether they are fulltime or part time and not based upon number of "benefit eligible" employees (part-timers not eligible under our plan). But I would think that this major insurer would know the rules.

Is the insurer wrong? And, if insurer is wrong but is willing to charge us only Medicare premium rate for this employer after we've discosed the above facts, any problems for employer down the road if Medicare finds itself to be only secondary? Or did I miss something?

Thanks for your help.