One of NAHU’s most valued member benefits is access to the Compliance Corner, but did you know there is an entire section of the Compliance Corner that is dedicated to FAQs? Topics covered include employer reporting and notification, subsidies and individual penalties, the exchanges, essential health benefits, and much more. This week, due to a high number of inquiries on the topic, a new FAQ was posted in the Medicare Secondary Payer section:
Q: Can an employer with 20 or more employees offer an incentive to encourage an employee to not enroll in Medicare?
A: No. Here is the relevant provision copied from the Medicare Secondary Payer Manual (Chapter 1):
70 - Prohibitions Applicable to Employers Offering GHP Coverage (Rev. 1, 10-01-03)
70.1 - Financial Incentives
(Rev. 1, 10-01-03)
An employer or other entity is prohibited from offering Medicare beneficiaries financial or other benefits as incentives not to enroll in or to terminate enrollment in a GHP or LGHP that is or would be primary to Medicare. This prohibition precludes the offering of benefits to Medicare beneficiaries that are alternatives to the employer's primary plan (e.g., prescription drugs) unless the beneficiary has primary coverage other than Medicare. An example would be primary plan coverage through his/her own or a spouse's employer. This rule applies even if the payments or benefits are offered to all other individuals who are eligible for coverage under the plan. It is a violation of the Medicare law every time a prohibited offer is made regardless of whether it is oral or in writing. Any entity that violates the prohibition is subject to a civil money penalty of up to $5,000 for each violation.
70.2 - Discrimination in Offering Equal Benefits for Older and Younger Employees and Spouses (Rev. 1, 10-01-03) Section 1862(b)(1)(A)(i)(II) of the Act provides that GHPs of employers of 20 or more employees must provide to any employee or spouse age 65 or older the same benefits under the same conditions that they provide to employees and spouses under 65 if those 65 or older are covered under the plan on the basis of the individual's current employment status or the current employment status of a spouse of any age. The requirement applies regardless of whether the individual or spouse 65 or older is entitled to Medicare.