Medicare Rules

[Guest parrot87]

"Medicare beneficiaries are free to reject employer plan coverage, in which case they retain Medicare as their primary coverage. When Medicare is the primary payer, employers cannot offer such employees or their spouses a supplemental plan that pays for services covered by Medicare."

Is there a definitive list of ineligible "supplemental plans" out there? Would participation in an employer based POP plan be an "ineligible supplemental plan"? How about a medical FSA? How about a Medicare advantage plan which operates within the scope of "Medicare".

CMS is rather vague on this topic. Any links or clues to more information would be helpful. Thanks for any help.

[GBurns]

I do not understand what you are concerned or confused about.

Supplemental means additional.

Medicare is either secondary to employer provided coverage or it is primary coverage.

If Medicare is primary, all it means is that the employer cannot provide additional coverage that pays for items already covered (paid) by Medicare. In other words, no duplicated coverage.

Duplicating coverage and payments provide no allowable benefit to the insured and would only serve to enrich providers. As a matter of public policy, CMS is trying tocontrol unnecessary costs.

Additinally since the initial medical expense is already paid by Medicare, there technically is no remaining medical expense for which the secondary (employer provided) coverage would be paying. So additional (supplemental) coverage serves no rational purpose if it covers the same as Medicare.

You did not state why you think that an employer cannot provide an HRA or flex credits. Why not and What says so??

[GBurns]

Reimburse the employee for what?

[Don Levit]

Matthew:

I just came across information that may be helpful.

In 29CFR 2590.732©(5) it states under Supplemental Benefits, (i) The following benefits are excepted only if they are provided under a separate policy, certificate, or contract of insurance --

(A) Medicare supplemental health insurance (as defined under section 1882 (g)(1) of the Social Security Act; also known as Medigap or Medsup insurance;

© Similar supplemental coverage provided to coverage under a group health plan. To be similar supplemental coverage, the coverage must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles. Similar supplemental coverage does not include coverage that becomes secondary or supplemental under only a coordination of benefits provision.

(ii) The rules of this paragraph are illustrated by the following example:

Example. (i) An employer sponsors a group health plan that provides coverage for both active employees and retirees. The coverage for retirees supplements benefits provided by Medicare, but does not meet the requirements for a supplemental policy under section 1882 (g)(1) of the Social Security Act.

(ii) Conclusion. The coverage provided to retirees does not meet the definition of supplemental excepted benefits under this paragraph because the coverage is not Medicare supplemental insurance as defined under section 1882(g)(1) of the Social Security Act, is not a TRICARE supplemental program, and is not supplemental to coverage provided under a group health plan.

Don Levit

[Guest taylorjeff]

The wording refers to the original TEFRA, DEFRA and following early COBRA regulations regulating employer provided benefits to their "aged" employees (and later spouses). Prior to the mid eighties employers routinely purchased medicare supplemental plans or carve out plans for those employees who were medicare eligible. So Medicare automatically paid primary benefits for these employees and incurred the greater financial expense. The intent of TEFRA was to shift the financial burden of healthcare for the actively employed to the employer. This meant that employers with 20 or more employees (smaller employers were not impacted) could no longer provide supplemental or carve out plans to their medicare eligible employees. The employee was to be given the choice to continue on the employer's regular medical plan (with benefits paid the same as for the under 65 employees and no medicare subsidy) or the employee could opt out of the employer coverage entirely and go with Medicare alone (retain Medicare as their primary coverage). The employee could individually sign up for a private supplemental plan (not provided through his employer) but would have to sign up and pay for Part B as well as the supplemental plan premium. If he continued on the employer plan he could defer Part B until he left employment. Allowing the employer to provide a supplemental plan (or any other financial incentive to the employee to get off the employer plan and get onto Medicare) would have defeated the intent of the law (deficit reduction).

"Medicare beneficiaries are free to reject employer plan coverage, in which case they retain Medicare as their primary coverage. When Medicare is the primary payer, employers cannot offer such employees or their spouses a supplemental plan that pays for services covered by Medicare."

Is there a definitive list of ineligible "supplemental plans" out there? Would participation in an employer based POP plan be an "ineligible supplemental plan"? How about a medical FSA? How about a Medicare advantage plan which operates within the scope of "Medicare".

CMS is rather vague on this topic. Any links or clues to more information would be helpful. Thanks for any help.

[J Simmons]

Half a dozen one, six the other.

TEFRA was the bill by which the Medicare Secondary Payer rules became law.