Employer insurance Medicare eligible

We are a large employer (over 200 employees but only 35 who are medical eligible- most employees are part time). Getting fully insured insurance with BCBS. Got quotes from BCBS for employees and they gave “non Medicare eligible” ratea and “Medicare eligible” rates on the same quote. Medicare eligible were much higher. I thought for large employers they couldn’t charge employees or employers more for being Medicare eligible? If they can charge employer more, does employer eat the cost difference since the employee can’t be charged differently based on age?

If employer pays difference, if employee who is Medicare eligible chooses a buy up plan that would cost employer $500 a month for non Medicare employee but is $1200 above that for Medicare eligible employee does employer have to cover that extra $700 of the buy up plan option also?

What about if middle of year employee turns 65 but they signed up for 1/1 annual coverage under non Medicare eligible rate? Will bcbs flag it at that point and bill employer for the difference?

I can’t figure out why BCBS is quoting the Medicare eligible rate separately when everything online says employer and insurance has to offer same benefits at same price if employer has more than 20 employees.

Thanks in advance for any insight!

That's strange because (as you noted) it's clearly prohibited by the MSP rules for employers with 20+ employee companies.  I'd go back to BCBS to try to understand why they quoted the Medicare-eligible population differently.

Here's an overview:

• https://www.newfront.com/blog/medicare-secondary-payer-employer-size-requirements

• 2024 Newfront Medicare for Employers Guide

Here's the relevant cites:

45 CFR §411.108

(a) Examples of actions that constitute “taking into account”.

Actions by GHPs or LGHPs that constitute taking into account that an individual is entitled to Medicare on the basis of ESRD, age, or disability (or eligible on the basis of ESRD) include, but are not limited to, the following:

CMS MSP Manual:

https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/Downloads/msp105c02.pdf

10 -MSP Provisions for Working Aged Individuals

(Rev. 11755, Issued:12-21-2022, Effective: 01-23-2023, Implementation: 01-23-23)

Pursuant to 42 CFR § 411.100, and further specified in § 411.170 and § 411.172, Medicare pays secondary to GHP coverage for individuals age 65 or over if the GHP coverage is by virtue of the individual's current employment status or the current employment status of the individual's spouse. Health insurance plans for retirees or the spouses of retirees do not meet this condition and are not primary to Medicare. The law requires employers (as defined in Pub. 100-05, Chapter 1) to offer to their employees age 65 or over and to the age 65 or over spouses of employees of any age the same coverage as they offer to employees and employees' spouses under age 65. For example, a plan may not provide benefits that are less for individuals age 65 or over or charge policyholders premiums that are higher for individuals age 65 or over since this would create an incentive for these individuals to reject the GHP coverage and make Medicare the primary payer. This provision applies whether or not the individual age 65 or over is entitled to Medicare. This equal benefit rule applies to coverage offered to full-time and part-time employees. CMS accepts that an individual attains a particular age on the day preceding his or her birthday.

Way out of my practice area but I always read these H&W postings because I know you usually respond and I find myself learning something. Thanks

I wonder if this group has thought about carving out the Post 65's if they're retired and have Medicare A & B.  Groups can do that and don't have to contribute either.  Group has more that 20 ee's so can't carve out Post 65 actives.  

On 3/23/2024 at 2:17 PM, Insurnacegirl555 said:

If employer pays difference, if employee who is Medicare eligible chooses a buy up plan that would cost employer $500 a month for non Medicare employee but is $1200 above that for Medicare eligible employee does employer have to cover that extra $700 of the buy up plan option also?

I think that's what is expected to avoid violation of the provision quoted by Brian. The insurer is just telling you that the group premium is different based on the Medicare eligible. You can't pass that through to the individual employees.

Yeah it's an interesting question of whether the carrier is bound by those same MSP limitations, though.  In any case, agreed that MSP clearly prohibits the employer from changing the employee-share of the premium for the age 65+ population to account for the increase.  The employer can set the employee-share of the premium for all employees at a level sufficient to cover the intended percentage when taking into account the premium cost over the whole population, including the additional cost for the age 65+ employees.

Thank you for all the responses!  Still waiting on a response from broker/carrier.  In this case the employer only makes the employee liable for a flat dollar amount of the premium so sounds like they would just need to eat the difference.  Its not many employees who are 65+ so that part is good.