Resource Center: Disability
Disability Benefits, Medicare and How It Impacts State Health Plan Coverage
The information below only applies if the Plan member is under the State Retirement Systems.
If you are a Plan member who has been approved for Social Security disability benefits, it is possible you may also be awarded Medicare benefits. Additionally, the effective date of the Medicare benefits may be retroactive or for a future date. Members who have been awarded Medicare benefits are considered Medicare primary and are no longer eligible for enrollment in the 80/20 Plan.
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 received from the federal government. It is important to carefully read the Notice of Award letter you receive from Social Security Administration.
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Medicare consists of two parts:
Part A: Covers inpatient hospital bills, skilled nursing facility care and Hospice care. Members are automatically enrolled when awarded due to a disability and it is normally provided at no charge. May be awarded for a current, future or retroactive effective date.
Part B: Covers outpatient hospital, doctor and other professional care. When awarded due to a disability, members are automatically enrolled for a current/future date. Please note there is a monthly premium for Medicare Part B which is typically deducted from Social Security benefits.
Members who are awarded Medicare benefits retroactively will be retroactively enrolled into the 70/30 Plan as of their Medicare eligibility date with Medicare becoming their primary coverage. Sometimes a member will 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 70/30 Plan.
The State Health Plan will treat any claim 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, all paid claims will be reprocessed all the way back to the retroactive eligibility effective date under Medicare and make Medicare primary – meaning claim payments will be recovered from providers. 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 70/30 Plan. As a result, providers will need to file claims with Medicare for payment and the member will be responsible for the amount that would have been paid by Medicare Part B if they do not enroll in Part B retroactively. Consequently, when there is an offer to have Medicare Part B effective date match Medicare Part A’s retroactive effective date, members are encouraged to pay the back premium to avoid the potential of having higher out-of-pocket costs.
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 Open 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 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.