Medicare and Small Business Health Insurance Coordination in NY

Medicare Estimation is a process for determining the secondary payment when Medicare Part B is primary, and the member has not enrolled in Medicare Part B. Medicare Estimation reduces the payment by the amount the primary Medicare Part B would have paid if the eligible member was enrolled. This amount is not covered by the fully insured plan. Remind your impacted members to consider enrolling in Medicare Part B.

Applicability

Medicare Estimation applies in any of the following scenarios:

• Member has Part A and no Part B, and Medicare is primary.
• Member has both Parts A and B (primary), but provider does not bill or participate in Medicare or has specifically opted out
  of Medicare.
• Member has Part B only (primary), but provider does not bill or participate in Medicare or has specifically opted out of Medicare.
  Medicare Estimation does not apply in these scenarios:
• Member has Part B, and provider is participating with Medicare. If the member has Part B, we pay secondary based on the
  actual amount Medicare paid.
• Medicare (any part) is the member’s secondary payer.
• Member is not eligible for Medicare.

The reduction is permissible under NY rule 11 NYCRR 52.23(l).
The process is described in the member’s certificate of coverage. For your reference, the New York plan exclusions state:

• Medicare or other governmental programs: “We do not Cover services if benefits are provided for such services under the federal Medicare program or other governmental program (except Medicaid). When You are eligible for Medicare, we will reduce our benefits by the amount Medicare would have paid for the Covered Services. Except as otherwise required by law, this reduction is made even if you fail to enroll in Medicare or you do not pay Your Medicare Premium. Benefits for Covered Services will not be reduced if We are required by federal law to pay first or if You are not eligible for premium-free Medicare Part A.”

Our process applies to Medicare-eligible members who have Medicare Part A, but not Medicare Part B, and Medicare is primary.
Medicare is primary in these scenarios:

• Medicare due to age, and group size is 19 or less.
• Medicare due to disability, and group size is 99 or less.
• Medicare due to end-stage renal disease (ESRD), and Medicare is primary depending on what stage of dialysis treatment
  member is in.
• Medicare primary (regardless of reason or group size) and a member not actively working (COBRA, state continuation, retiree).

Should a Medicare Eligible employee stay on a Group Health plan?

If you consider that Medicare eligible employees should now have Medicare parts A and B, wouldn’t it make more sense to have the employee take out a Medicare Supplement and prescription drug plan? The employer might even agree to pay for the premiums for these plans on the employee’s behalf. The overall savings to the employer in premium dollars, and the usual increase in benefits to the employee in lower out of pocket costs and no restrictive doctor network usually make this scenario a good option for both Employer and Employee. You should seek your own tax advice from your tax professional on tax deductibility for this scenario. We can assist in Medicare Supplement and Part D Rx insurance from United Healthcare AARP if you complete this quote request.

In summary, it is best to at least have Medicare Eligible employees understand that even though they are not required to have Medicare Part B, they are leaving themselves open to potential catastrophic medical bills if they don’t plan ahead. You might even insist they sign an acknowledgement to that affect.

James Eckardt is President of Peak Advisors in Holtsville NY. Peak Advisors specializes in affordable small group health insurance, Business Insurance and Senior Insurance products.  Peak Advisors will assist you in comparing, obtaining, and servicing all your New York business insurance needs. They have been providing low cost, high quality health insurance benefits for 30 years. Visit their small business health insurance page to find all of the current rates for small group health insurance plans for NY businesses.