HEALTH WEALTH CAREER. Medicare Primer

Transcription

1 HEALTH WEALTH CAREER Medicare Primer

2 Medicare Basics MERCER

3 Medicare Basics Federally subsidized health insurance for: Age 65 and older Under age 65 with certain disabilities Any age with end stage renal disease (permanent kidney failure requiring dialysis or a kidney transplant) Eligible regardless of income Medicare Parts A, B, C and D as well as Medicare Supplement policies It is not the same as Medicaid Health insurance for low-income low asset individuals Combination of Federal and State subsidies MERCER

4 Medicare Overview The Four Parts of Medicare Part A Part B Part C Part D Hospital Insurance Medical Insurance Medicare Advantage Plans (like HMOs/PPOs) Medicare Prescription Drug Coverage Includes Part A, Part B and sometimes Part D coverage MERCER

5 Medicare Part A Overview Medicare Part A (Hospital Insurance) Helps cover inpatient care in hospitals Part A also helps cover a skilled nursing facility, hospice, and home health care if you meet certain conditions Catastrophic insurance plan Inpatient coverage for up to 60 days $1,288 deductible* per benefit period No premium if you or your spouse earned 40 credits (10 years) in a job subject to FICA taxes If 40 credits were not earned, for 2016 Part A costs $411 per month (reduced to $226 per month if you or your spouse earned at least 30 credits). * 2016 rate MERCER

6 Medicare Part B Overview Medicare Part B (Outpatient Insurance) Helps cover medically necessary services like doctor services, outpatient care and some medical equipment Part B also helps cover some preventative services to help maintain your health and to keep certain illnesses from getting worse 80/20 insurance plan With a $166 annual deductible* $121.80* monthly premium Could pay more or less depending on income and Social Security will inform you directly of your cost if it is different * 2016 rate MERCER

7 Medicare Part C Medicare Advantage Public/Private Partnership Medicare Advantage plans are managed by private insurance companies that have been approved by the Centers for Medicare and Medicaid Services (CMS) Combined Coverage Part A, Part B and usually Part D (prescription drug) included Coverage Varies by Plan Plans must cover medically necessary services Can charge different co-payments, coinsurance or deductibles for these services Claims processes vary by carrier MERCER

8 Medicare Part D Overview Public/Private Partnership Part D plans are managed by private insurance companies that have been approved by CMS Medicare Part D (Prescription Drug Coverage) CMS approves drug plans offered to public annually Helps cover prescription drugs, may help lower your prescription costs and help protect against higher costs in the future Voluntary Enrollment Government will apply a permanent premium penalty if you wait to enroll MERCER

9 What is a Medicare Supplement Plan? Medicare Supplement Plans/Medigap Plans Plans that provide medical insurance in addition to Medicare Parts A and B (Original Medicare) May pay both the Medicare A and B deductibles and coinsurance (your 20%) Private sector offered and administered Standardized Plan Designs: A, F, N, etc. Plan F is Plan F no matter which company offers it Coverage is the same, but premiums will differ Do not include Prescription Drug coverage You need to select and enroll in a separate Part D plan MERCER

10 Active employment & Medicare MERCER

11 Active employment Enrollment timelines and payer rules under Medicare There are three enrollment periods under Medicare to elect Parts A and/or B: 1. Initial Enrollment Period (IEP): the seven month period beginning three months before the month in which age 65 is attained; 2. General Enrollment Period (GEP): the first quarter of each year for a late enrollee to elect Medicare Part B, effective the following July 1 (with penalty); and 3. Special Enrollment Period (SEP): the eight-month period that begins once active group coverage ends. The order of Medicare paying depends on employment status: 1. Under a group active plan, the group plan pays primary and Medicare pays secondary. 2. Under a group retiree plan, Medicare pays primary and the group plan pays secondary. MERCER

12 Active employment Medicare Enrollment timelines Not eligible for TC s retiree health plan What should an employee do during these enrollment periods? The answer depends on age and separation date. Period Approaching 65 Over 65 IEP Remain active: no need to elect any parts of Medicare. Retiring at 65: should elect Parts A, B & D effective the first of the month in which age 65 is attained. Not applicable GEP Not applicable Applies only if the employee did not elect Medicare Part B during the IEP if retiring at age 65. SEP The IEP overrides the SEP for someone retiring at age 65. Elect Parts A, B & D no later than eight months from loss of group active coverage. MERCER

13 Active employment Medicare Enrollment timelines Eligible for TC s retiree health plan What should an employee do during these enrollment periods? The answer depends on age and separation date. Period Approaching 65 Over 65 IEP Remain active: no need to elect any parts of Medicare. Retiring at 65: should elect Parts A & B effective the first of the month in which age 65 is attained. Not applicable GEP Not applicable Applies only if the employee did not elect Medicare Part B during the IEP if retiring at age 65. SEP The IEP overrides the SEP for someone retiring at age 65. Elect Parts A& B before loss of group active coverage so no gap in coverage occurs. MERCER

14 Group retiree medical plans Medicare nuances These scenarios pose challenges and are the source of common mistakes: 1. An employee separates from service and enters TC s group retiree medical plan. CMS does not consider group retiree plans to be creditable coverage for Medicare Part B purposes so a separating employee in this case should elect Medicare Part B (and Medicare Part A if they have not already done so) as soon as possible. 2. An employee separates from service and elects COBRA. The employee must elect Medicare Parts A and B before electing COBRA to remain on COBRA. If the employee elects COBRA before electing Medicare Parts A and B, the employee will lose COBRA. Note that CMS does not consider COBRA to be creditable coverage for Medicare Parts A and B purposes so if an employee elects COBRA, decides not to elect Medicare Part B (because of the cost) and then 18 months later when COBRA exhausts the employee attempts to elect Medicare Part B, they will be subject to the GEP. 3. Medicare Part D (drug). CMS does consider COBRA and group retiree coverage creditable. MERCER

15 Health Savings Accounts Medicare nuances If an employee is under age 65, enrolls in an HSA and then attains age 65, note: 1. During the IEP, an employee can waive Medicare (assuming they will continue group active coverage) without penalty. 2. However, if an employee draws Social Security, they are automatically enrolled in Medicare Part A (typically premium free for those who qualify).* 3. Per IRS regulations, an employee cannot enroll in Medicare and participate in an HSA: If the employee already participates in an HSA and then enrolls in Medicare, they can no longer contribute to the HSA. If the employee did not have an HSA and then enrolls in Medicare, they can not open an HSA. *The full retirement age for Social Security is gradually rising to age 67, but the Medicare eligibility age is not scheduled to increase from age 65 so an employee should apply for Medicare during their IEP, if applicable. MERCER

16 Services provided by Mercer Health & Benefits LLC. California Insurance License 0E75483 MERCER