Medicare Issues for Employed Beneficiaries. May 2013

Transcription

1 Medicare Issues for Employed Beneficiaries May

2 What are my responsibilities with regard to Medicare? Understand eligibility for and impact of employment on basic Medicare Parts A & B Medicare Qualifying Period and Extended Period of Medicare Coverage (EPMC) Understand eligibility for and impact of employment on Medicare Savings Programs (QMB/SLMB) Understand eligibility for and basic impact of employment on Part D low-income subsidy (extrahelp) 2

3 More Responsibilities Understand eligibility for Medicare Buy-in (Premium HI for Working Disabled) and the program which helps pay the Part A premiums - Qualified Disabled and Working Individuals (QDWI). Provide counseling which helps beneficiaries make informed choices about Medicare coverage options. 3

4 Limits on Your Responsibilities It is not your job to know what items/services Medicare covers or limits on coverage refer to call Medicare or contact the local SHIP program. It is not your job to resolve billing problems. You do need to know the basics about how Medicare works with other forms of insurance, but it is not your job to resolve problems with the interface between Medicare and other forms of insurance. 4

5 Who Is Eligible for Medicare? Individuals who are: Age 65 and insured for retirement benefits either through their own work, or through a spouse s work. Receiving SSDI who have met 24-month qualifying period for Medicare. Receiving CDB who have met the 24-month qualifying period that begins no earlier than the person s eighteenth birthday. Entitled to DWB or Medicare on a deceased worker s record and who have met the 24-month qualifying period. Certain individuals with End Stage Renal Disease (ESRD) 5

6 Medicare Qualifying Period MQP months are not dependent on getting a cash payment during the if the check has ceased due to paid work, MQP months continue to be served. A new MQP is not required for certain people who were previously on disability benefits (see Mod 4, p 36). Certain individuals never have to serve a MQP ESRD beneficiaries and people who get benefits due to ALS. 6

7 Medicare Parts A, B and D Part A is provided as soon as the MQP ends it is free, but not optional. Parts B and D are optional, but involve monthly premiums. A premium surcharge is assessed for individuals who sign up for Part B and/or D after they are first eligible (in most cases). Parts B and D can be dropped at any time, but this is generally NOT advantageous to the beneficiary unless private health insurance or Medicaid are available. 7

8 Part B Re-enrollment Eligible individuals can re-enroll for Part B during the special enrollment period (SEP) Part B premium surcharge will not be assessed under the following circumstances: The beneficiary s or spouse s employment ends; The beneficiary s or spouse s insurance becomes secondary to Medicare; or, The insurance coverage terminates Part B premium surcharge never applies to people who are eligible for QMB/SLMB 8

9 Verifying Medicare Coverage The BPQY only shows Part A and B enrollment. Part D must be verified by calling Medicare or going to Verify Medicare Savings Programs (MSPs) with the State Medicaid Agency the BPQY does not show the type of MSP coverage (QMB, SLMB, QI). Verify Part D Low income subsidy (LIS) with SSA, through the toll free Medicare line, or at 9

10 Medicare Savings Programs States provide special limited Medicaid coverage mandated and regulated by the federal government to help pay for out-of-pocket expenses associated with Medicare. Must have little income and few resources Coverage ONLY pays for all or part of the Medicare premiums, deductibles and coinsurance Must apply for these programs at the State Medicaid agency These programs do NOT pay for services or items that Medicare Part A and B would not ordinarily cover. 10

11 Medicare Savings Programs To qualify for one of the Medicare Savings Programs: Must have Part A (hospital insurance), A limited income, and Countable resources not more than $7,080 if single and $10,620 for a couple in There are numerous eligibility categories: Qualified Medicare Beneficiary (QMB) (income up to 100 % FPL) Special Low-Income Medicare Beneficiary (SLMB) (income up to 120% FPL) Qualified Individuals (QI) (income up to 135% FPL) 11

12 MSPs and Employment States generally use the SSI income formula to determine eligibility for MSPs (they may be more generous, but they cannot be more strict). In most states, as long as Medicaid eligibility is retained under some category, MSP coverage is retained. Don t assume this is the case in your state check! 12

13 Example of MSP with Employment Jamie receives $856 a month in CDB and is having Part B premiums paid by QMB coverage. She has just gotten a job offer which would pay an average of $1,200 a month. There is no indication of subsidy or IRWEs. What will happen to her QMB coverage? 13

14 Calculations Unearned Income General Income Excl Countable Unearned Gross Earned Income Earned Income Excl Remainder Divide by Countable Unearned Countable Earned Total Countable $ $1, x 12 = $16,842 Jamie s annual income will be more than 100% of the FPL for a household of one ($11,490). Jamie is not eligible for SLMB either since her income is also over 120% FPL ($13,788). Jamie will need to begin paying her Part B premium. 14

15 Medicare Part D Available to those enrolled in Part A, Part B or both. Coverage provided by private health insurance companies. Part D involves monthly premiums, deductibles and co-pays. Not all drugs may be covered depending on the plan. Part D does not cover any costs incurred when the beneficiary s prescription drug expenses are in the donuthole. After beneficiaries reach an "initial limit" of total drug expenses ($2,970 in 2013), Part D coverage ends until they reach the "catastrophic limit" for the year by spending $4,750 for medications. 15

16 Changes to the Donut Hole Due to passage of the Affordable Care Act, the donut hole will be closed in In the meantime, beneficiaries who do not qualify for the low-income subsidy receive a discount on name-brand and generic drugs. These discounts are increasing annually until the hole closes. Beneficiaries can get more information from their local pharmacy. 16

17 Eligibility for the Part D Low Income Subsidy (LIS) Medicare beneficiaries: Who are enrolled in a Part D plan, Who have filed an application for LIS (aka extra help ), Have countable income less than 150% of the FPL for his/her family size, and Have resources within the annual limits. 17

18 Resource Limits for LIS in 2013 The two resource limits for an individual are $7,080 and $11,800. The two resource limits for a married couple are $10,620 and $23,580. If countable resources are under the lower figure, eligibility for full LIS may be established. If between the two figures, then eligibility for partial LIS may be established. No eligibility is provided to those with countable resources over the higher figure. 18

19 Persons Deemed Eligible for LIS Certain beneficiaries are automatically deemed subsidy-eligible and should not complete an application for Extra Help. These beneficiaries have Medicare Parts A or B, or both, and are: Eligible for full Medicaid coverage, or Covered under one of the Medicare Savings Programs as a QMB, SLMB, or Qualified Individual (QI). NOTE: Qualified Disabled Working Individuals (QDWI) are not deemed eligible for Extra Help 19

20 Countable Income is: Levels of LIS The amount of an individual s premium subsidy is determined by the relationship of his/her income (and spouse) to the appropriate FPL. Less than or equal to 135% of FPL 100% Greater than 135% of FPL, but not more than 140% Greater than 140% FPL, but not more than 145% Greater than 145% FPL, but not more than 150% Premium Subsidy 75% 50% 25% 150% FPL or more None 20

21 Recent Changes to Extra Help Rules Beginning January 1, 2010, Social Security will no longer count as a resource any life insurance policy; and Social Security will no longer count as income the help beneficiaries receive regularly from someone else to pay their household expenses food, mortgage, rent, heating fuel or gas, electricity, water, and property taxes (ISM). In addition, beginning January 1, 2010, Social Security will now notify the state when beneficiaries apply for Extra Help and the state will contact beneficiaries to help them apply for a Medicare Savings Program. 21

22 LIS Determinations Subsidy determinations are made for a calendar year and will not be changed unless the beneficiary: Appeals the determination; Reports a subsidy changing event; or Becomes eligible for SSI, Medicaid or the Medicare Savings Program (QMB, SLIMB, QI1) and is therefore deemed eligible. There are two types of events that can impact the subsidy determination or amount: Subsidy Changing Events effective the month after the month of report Other Events effective the January following the report 22

23 Subsidy Changing Events (SCE) Beneficiary marries Beneficiary and living-with spouse divorce Beneficiary s living-with spouse dies Beneficiary and living-with spouse separate Beneficiary and living-with spouse annul marriage Beneficiary and living-with spouse resume living together *NOTE: Beneficiary has 90 days to submit the redetermination notice to Social Security following the report of the SCE. If it is not returned within the 90 days, the subsidy will be terminated. 23

24 Other Events Any events other than the six previously listed Subsidy Changing Events (e.g. changes in employment) Changes are effective the following January. Once reported, the beneficiary will be sent a redetermination form. He/she has 30 days to return the form, or the subsidy will be terminated the following January. 24

25 Individuals Who are Deemed Eligible Individuals who are deemed eligible maintain that deemed status through the calendar year even if they lose eligibility for the program on which their deemed status is based. If they lose deemed status because they are now ineligible for SSI, Medicaid or MSP, they can file an application to potentially be eligible the following year. 25

26 Impact of Employment SSI calculations are used when determining LIS eligibility and amounts. Disregards include: Federal income tax refunds The first $30 per calendar quarter of earned income received infrequently or irregularly Any portion of the $20/month general income exclusion not already excluded from unearned income $65/month of earned income IRWE One half of remaining income BWE if Title II DIB is based on blindness 26

27 Determination of IRWE Individual must be receiving Title II disability benefits not based on blindness and must be under age 65. It is assumed that the value of any alleged IRWE is equal to 16.3% of the total earned income. Actual IRWE expenses higher than the 16.3% can be used if it would favorably affect the subsidy eligibility or amount. The 16.3% exclusion also applies to the earnings of the spouse if the spouse receives Title II disability benefits (not blind) and is under age

28 Determination of BWE Beneficiary must be receiving Title II disability benefits based on blindness and be under age 65. It is assumed that the value of alleged BWE is 25% of total earned income. Actual BWE expenses higher than the 25% can be used if it would favorably affect the subsidy eligibility or amount. The 25% exclusion also applies to the earnings of the spouse if the spouse receives Title II disability benefits based on blindness and is under age

29 Critical Touch Points for LIS Changes in earned or unearned income (beneficiary and/or spouse) Changes in resources (beneficiary and/or spouse) Changes in family size IRWE or BWE Concurrent beneficiary s movement into 1619(b) End of the TWP and earnings over SGA in the Loss of eligibility for other programs (SSI, Medicaid or MSP) 29

30 Example Scenario Kathy lives alone and receives SSDI in the amount of $825 per month. She also has QMB coverage and currently receives the full subsidy. She is completing her training program in January and is expecting to begin a job as a medical transcriptionist on February 1, She will be earning $2065 gross per month. Kathy will need to drive her modified vehicle to and from work daily. Her actual IRWE expense is expected to be about $150/month. She has not yet used any of her TWP months. Will her anticipated work impact her LIS? 30

31 Calculations Unearned Income General Income Excl Countable Unearned Gross Earned Income Earned Income Excl Remainder IRWE (16.3% of $2065) Remainder Divide by Countable Unearned Countable Earned Total Countable $ $1, x 12 = $19, Kathy s annual income will be more than 150% of the FPL for a household of one ($17,235). Her LIS will terminate in January 2014 based on her report of an other event after her first month of employment. 31

32 Calculation Situation Changes Unearned Income 0.00 Gross Earned Income General Income Excl Remainder Earned Income Exclusion Remainder IRWE (16.3% of $2065) Remainder Divide by 2 = Countable Unearned 0.00 Countable Earned Total Countable $ When she completes her TWP in October 2013, she will likely use cessation and grace months the first 3 months of her, and her DI check will be suspended beginning February In February, her countable income for determining subsidy eligibility will be $ She can re-apply for the LIS since she will be below the 100% FPL. 32

33 Eligibility for the EPMC Individual must currently have Medicare coverage based on disability benefits, Benefits must have been ceased due to SGA, and The individual must still be medically disabled per Social Security s definition. 33

34 New Rules Effective 11/23/2004 If an individual s entitlement to disability benefits ends because he or she engaged in, or demonstrated the ability to engage in, substantial gainful activity after the 36 months following the end of the trial work period, Medicare entitlement continues until the earlier of the following: The last day of the 78 th month following the first month of SGA occurring after the 15 th month of the individual s reentitlement period, or if later, The end of the month following the month the individual s disability benefit entitlement ends. Centers for Medicare & Medicaid Services 42 CFR, Part 406, Federal Register: September 24, 2004 (Volume 69, Number 185, Pages

35 Key Points Regular Medicare continues as long as the beneficiary remains entitled to Title II disability payments. EPMC never begins until the beneficiary has performed SGA. If SGA is within the first 15 months of the, Medicare ends 78 months after the first month of SGA that occurs AFTER the 15 th month of the (see example chart, next slide). 35

36 Example SGA within First 15 Months Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TWP 1 TWP 2 TWP 3 TWP 4 TWP 5 TWP 6 TWP 7 TWP 8 TWP 9 cess. grace grace #15 EPM begin ends Term EPM end 36

37 Key Points - continued Beneficiary initially engages in SGA sometime AFTER the 15 th month of the, Medicare will end 78 months after benefits payment cease due to SGA (after the cessation and grace period). See chart example next slide. Medicare will never end before the benefit termination month. 37

38 Example SGA after First 15 Months Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TWP 1 TWP 2 TWP 3 TWP 4 TWP 5 TWP 6 TWP 7 TWP 8 TWP 9 <SGA <SGA <SGA <SGA <SGA <SGA <SGA work ends #15 ends cess. grace grace Term EPMC EPMC term 38

39 Extended Medicare and EXR Failure to meet the medical definition of disability will cause loss of EPMC. Creates potential risk for those requesting EXR. Medical Improvement Review Standard (MIRS) applies to CDRs and EXR. If medical improvement is determined, eligibility for EPMC stops. 39

40 Medicare Premiums during the EPMC Medicare Part A (hospital insurance) continues for free. Medicare Part B (medical insurance) requires a monthly premium. Premiums will be billed quarterly (in advance) when no cash payments are due (unless subsidized). If premiums are not paid Part B will stop Part B may be voluntarily stopped at any time. Re-enrollment in Part B during the EPMC may subject the beneficiary to the Part B premium surcharge (some exceptions). Part D may also continue during the EPMC as long as premiums are paid. 40

41 EPMC Responsibilities If EPMC has begun, the new BPQY shows the end date. You can identify the end date if TWP and cessation month/grace period are over. Remind beneficiaries that they will have at least 93 months of continued Medicare after the completion of the TWP. Questions you will not be able to answer: Will the person again be entitled to benefits? Will there be a decision of medical improvement? Will the individual continue working as expected? 41

42 Medicare for the Working Disabled When the EPMC ends, it is possible to purchase Part A, Part B, and Part D. One cannot purchase Part B and D without purchasing Part A. Part A can be purchased without Part B or Part D. Premium amounts change annually, and can be found at Part A premiums can be reduced by 45% if the person has at least 7 ½ years of work covered under Social Security taxes. Those with limited income and resources may receive premium assistance under the QDWI provision. Family countable income under 200% FPL and resources under $4,000 for individual or $6000 for couple. 42

43 Medicare Resources Medicare & You f/10050.pdf State Health Insurance Counseling and Assistance Programs (SHIPs) ships.aspx ESRD Medicare f/esrdcoverage.pdf 43

44 Final Words Counseling on Medicare issues is not just an extra service for when you have time it is an essential area to cover. EPMC is important, but it is not the only thing you need to know about. Remember the programs that help pay premiums they are affected by work and you are expected to provide specific counseling on them. 44