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Sorry NewHealth, but IT IS PROHIBITED and you are wrong! Here you go....
Can an employer in any way encourage active employees to elect out of employer sponsored coverage when they are eligible for Medicare?
No. The Medicare Secondary Payer statute prohibits a group health plan from "taking into account" the Medicare entitlement of a current employee or current employee or family member. Employers are prohibited from discouraging employees from enrolling in their group health plan or from offering "financial or other incentive for an individual entitled to Medicare" not to enroll (or to terminate enrollment) under a group health plan that would otherwise be a primary plan.
The above prohibition does not apply to employers with less than 20 employees for each working day in at least 20 weeks in either the current or the preceding calendar year.
Are there any penalties if an employer violates these Medicare Secondary Payer rules?
The federal government and Medicare recipients are authorized to recover double damages from group health care plans that treat Medicare as the primary payer in violation of the rules.
Violation of the financial incentives prohibition is subject to a civil money penalty of up to $5,000 for each violation.
Code Section 5000 also imposes an excise tax of 25 percent of expenses on all employers, other than certain governmental entities, or employee organizations whose group health care plans fail to comply with the Medicare Secondary Payer rules. Employers or employee organizations may appeal HCFA determinations of a failure to comply with Code Section 5000. The government has three years to collect health care payments that were wrongly paid by Medicare from the primary party.
Can an employee elect out of employer coverage on their own and elect Medicare?
There is nothing preventing an employee electing out of employer coverage on his or her own
Common Employer Questions Regarding Medicare
