Group Health vs MA plan

[Guest]

Hey gang,

Need some advice. A friend of mine who is in the medicare business suggested that when I am prospecting businesses for group health to ask the owner or HR person if they have anyone 65 or over and if they do--to tell the owner and the employee that they could come off the group health plan into a MA plan and save money for both. Another friend of mine in the business said she would not feel comfortable doing that because if they have special needs (diabetes, kidney problems) it could screw up their treatment and what they are covered for.

What do you all think?

 

[GreenSky]

Moving an employee eligible for Medicare to an MA or (better yet) a Med Supp makes a whole lot of sense. However...there are no PDP plans that are available without a donut hole. There is only one MAPD plan in Los Angeles County (an HMO) that covers drugs without a donut hole.

The employee needs to know the facts before moving off the group.

Advantage of Med Supp- Typically will cover 100% of Medicare share of cost. Including cost of Part B Medicare and PDP - about $225 per month. An MA plan can reduce this cost to about $100.

Disadvantage - Doctor must accept Medicare; Might have gap in Rx coverage; there may be network limitations for the MA plan.

If the disadvantages are not an issue, it can be a good idea.

Rick

 

[Dave020]

Correct me if I'm wrong, but isn't this scenario a prohibited practice?

 

[GreenSky]

Correct me if I'm wrong, but isn't this scenario a prohibited practice?

You know Dave, now that you mention it, this may very well be prohibited. But I don't recall if it applies to all groups or just groups over a certain size.

Since a person can have Medicare and still be working I am not sure how it REALLY can be prohibited. But CMS is rarely logical.

Perhaps someone will respond to this thread with documentation. I'm too lazy to look it up.

Rick

 

[Dave020]

I seem to recall we had this exact discussion somewhere on this board awhile back. As I recall, a member pointed out that moving anyone 65+ who is an active employee off of the group plan onto Medicare is either an ERISA violation or Medicare violation, not sure which.

Obviously this would apply at minimum to any group 20+ as those groups are federally recognized and Medicare is secondary to the group coverage plan. Groups 2-19, Medicare is primary so in that case there MAY be a difference, although I doubt it.

Also I recall from that thread that it is also illegal for an employer to move a 65+ onto Medicare in lieu of the group plan and provide ANY funding of the supplemental coverage for that employee.

 

[GreenSky]

I seem to recall we had this exact discussion somewhere on this board awhile back. As I recall, a member pointed out that moving anyone 65+ who is an active employee off of the group plan onto Medicare is either an ERISA violation or Medicare violation, not sure which.

Obviously this would apply at minimum to any group 20+ as those groups are federally recognized and Medicare is secondary to the group coverage plan. Groups 2-19, Medicare is primary so in that case there MAY be a difference, although I doubt it.

Also I recall from that thread that it is also illegal for an employer to move a 65+ onto Medicare in lieu of the group plan and provide ANY funding of the supplemental coverage for that employee.

Killjoy!

Rick

 

[NewHealthStrategies]

What are you talking about prohibited.... AETNA just rolled out their fully insured plan for this concept.... which is a great idea, since it effectively removes the retiree from the rank file for the traditional maj. med. plan and drives the price way down.

Be careful in self-funded plans in that it does NOT remove the FASB 106 requirements... but I have a feeling not many of you are in the self-funded world... so FYI.

It's not a huge market niche' but certainly one that you want to be aware of... just have a company rep with you when you encounter this situation and you'll look like a hero.

 

[Dave020]

What are you talking about prohibited.... AETNA just rolled out their fully insured plan for this concept.... which is a great idea, since it effectively removes the retiree from the rank file for the traditional maj. med. plan and drives the price way down.

Be careful in self-funded plans in that it does NOT remove the FASB 106 requirements... but I have a feeling not many of you are in the self-funded world... so FYI.

It's not a huge market niche' but certainly one that you want to be aware of... just have a company rep with you when you encounter this situation and you'll look like a hero.

Please read more carefully, OP was not talking about retirees, was talking about active employees over 65 still working for the employer. That is strictly prohibited.

 

[NewHealthStrategies]

Please read more carefully, OP was not talking about retirees, was talking about active employees over 65 still working for the employer. That is strictly prohibited.

Dave: Sorry.... but there is nothing prohibited about this at all!

If so, I'd love for you to contact Aetna and let them know about it!

They are simply opting for Medicare Advantage plans in lieu of the company plan, which may or may NOT be a better deal for them... in a lot of cases it is NOT better....

BUT YOU ARE CORRECT in that I'm mixed the FASB 106 liability concern in with the discussion, which deals with retiree liability... so thanks.... it's too damned late to be having these discussion.

Ciao

 

[Joe Insurance]

Agreed; some group plans automatically drop members when they're 65.