Medicare and COBRA

Eliant

I have an employee whose position was eliminated. This employee is 69 years of age. We offered him a severance package that included a lump sum financial package and continuation of health insurance through 10/31/03 (end of severance) on a reduced COBRA rate. Meaning he would continue to pay his portion of the health insurance and we would pay the remainder. Our health insurance is administered through a third party administrator. They are telling me that he is not eligible for COBRA because he is entitled to Medicare. The employee has never signed up for Medicare, however he did receive a card from Medicare that informed he was entitle to Medicare partB.

Can anyone shed some light on this. (My corporate office decided theconditions of the severance agreement)

Don D

Your TPA is correct to point out the employee's eligibility for Medicare Part B. That is now the ex-employee's primary coverage point. In fact, I wonder why your TPA did not call that to your attention four years ago when the ee turned 65. Or you may find that if you look back at claims records, you will see that they did indeed apply the medicare coverage to her claims.

njjel

Don - So when an employee hits 65, medicare automatially kicks in as primary and our company insurance becomes secondary and the indeed are not entitled to COBRA?

kwelzel

I'm also interested in this. We have a similar situation and I was told that we still have to offer COBRA. Medicare only pays for a certain portion of medical coverage, and with the COBRA continuation, she would be able to use that for what Medicare didn't cover. Medicare covers first, right?

Don D

Yes and Yes. We're self insured with Blue Cross as a TPA. Our Broker expert, who sits in the middle, advises me that 'the system' is set up to flag employees who turn 65 and therefore Medicare is automatically their primary and we are secondary. Also, she says the ex-ee is entitled to pick up Medicare Part B, not COBRA. Hope this helps (I also hope it is accurate. This is the kind of thing we pay her to stay on top of.)

Cap

My understanding is that when a ee is a current current employee (and dependents) covered under the company's plan then the company's plan is primary over Medicare. It depends on when the ee becomes 'entitled' not 'eligible' to Medicare benefits that determines if ee gets COBRA. great explanation at [url]www.benefitslink.com/cobra/topics/medicare.html[/url]

Don D

Are we talking semantics here? What's the difference in entitled and eligible in this overall context? Both trigger Medicare Part B as I understand it. Those in our employee who have turned 65, ee or eligible dependent, are designated as Medicare upon attaining that age.

Leslie

You all are lucky. Our insurance remains primary for employee and spouse through end of employment - no matter the age.

Theresa Gegen TX

And to comply with the Age Discrimination in Employment Act, the employer must give equal benefits (Or equal cost benefits) to employee's over 65.

In otherwords, they will still be covered, atleast by a supplemental plan while employed.

Good Luck!

Theresa Gegen TX

Thanks for that great link!!