Working Aged

20.1 - Working Aged (Rev. 11755, Issued:12-21-22, Effective: 01-23-23, Implementation: 01-23-23) Pursuant to 1862(b)(1)(A) of the Social Security Act, Medicare benefits are secondary to benefits payable under GHPs for individuals age 65 or over who have Medicare Part A and who have GHP coverage as a result of either: • Their own current employment status with an employer that has 20 or more employees; or • The current employment status of a spouse of any age with an employer that has 20 or more employees. (Section 70.2 of this chapter and Pub. 100-05, Chapter 2 §10 further defines individuals subject to this limitation on payment.) NOTE: Effective January 1, 2015, for purposes of the working aged provisions, the definition of spouse was changed. Where, at any time, an employer, insurer, third party administrator, GHP, or other plan sponsor has a broader or more inclusive definition of spouse for the purposes of its GHP arrangement, it may (but is not required to) assume primary payment responsibility for the individual in question. If such an individual is reported as a spouse through Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) (P.L. 110-173) (MMSEA), Medicare will pay accordingly and pursue recovery, as applicable. Employers are required to offer to their employees who are age 65 or over, and to the age 65 or over spouses of employees of any age, the same coverage as they offer to employees and employees’ spouses under age 65, i.e., coverage that is primary to Medicare, regardless of entitlement to Medicare. This equal benefit rule applies to coverage offered to all employees (full-time and part-time). Medicare beneficiaries have the option to reject the employer plan coverage, in which case they retain Medicare as their primary coverage. Employers cannot offer such employees, or their spouses, secondary coverage for items and services covered by Medicare. Additionally, employers may not sponsor or contribute to individual Medigap or Medicare supplement policies for beneficiaries who have, or whose spouse has, current employment status. Further guidance pertaining to the MSP provisions for working aged individuals can be found in Pub. 100-05, Chapter 2, §10. Only employers with 20 or more employees are required to offer the same (primary) coverage to their age 65 or over employees and the age 65 or over spouses of employees of any age that they offer to younger employees and spouses. This requirement applies if an employer has 20 or more full-time and/or part time employees for each working day in each of 20 or more calendar weeks in the current or preceding year. Self-employed individuals who participate in an employer plan are not counted as employees in determining if the 20 or more employees requirement applies. Where an employer does not have 20 or more employees in the preceding year, he is required to offer his employees, and spouses age 65 or over, primary coverage when he has had 20 or more employees on each working day of 20 calendar weeks of the current year. The employer is then required to offer primary coverage for the remainder of that year and throughout the following year, even if the number of employees subsequently drops below 20. The "20 or more employees" requirement applies when the individual (employee) receives the services for which Medicare benefits are claimed. If at that time, the "20 or more employees" requirement in the current year or in the preceding calendar year applies, the GHP is primary payer. An employer for which this requirement applies must provide primary coverage even if less than 20 employees participate in the employer plan. The MSP provisions do not obligate employers to provide coverage to individuals, nor do they speak to the benefits provided under such coverage with the exception of ensuring that individuals eligible for or entitled to Medicare receive the same coverage as individuals who are not eligible for or entitled to Medicare. NOTE: Where, at any time, an employer, insurer, third party administrator, GHP, or other plan sponsor has a broader or more inclusive definition of “spouse” for the purposes of its GHP arrangement, it may (but is not required to) assume primary payment responsibility for the individual in question. If such an individual is reported as a spouse through MMSEA Section 111, Medicare will pay accordingly and pursue recovery, as applicable. The employer must also provide primary coverage to older such individuals even if there are no younger such individuals enrolled in the plan. See all parts under 42 CFR § 411.100. Where a GHP is the primary payer, but does not pay in full for the services, Medicare may pay secondary benefits to supplement the amount the GHP paid for the service if it is a Medicare covered service. If a GHP denies payment for services because they are not covered by the plan as a plan benefit available to all covered individuals, Medicare may pay primary benefits if the services are covered by Medicare. A GHP's decision to pay or deny a claim because the services are or are not medically necessary is not binding on Medicare. A/B Medicare Administrative Contractors (MACs) (Part A), A/B MACs (Part B), or A/B MACs (Part HHH) (collectively referred to as A/B MACs) and Durable Medical Equipment MACs (DME MACs) must evaluate claims under existing guidelines derived from the law and regulations to assure that services are covered by the program regardless of any employer plan involvement. A/B MACs and DME MACs assume, for the purpose of processing claims, that because of the requirement that GHPs be billed before Medicare, in the absence of evidence to the contrary, an employer in whose health plan a beneficiary is enrolled by nature of employment meets the definition of employer and employs at least 20 people. The A/B MACs and DME MACs refers an employer’s allegation that the 20-employee requirement does not apply to the MSP Contractor. A/B MACs and DME MACs must refer a multi-employer plan’s (a plan sponsored by or contributed to by two or more employers or employee organizations) statement identifying specific members as employees of employers of fewer than 20 employees, as a basis for making Medicare primary payer, to the MSP Contractor (see Pub. 100-05, Chapter 2 §10 for further instructions). NOTE: The request to exempt is done on a prospective basis.