Disability Benefits and Medicare
If you have employees who have been approved for Social Security disability benefits, it is possible they may also be awarded Medicare benefits. Additionally, the effective date of the Medicare benefits may be retroactive or for a future date. As long as the employee remains covered under the active group, there is no impact to the employee’s coverage, but if the employee moves to the Retirement Systems for extended short term or long term disability, or any other non-active group; Medicare immediately becomes primary and they are no longer eligible for enrollment in the Enhanced PPO Plan (80/20).
When Medicare is awarded due to disability, typically Medicare Part A and Medicare Part B are both awarded. It is important for members who are awarded Medicare benefits retroactively to accept the offer and to arrange to purchase Medicare retroactively. The details on how to do this will be furnished in the award letter they receive from the federal government.
Medicare consists of two parts:
Part A: Pays inpatient hospital bills and skilled nursing facility bills. Members are automatically enrolled and it is normally provided at no charge to those eligible for Medicare.
Part B: Pays outpatient hospital, doctor and other professional bills and requires a monthly payment from the person eligible for Medicare. Members must elect Part B coverage. Please note there is a monthly premium for Medicare Part B which is typically deducted from Social Security benefits.
Members enrolled under the Retirement Systems Group, or any other non-active group who are awarded Medicare benefits retroactively will be automatically enrolled into the Base PPO Plan (70/30) as of their Medicare eligibility date. Many members make the mistake of not accepting the offer to retroactively purchase Medicare Part B because their claims were already processed with the State Health Plan paying as primary. It is important to understand how State Health Plan benefits will coordinate with Medicare on the Base PPO Plan (70/30).
The State Health Plan will treat any claims submitted for services as if the member is enrolled for coverage under Medicare from the date of eligibility, regardless of whether the member has actually enrolled for such coverage.
Once the State Health Plan receives notice of a retroactive effective date under Medicare, claims will be reprocessed all the way back to the retroactive eligibility effective date under Medicare. This will reduce the members’ claims by the amount that would have been available to them under Medicare, paying the remaining claim amount under the terms of the health benefit plan. As a result, the member is responsible for the amount that would have been paid by Medicare Part B even if they do not enroll in Part B.
Although these members are now considered Medicare primary, they cannot be retroactively enrolled into one of the State Health Plan’s Group Medicare Advantage Plans. This is because of the enrollment notification requirements established for Medicare Advantage plans by the Centers for Medicare and Medicaid Services. Members will have the opportunity to enroll in a Medicare Advantage plan for the following benefit plan year during the next Annual Enrollment Period.
Please note: Medicare Part A and Medicare Part B are required if a member wishes to elect a Medicare Advantage plan for a future plan year.
For members in the Retirement Systems Group who are awarded Medicare benefits for a future effective date, they may be auto-enrolled into one of the Group Medicare Advantage Base plans. However, this will be dependent upon when the member notifies the State Health Plan of the Medicare effective date.
For more information on Medicare and disability, visit www.Medicare.gov.