Trying to figure out Medicare can be one of the most frustrating aspects of retirement. Even the savviest of retirees struggle with figuring out when to enroll and which parts to enroll in – there’s Part A, Part B, Part C, Part D, Medigap plans and so on. And, what in the world is a donut hole, anyway?
What is Medicare?
Medicare is the government health care program for people 65 and over as well as some younger people with disabilities. Medicare’s coverage plays an important role in containing medical costs as you age. Medicare is a different program than Medicaid, which offers health and other services to eligible low-income people of all ages.
Types of Medicare
- Part A covers inpatient hospital stays, skilled nursing facility stays, some home health visits, and hospice care. Generally, you don’t have to pay premiums if you or your spouse paid Medicare taxes for at least 10 years.
- Part B covers doctor visits and other medically necessary services and supplies. That includes preventive services or health care to prevent illness, as well as ambulance services, durable medical equipment and mental health coverage. Part B comes with a monthly price tag – the standard premium was $148.50 in 2021.
- Part C or Medicare Advantage is a type of health plan offered by private insurance companies that provides the benefits of Part A and Part B and often Part D as well. These bundles plans may have additional coverage such as vision, hearing, dental care and may even include perks such as gym memberships or transportation to doctor’s appointments. Medicare Advantage plans have an annual limit on out-of-pocket costs. Medicare Advantage plans are typically HMOs or PPOs.
- Part D is the prescription drug benefit that covers most outpatient prescription drugs. It is a separate plan provided by private Medicare approved companies, and you must pay a monthly premium. Unless you have creditable drug coverage and will have a Special Enrollment Period, you should enroll in Part D when you first get Medicare. If you delay enrollment, you may face gaps in coverage and enrollment penalties. Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a “donut hole”). That means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again.
- Medigap or Medicare Supplement Insurance is an additional health insurance policy you can buy from a private insurer to help pay some of the costs not covered by Medicare Part A and Part B, including deductibles, coinsurance and health care if you travel outside the U.S. Medigap policies do not cover prescription drugs, dental, vision, hearing aids, private nursing care or long-term care. There are 10 types of Medigap plans available in most states.
When to Sign Up for Medicare
For most people, signing up for Medicare occurs during a 7 month initial enrollment period(IEP). The IEP starts 3 months before you turn age 65 and continues for 3 months after your birthday. You may be eligible sooner if you have a disability, End-Stage Renal Disease (ESRD), or ALS (also called Lou Gehrig’s disease).
During the IEP, you can sign up for Medicare Part A. Even if you are still working after you turn 65, you should consider signing up for Part A now. If you’ve worked and paid Medicare taxes, it comes at no cost to you and covers hospital services.
You can join, switch, or drop a Medicare Health Plan or a Medicare Advantage Plan (Part C) with or without drug coverage during these times:
- Initial Enrollment Period – When you first become eligible for Medicare, you can join a plan.
- Open Enrollment Period – From October 15 – December 7 each year, you can join, switch, or drop a plan.
- Medicare Advantage Open Enrollment Period – From January 1 – March 31 each year, if you’re enrolled in a Medicare Advantage Plan, you can switch to a different Medicare Advantage Plan or switch to Original Medicare (and join a separate Medicare drug plan) once during this time.
Let’s be honest, no one gets too excited about enrolling in Medicare, but the more you know, the easier it is. Being prepared for life’s unexpected twist and turns and keeping up with your health care is more important than ever. By understanding the ABC’s of Medicare, you are empowering yourself for your future!
Other Helpful Resources Include:
Understanding Medicare’s Options: Parts A, B, C and D
What is Medicare?
An Overview of Medicare
Are you an employer that offers or provides group health coverage to your workers? Does your health plan cover outpatient prescription drugs — either as a medical claim or through a card system? If so, be sure to distribute your plan’s Medicare Part D notice before October 15.
Medicare began offering “Part D” plans — optional prescription drug benefit plans sold by private insurance companies and HMOs — to Medicare beneficiaries many years ago. People may enroll in a Part D plan when they first become eligible for Medicare.
If they wait too long, a late enrollment penalty amount is permanently added to the Part D plan premium cost when they do enroll. There is an exception, though, for individuals who are covered under an employer’s group health plan that provides creditable coverage. (“Creditable” means that the group plan’s drug benefits are actuarially equivalent or better than the benefits required in a Part D plan.) In that case, the individual can delay enrolling for a Part D plan while he or she remains covered under the employer’s creditable plan. Medicare will waive the late enrollment premium penalty for individuals who enroll in a Part D plan after their initial eligibility date if they were covered by an employer’s creditable plan. To avoid the late enrollment penalty, there cannot be a gap longer than 62 days between the creditable group plan and the Part D plan.
To help Medicare-eligible plan participants make informed decisions about whether and when to enroll in a Part D drug plan, they need to know if their employer’s group health plan provides creditable or noncreditable prescription drug coverage. That is the purpose of the federal requirement for employers to provide an annual notice (Employer’s Medicare Part D Notice) to all Medicare-eligible employees and spouses.
Federal law requires all employers that offer group health coverage including any outpatient prescription drug benefits to provide an annual notice to plan participants.
The notice requirement applies regardless of the employer’s size or whether the group plan is insured or self-funded:
- Determine whether your group health plan’s prescription drug coverage is creditable or noncreditable for the upcoming year (2022). If your plan is insured, the carrier/HMO will confirm creditable or noncreditable status. Keep a copy of the written confirmation for your records. For self-funded plans, the plan actuary will determine the plan’s status using guidance provided by the Centers for Medicare and Medicaid Services (CMS).
- Distribute a Notice of Creditable Coverage or a Notice of Noncreditable Coverage, as applicable, to all group health plan participants who are or may become eligible for Medicare in the next year. “Participants” include covered employees and retirees (and spouses) and COBRA enrollees. Employers often do not know whether a particular participant may be eligible for Medicare due to age or disability. For convenience, many employers decide to distribute their notice to all participants regardless of Medicare status.
- Notices must be distributed at least annually before October 15. Medicare holds its Part D enrollment period each year from October 15 to December 7, which is why it is important for group health plan participants to receive their employer’s notice before October 15.
- Notices also may be required after October 15 for new enrollees and/or if the plan’s creditable versus noncreditable status changes.
Preparing the Notice(s)
Model notices are available on the CMS website. Start with the model notice and then fill in the blanks and variable items as needed for each group health plan. There are two versions: Notice of Creditable Coverage or Notice of Noncreditable Coverage and each is available in English and Spanish:
Employers who offer multiple group health plan options, such as PPOs, HDHPs, and HMOs, may use one notice if all options are creditable (or all are noncreditable). In this case, it is advisable to list the names of the various plan options so it is clear for the reader. Conversely, employers that offer a creditable plan and a noncreditable plan, such as a creditable HMO and a noncreditable HDHP, will need to prepare separate notices for the different plan participants.
Distributing the Notice(s)
You may distribute the notice by first-class mail to the employee’s home or work address. A separate notice for the employee’s spouse or family members is not required unless the employer has information that they live at different addresses.
The notice is intended to be a stand-alone document. It may be distributed at the same time as other plan materials, but it should be a separate document. If the notice is incorporated with other material (such as stapled items or in a booklet format), the notice must appear in 14-point font, be bolded, offset, or boxed, and placed on the first page. Alternatively, in this case, you can put a reference (in 14-point font, either bolded, offset, or boxed) on the first page telling the reader where to find the notice within the material. Here is suggested text from the CMS for the first page:
“If you (and/or your dependents) have Medicare or will become eligible for Medicare in the next 12 months, a federal law gives you more choices about your prescription drug coverage. Please see page XX for more details.”
Email distribution is allowed but only for employees who have regular access to email as an integral part of their job duties. Employees also must have access to a printer, be notified that a hard copy of the notice is available at no cost upon request, and be informed that they are responsible for sharing the notice with any Medicare-eligible family members who are enrolled in the employer’s group plan.
CMS Disclosure Requirement
Separate from the participant notice requirement, employers also must disclose to the CMS whether their group health plan provides creditable or noncreditable coverage. To submit your plan’s disclosure, use the CMS online tool and follow the prompts. The process usually takes only 5 or 10 minutes to complete. It is due with 60 days after the start of the plan year; for instance, for calendar year plans that will be March 1, 2022. If the plan’s prescription drug coverage ends or its status as creditable or noncreditable changes, submit a new disclosure within 30 days of the change.
By Kathleen A. Berger
Originally posted on Mineral
Enrolling in Medicare does not cause COBRA to start. Under the federal rules, COBRA must be offered to persons enrolled in the employer’s health plan only if they lose coverage because of certain specific events. Termination of employment is an example of a COBRA qualifying event. Becoming eligible for Medicare, or enrolling in Medicare, is not a COBRA qualifying event.
On the other hand, if someone is already on COBRA due to a prior event, and then they enroll in Medicare, COBRA will end. Early termination of COBRA due to Medicare enrollment only affects that person. If other family members also are on COBRA, they may continue for the remainder of the COBRA period assuming their premiums are paid when due and they do not enroll in Medicare or another group health plan.
Let’s look at another scenario: An employee enrolls in Medicare while continuing as an active employee covered under the employer’s health plan. Then the employee leaves the company. This will trigger a COBRA offer since loss of coverage due to termination of employment is a COBRA qualifying event. Can the former employee elect COBRA despite being enrolled in Medicare? Yes, because they were already enrolled in Medicare before they elected COBRA. They probably will choose not to elect COBRA due to the cost, and since Medicare will be the primary claims payer, but they have the choice.
There is one other rule about COBRA and Medicare that can be confusing. As we said, the employee who enrolled in Medicare while still working and covered under the employer’s plan later had a COBRA event. When loss of coverage is due to termination of employment, the COBRA continuation period is 18 months. Due to a special provision in the COBRA rules, the maximum COBRA period for the spouse or child (if also enrolled in the employer’s health plan when the COBRA event occurred) might be longer than 18 months. If the employee had first enrolled in Medicare no more than 18 months before the COBRA event, the maximum period for the spouse and children is 36 months counting from the employee’s Medicare enrollment.
For instance, let’s call the active employee Mary and say she enrolled in Medicare in January 2021 and then lost her group coverage when she terminated employment in May 2021. So, she enrolled in Medicare fewer than 18 months before her COBRA event. Her maximum COBRA period will be 18 months counting from May 2021, but COBRA for her spouse and children (if enrolled) could run for up to 36 months counting from January 2021.
Lastly, employers sometimes ask whether they can automatically terminate an employee’s (or spouse’s) group health coverage at age 65. Due to the federal Medicare as Secondary Payer (MSP) rules, employers with 20 or more workers cannot take into account anyone’s potential Medicare status in administering the group health plan. An employer with fewer than 20 workers also may be prohibited from basing health plan eligibility on the employee’s age due to the federal Age Discrimination in Employment Act (ADEA). We recommend employers review these matters with legal counsel.
By Kathleen A. Berger, CEBS
Originally posted on Mineral
Comparing Medicare health and prescription drug plans can be complicated. Keep in mind these 4 things to make your plan choice easier with the Medicare Plan Finder.
- Total cost for care. It’s important to think about your total out-of-pocket costs, including deductibles, copayments, coinsurance, maximums, and drug costs, that you’ll pay with a Medicare health or drug plan. When you compare plans with Medicare Plan Finder, we’ll explain these costs and help you find plans with the lowest costs. We’ll also automatically show you plans with the lowest drug and premium costs first.
- Provider choice. Some plan types have a network of providers you’ll have to use if you want to pay less. Medicare Plan Finder lets you filter your results by plan type, and explains how each plan type lets you choose providers. If you have a particular doctor or pharmacy that you prefer to go to, see if that plan has a network. If it does, check that your provider is in the plan’s network. You might also want to make sure that your plan’s network has providers to choose from that are convenient to you.
- Benefits. Many Medicare Advantage Plans include prescription drug, vision, hearing, and dental coverage. Maybe you travel a lot, or spend part of the year in a different state. If you do, see if your plan will cover you when you travel. When you use Medicare Plan Finder, you can view, filter, and compare these benefits.
- “Overall Star Rating.” Medicare Plan Finder features a star rating system for Medicare health and drug plans. The “Overall Star Rating” gives an overall rating of the plan’s quality and performance for the types of services each plan offers. A plan can get a rating between 1 and 5 stars. A 5-star rating is considered excellent. If a Medicare Advantage Plan, Medicare drug plan or Medicare Cost Plan with a 5-star rating is available in your area, you can use the 5-star Special Enrollment Period (once a year) to switch from your current Medicare plan to a Medicare plan with the 5-star rating.
Visit the Medicare Plan Finder to start comparing 2021 Medicare health and drug plans now.
Originally posted on Medicare.gov
The Centers for Medicare and Medicaid Services (CMS) published its final rule and fact sheet for benefit payment and parameters for 2020. Although the final rule primarily affects the individual market and the Exchanges, the final rule addresses the following topics that may impact employer-sponsored group health plans:
- The 2020 maximum annual limitation on cost sharing is $8,150 for self-only coverage and $16,300 for other-than-self-only coverage.
- For fully insured plans, any indication of a reduction in the generosity of a benefit for individuals that is not based on clinically indicated, reasonable medical management practices is potentially discriminatory.
- Amounts paid toward cost sharing using direct support by drug manufacturers (for example, coupons) to insured patients to reduce or eliminate immediate out-of-pocket costs for specific prescription brand drugs that have a generic equivalent are not required to be counted toward the annual limitation on cost sharing.
- Federally Facilitated Small Business Health Options Programs (FF-SHOPs) may operate a toll-free hotline rather than a more robust call center.
The final rule is effective on June 24, 2019. The final rule generally applies to plan years beginning on or after January 1, 2020.
By Karen Hsu
Originally posted by ubabenefits.com
Do you offer health coverage to your employees? Does your group health plan cover outpatient prescription drugs? If so, federal law requires you to complete an online disclosure form every year with information about your plan’s drug coverage. You have 60 days from the start of your health plan year to complete the form. For instance, for a calendar-year health plan, this year’s deadline is March 1, 2018.
The Centers for Medicare and Medicaid Services (CMS) is a federal agency that collects data and administers various federal programs. The agency utilizes the CMS online tool to collect information from employers about whether their group health plan’s prescription drug coverage is creditable or noncreditable. Creditable coverage means the group health plan’s prescription drug coverage is actuarially equivalent to Medicare’s Part D drug plans. In other words, the group plan is considered creditable if its drug benefits are as good as or better than Medicare’s benefits.
To confirm whether your plan provides creditable or noncreditable coverage, check with the plan’s carrier or HMO (if insured) or the plan’s actuary (if self-funded). CMS provides guidance to help plan sponsors, carriers, and actuaries determine the plan’s status.
Deadline for Disclosure
All group health plans that include any outpatient prescription drug benefits, regardless of whether the plan is insured, self-funded, grandfathered, or nongrandfathered, must complete the CMS disclosure requirement. There is no exception for small employers.
Complete the CMS online disclosure form every year within 60 days of the start of the plan year. For instance, for calendar-year plans, this year’s deadline is March 1, 2018.
Additionally, if your plan terminates or its status changes between creditable and noncreditable coverage, you must disclose the updated information to CMS within 30 days of the change.
Completing the Disclosure Form
The CMS online tool is the only method allowed for completing the required disclosure. From this link, follow the prompts to respond to a series of questions regarding the plan. The link is the same regardless of whether the employer’s plan provides creditable or noncreditable coverage.
The entire process usually takes only 5 or 10 minutes to complete. To save time, have the following information handy before you start filling in the form:
- Information about the plan sponsor (employer): Name, address, phone number, and federal Employer Identification Number (EIN).
- Number of prescription drug options offered (e.g., if employer offers two plan options with different benefit levels, the number is “2”).
- Creditable/Noncreditable Offer: Indicate whether all options are creditable or noncreditable or whether some are creditable and others are noncreditable.
- Plan year beginning and ending dates.
- Estimated number of plan participants eligible for Medicare (and how many are participants in the employer’s retiree health plan, if any).
- Date that the plan’s Notice of Creditable (or Noncreditable) Coverage was provided to participants.
- Name, title, and email address of the employer’s authorized individual completing the disclosure.
We suggest you print a copy of the completed disclosure to keep for your records.
Note: Employers that receive the Retiree Drug Subsidy (RDS), or sponsor health plans that contract directly with one or more Medicare Part D plans, should seek the advice of legal counsel regarding the applicable disclosure requirements.
Additional Disclosure Requirement
Separate from the CMS online disclosure requirement, employers also must distribute a disclosure notice to Medicare-eligible group health plan participants. The deadline for distributing the participant notice is October 14 of the preceding year. It often is difficult for employers to identify which employees and spouses may be Medicare-eligible, so most employers simply distribute the notice to all participants regardless of age or status. For information about the notice requirement, see our previous post.
Originally Published By ThinkHR.com