what employers and employees need to know about medicare legislation and eligibility

What Employers and Employees Need to Know About Medicare Legislation and Eligibility

Presented by,Jeff Johnson RHU, CEBSBrown and Brown Insurance

WHY?

Longer Life Span Reduced Savings Increasing Health Insurance Costs Enjoy Working

A Brief History

A Brief History

1945 Truman introduced a national health insurance plan.

1965 Johnson signed legislation. Truman is the first to enroll. Part B premium is $3 per month.

1972 eligibility for disabled and ESRD. Payments to HMOs Authorized.

A Brief History

1983 DRGs, payment to hospitals established. Civilian federal employees eligible.

1984 remaining federal employees eligible.

1988 Major overhaul of Medicare. Catastrophic and prescription benefits added.

A Brief History

1989 Major overhaul repealed. 1992 payments to physicians

established 2003 MMA

A Brief History

MMA, The bill passed 220-215, 5:30AM Added D Removed Rx from Medigap plans Added Inflation Adjustments to B ded. Added Initial Preventive care to B B premium based on income Added HSA Survey - Health Care for All Americans

Benefits

Benefits

Original Medicare Part A Hospital Part B Physicians Part D Prescription Drug (Medigap Policy)

Benefits

Part C - Medicare Advantage Former name - Medicare + Choice

HMO PPO PFFS MSA

Part D Prescription Drug Enrollment 15% WA, 23% OR, 29% CA

Benefits

New Premiums for Medicare B based on Income!

If your income is above $80,000 (single) or $160,000 (married couple), then your Medicare Part B premium may be higher than $93.50 per month

Benefits

MMA Inflation Adjustment - Deductibles

2005 2006 2007 A $912 $952 $992 B $110* $124 $131 C D $250 $265*

*first inflation adjustment

Medicare's Future

Medicare's Future

Budget Busting Currently comprises 13 percent of

federal spending By 2030, the Congressional Budget

Office projects it will consume nearly a quarter of the budget.

Medicare Unfunded Liability 4 Times greater than SS Unfunded Liability

Fiscal Wake up tour David Walker, Comptroller General of the

United States and Director of the Government Accountability Office,

Robert L. Bixby of The Concord Coalition Diane Lim Rogers of The Brookings

Institution Alison A. Fraser of The Heritage

Foundation Bi-partisan discussion

Fiscal Wake up tour

Seattle November 29, 2006 Noon-1:30, Westin Hotel www.seattlecityclub.org

Eligibility&Enrollment

Entitled = eligible and enrolled

Eligibility

Age 65 Disease

ESRD (enacted 1972) ALS (enacted in 2001)

Disability (enacted 1972) SS Elimination period of 5 months On SS Disability for 24 months

Eligibility Federal Retirement timeline

59.5 Can Start Withdrawal IRA, 401(k) 62 Can Start SS Early 65 Medicare (Today-80% males retired) 67 SS Normal 70 SS Max 70.5 Must Start Withdrawal Traditional

IRA, 401(k)

Enrollment

Enrollment time line for Employees Initial, General, Special Covered in next segment

Medicare Supplement (timing) Traditional Medicare Covered in next segment

What Employers Need to Know

What Employers Need to Know

TEFRA-Tax Equity and Fiscal Responsibility Act of 1982

Employers must offer their age 65+ employees with a current employment status, or the spouses of their employees, the same primary health care coverage as their younger employees

What Employers Need to Know

TEFRA Applies to Employers with 20 FT or PT

employees

What Employers Need to Know

TEFRA Coordination of Medicare and

Employer provided medical benefits

Employers plan pays FIRST* Medicare plans pays SECOND Medigap plan pays THIRD

What Employers Need to Know Coordination of Medicare and Employer

provided medical benefits

*Some exceptions Less then 20 employees Medicare pays first ESRD Employers plan pays first for 30 months

then Medicare pays first after 30 months of Medicare eligibility or entitlement

Group plan pays first for Multi-Employer plans that request an exception

What Employers Need to Know

Medicare Secondary Payer (MSP) demand letters.

Such a letter is usually sent because Medicare may have made primary payments for services furnished to Medicare beneficiaries that it believes should have been the primary payment responsibility of the group health plan.

What Employers Need to Know

Medicare and COBRA If you already have group health

coverage under COBRA when you enroll in Medicare, COBRA ends.

If you elect COBRA coverage after you enroll in Medicare, you can keep your COBRA continuation coverage

What Employers Need to Know

Creditable Coverage Annual Notice to Medicare eligible

employees Notice to all employees

Disclosure to CMS Internet

Resources

“Who Pays First” CMS Publication # 02179 40 pages

http://www.medicare.gov/Publications/Pubs/pdf/02179.pdf

Resources

“Enrolling in Medicare” CMS Publication # 11036 60 pages Look up - The Special Enrollment Period

for Medicare Part B, Medicare and Group Health Plan Coverage.

http://www.medicare.gov/Publications/Pubs/pdf/11036.pdf

Resources

“Choosing a Medigap Policy” CMS publication # 02110 100 pages Look up – I am over age 65 and still

working (or covered under my spouse’s health plan)

http://www.medicare.gov/Publications/Pubs/pdf/02110.pdf

Resources

Washington State Office of the Insurance Commissioner has a great publication:

“Retirement and your Health Insurance” Review the section on retiring after age 65.

http://www.insurance.wa.gov/publications/consumer/RetireGuide.pdf