How to Advise Medicare-Eligible Employees. Eric Johnson ComedyCE.com Provider Course 96731

Transcription

1 How to Advise Medicare-Eligible Employees Eric Johnson ComedyCE.com Provider Course

2 Your Role 2

3 Some agents Some agents specialize in just one market segment. 3

4 Other agents Other agents sell anything and everything their license allows. 4

5 Regardless No matter which brand of agent you are, you want to provide your clients with accurate & factual information. 5

6 Regardless This requires that you have an understanding of both group health insurance and the Medicare program so that you can properly advise employees who are eligible for both. 6

7 Many Questions Agents working with employer groups are often asked basic Medicare questions, such as: Which pays first my employer plan or Medicare? Which plan is best for me? What are the pros and cons of delaying Medicare and staying on my group plan? 7

8 Answers Vary There is no one size fits all solution. 8

9 Answers Vary In some cases, it makes sense for the employee to stay on the group plan. 9

10 Answers Vary In some cases, declining the group coverage and going with Medicare primary might be the better choice. 10

11 Answers Vary What s best for the employee could depend on many different factors, such as family status, income level, RX usage, employer plan options, group size. Each individual s situation will be unique. 11

12 Situations Also Vary Employers have different motives, too. Some employers want to keep employees on their payroll, and other employers are sometimes looking to minimize the effects of an aging demographic. 12

13 Situations Also Vary Can an employer force an employee off the company s group plan and onto Medicare? 13

14 Situations Also Vary Can an employer force an employee off the company s group plan and onto Medicare? NO! 14

15 Employee Rights Medicare-eligible employees have the same rights to enroll in or decline the group health plan as other active employees. 15

16 Employee Rights The employer cannot force an employee with Medicare into a particular plan or pressure him to waive the group health coverage and sign up for Medicare primary instead. No peer pressure!! 16

17 Employee Rights The employer also cannot pay the premiums for a Medicare supplement for an active employee. 17

18 What you can do Offer education for employees about their options so that they can make an informed decision. This where the agent can help. 18

19 Purpose of this course 19

20 What s the point? The purpose of this course is to make sure that agents who sell group health products are familiar with how Medicare works and are aware of the Medicare rules and regulations so that they can properly advise clients who are eligible for both. 20

21 What s the point? Likewise, this course also seeks to make agents who sell Medicare products aware of some of the things they should consider when advising clients who are also eligible for group coverage. 21

22 What s the point? Ultimately, it may make sense for agents who choose to specialize in a particular market segment to network and team up with agents who specialize in other segments so that they can make sure their clients are receiving sound, actionable advice. 22

23 Quick Medicare Overview Medicare is a government health insurance program for people over the age of 65 and people on Social Security Disability. 23

24 Quick Medicare Overview Medicare was signed into law in

25 Quick Medicare Overview Medicare has been modified over the years, most significantly by the Balanced Budget Act of 1997, the Medicare Modernization Act of 2003 and the recent healthcare reform legislation. 25

26 Let s look at the pieces Medicare has a variety of pieces, some of which work together with other pieces. 26

27 Medicare Has 2 Primary Parts 27

28 Part A is Hospital Coverage Part A includes: Hospital Skilled Nursing Home Health Blood Hospice 28

29 Part B is Outpatient Coverage Part B includes: Dr. Visits Lab-work Preventive Chemo/Radiation Dialysis Durable Medical Equipment 29

30 What Medicare Doesn t Cover $1,216 Deductible $304 daily coinsurance $608 daily coinsurance Anything after Day 150 First 3 pints of blood $152 Daily SNF coinsurance From Days $147 Deductible 20% coinsurance, unlimited!! meaning..it does not cover: 20% of chemotherapy 20% of radiation 20% of dialysis 30

31 Medigap will fill those holes Medigap was created to fill some of those gaps in coverage. It is essentially a way to pre-pay for spending you might incur. 31

32 Medigap: How to Explain Think of a Medigap policy as bolting onto the back of your Medicare card. It catches all the costs that Medicare doesn t. Little or $0 left for you to pay. 32

33 Medigap Cost A Plan F might cost roughly $120 - $160/month for a person age 65, non-tobacco. Not everyone can afford a supplement. 33

34 Don t Like Medigap Options? 34

35 What is Medicare Advantage? Essentially, MA is a convenient way to package Medicare covered services together into one program which finances and delivers the benefits. 35

36 Works Like Their Current Ins. Medicare Advantage functions similarly to the traditional insurance plan that most employees are used to. 36

37 Primary features Low monthly premium Some cost-sharing including: Co-pays Deductibles Coinsurance 37

38 Medicare Part D The final piece of the puzzle 38

39 Medicare Part D Part D provides prescription drug coverage and can be incorporated into a Medicare Advantage plan or purchased separately from an insurance company. 39

40 Those are the Basics Now let s take a look at each part individually and show some of the things group health agents need to be aware of when advising their clients. If you sell Medicare products, this will help you help clients who are struggling to decide between employer-sponsored insurance and Medicare 40

41 Medicare Part A To qualify: 40 quarters of work history or married to someone who has 40 quarters One can also purchase Part A about $426 in

42 Medicare Part A Part A coordinates with Employer Group Health Insurance, so if Part A benefits have already been earned, it costs the employee nothing and may benefit him. Example: John works for a large employer. His group health insurance has a $3K deductible. He has a 3- day hospital stay for a knee replacement surgery. The hospital bills $17,000 to his insurance company. Medicare Part A kicks in to limit John s cost-sharing to $1216 for hospital benefits 42

43 Common Part A Pitfalls Advising to delay Medicare altogether Late penalty is 10% if you were not eligible for Premium-free Part A and you fail to enroll in it. Penalty is for the numbers of years you went without X 2. 43

44 Postponing Part A A little-known rule in the Social Security Administration s Program Operations Manual System (used for processing claims) says that anyone who opts out of Part A also forfeits all past and future SS retirement income benefits until Medicare Part A is reinstated. 44

45 Postponing Part A In 2012, Federal District Court Judge Rosemary Collyer dismissed a two and a half year lawsuit (Hall vs Sebelius) that sought to allow people receiving Social Security benefits to opt out Part A. 45

46 Postponing Part A The lawsuit, originally filed in 2008, argues that the two government programs (SS and Medicare) are voluntary and that the application for each of these programs is not dependent on the application for the other. The judge disagreed. 46

47 Postponing Part A In dismissing the case, Judge Collyer said that Requiring a mechanism for Plaintiffs and others in their situation to disenroll would be contrary to congressional intent, which was to provide mandatory benefits under Medicare Part A for those receiving Social Security retirement benefits. Collyer concluded that the plaintiffs are trapped in a government program intended for their benefit. They disagree and wish to escape. The Court can find no loophole or requirement that the Secretary provide such a pathway. 47

48 What is she really saying? The law is so stupid that she can t believe that she can t find a way out of it for these poor people!! 48

49 Postponing Part A The plaintiffs are pursuing appeal. 49

50 Summary Advising someone on an H.S.A.-compatible Health Insurance to cancel Part A without checking their SS income status. An employee or individual who is enrolled in Medicare Part A or Part B is ineligible to make contributions to a Health Savings Account. If employer or group agent recommends that an employee dis-enroll from Medicare, they create a very dangerous situation if the employee is already receiving SS benefits. 50

51 Medicare Part B Part B coordinates with Employer Group Health Insurance, but Part B has a monthly premium, so a few things need to be evaluated: 1) Total cost picture must be obtained before deciding whether to enroll in Part B while staying with the group plan, or to recommend employee leave group insurance to choose Medicare primary instead. 2) This includes determining the right Part B premium that the employee is likely to pay. 3) This also includes estimating their average deductible spending annually at the current time. 4) Do the employee s current doctors accept Medicare? 51

52 Medicare Part B premiums A person s income affects their Medicare Part B premiums. Income is assessed for the tax year 2 years prior. Be sure to ask if income was higher at that time. 52

53 Analyzing the Need for Part B Jane works for a large employer. Her group health insurance has a $2K deductible, but only costs her $40/month. It has reasonable doctor & RX co-pays. She is single and her income is $60,000 annually. Considerations: How much will Jane pay for Part B if she enrolls? How concerned is Jane about the $2K deductible how much outpatient care does she use? 53

54 Analyzing the Need for Part B Jane works for a large employer. Her group health insurance has a $2K deductible, but only costs her $40/month. It has reasonable doctor & RX copays. She is single and her income is $60,000 annually. Considerations: Jane will pay $104.90/mo for Part B since her income is not above $85K Jane receives an expensive monthly injection for rheumatoid arthritis. The shot costs around $800, so she usually meets her deductible each year Logical Outcome: Jane s group insurance is very affordable since the employer pays most of the monthly premium Enrolling in Part B means Medicare will pay for 80% of Jane s shot after her once-annual Part B deductible ($147 in 2014) Enrolling in Part B makes sense for Jane 54

55 Watch the Part B premium Jane works for a large employer. Her group health insurance has a $2K deductible, but only costs her $40/month. It has reasonable doctor & RX copays. She is single but has a very high income of $250K annually Considerations: Jane will pay over $335/mo for Part B due to Medicare Jane receives an expensive monthly injection for rheumatoid arthritis. The shot costs around $800, so she usually meets her deductible each year Logical Outcome: Jane s group insurance is very affordable since the employer pays most of the monthly premium Part B, however, will cost Jane more over the year than her deductible will It s in Jane s best interest to decline Part B for now 55

56 Medicare or Stay with Group? Similar scenario: Jane works for a large employer. Her group health insurance has a $2K deductible, but costs her $250/month. It has reasonable doctor & RX copays. She is single and her income is $60,000 annually. Considerations: Jane will pay $104.90/mo for Part B since her income is not above $85K Jane receives an expensive monthly injection for rheumatoid arthritis. The shot costs around $800, so she usually meets her deductible each year Logical Outcome: Jane will spend $3000 on premiums and $2000 for her deductible Jane could enroll in Part B with a Plan F supplement, essentially eliminating all deductible spending, for about $250/month It s in Jane s best interest to leave the group plan for Medicare unless she has significant Part D coverage gap exposure 56

57 Common Part B Pitfalls Not considering group size Medicare is primary when a group has less than 20 people. This means that the group insurance carrier can pay as if the person was enrolled in Part B whether they are or not. 57

58 When Medicare is Primary Example: Scott works for a company that has 10 employees. His group health insurance has a $1000 annual deductible, and his employer picks up most of the cost of the employee premium. He delays enrolling into Part B, and later on when he has an expensive MRI procedure, he is shocked to find that his employer group health plan will only pay 20% of the bill. What just happened? 58

59 Primary vs. Secondary Less than 20 employees = Medicare is already primary and Part B can t pay 80% of the outpatient bill if Part B is not in force. 59

60 About Small Employers Smaller groups often have higher premiums. In many cases it makes sense for the employee to consider Medicare primary. However, it also makes it tempting for an employer to want to push a sick employee off the group. Solution: Schedule a conference call for your employer with an agent who writes Medicare products, and give the employee the chance to hear all their options and make their own decisions 60

61 Warning! Medicare can and does pursue prosecution of groups who are caught forcing or enticing employees off of their plan and onto Medicare primary. Be careful what you advise your client, especially if it s in writing. 61

62 Warning! Don t risk your license for an employer who wants to break the law. Be careful what you advise your client, especially if it s in writing. 62

63 Common Part B Pitfalls Another pitfall: not advising the employee or group that COBRA is NOT creditable coverage for Part B An employee has 8 months to enroll in Part B without penalty after the end of ACTIVE group coverage (keyword: active!) Solution: Educate your employer, and make sure the employer educates employees. 63

64 Part B Late Enrollment Penalty Consequences: Employee must pay a 10% lifetime penalty for every year that he or she failed to enroll in Part B when eligible and must wait for the next General Enrollment Period to sign up for Medicare Part B. The GEP is from January 1 st March 31 st each year, and coverage doesn t begin until the following July. 64

65 Medicare Part C Medicare Part C is Medicare Advantage, which is optional so there is no penalty for not enrolling. 65

66 Medicare Part C People do not understand it, so for purposes of discussing options with employees who have Medicare, don t confuse them. 66

67 Medicare Part D Medicare Part D is a huge consideration in whether or not it is wise for an individual to switch over to Medicare primary. This is due to the coverage gap. 67

68 Medicare Part D Late enrollment into Medicare Part D will cause a 1% penalty for every month the individual was eligible but not enrolled. The penalty continues for the rest of the beneficiary s life. If an employee misses his or her initial election period for Part D, he cannot enroll in Part D until the next annual election period which runs from October 15 th Dec. 7 th. 68

69 Medicare Part D H.S.A- compatible plans are usually not creditable coverage for Medicare Part D, so if an employee does opt out of Medicare Part A and Part B so they can contribute to a health savings account, they will incur the late enrollment penalty for Part D later on. Help the employee compare the value of their current insurance against the future penalty they will owe. 69

70 Quiz If a group has more than 20 employees, is Medicare primary or secondary? 70

71 Quiz True or False: Everyone pays the same premium for Part B. 71

72 Quiz What is the late enrollment penalty for Part B? 72

73 Quiz After retirement, how many months does a person have to enroll in Part B without a penalty? 73

74 Health Reform s Impact Does the PPACA legislation affect Medicare? YES. PPACA affected Medicare Part D positively, by implementing drug discounts in the gap. PPACA may impact Medicare Advantage negatively by cutting funding to the program. Stay tuned. 74

75 Summary 75

76 Summary It is the agent s responsibility to gather all the pieces of information necessary to evaluate the numerous options someone has when they have eligibility for Medicare and group insurance as well. Some of the main pieces of info you need are: What is the size of the employer? (Is Medicare primary or secondary?) What will it cost this employee to add Medicare Part B or D? Is the employee likely to have coverage gap spending with Medicare Part D? What is the cost for staying on group insurance compared to moving to Medicare 76

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