A Primer for Employers on Medicare Coordination of Benefits
Oct 23, 2023
Primer for Employers on Medicare Coordination of Benefits

When a plan participant or beneficiary has Medicare and other health insurance, such as group health plan insurance, retiree coverage or Medicaid, there can often be confusion as to which insurance pays first on claims. Coordination of benefits (COB) rules, which are specified in plan documents or insurance policies, decide which insurance pays first. One plan is considered the primary payer that covers most expenses, while the secondary plan covers any remaining allowable expenses not covered by the primary plan. The COB allows health plans to provide health or prescription drug coverage to individuals receiving Medicare to determine their payment responsibilities. This helps ensure that the total amount paid by all insurance plans does not exceed the total costs of the health care expenses for Medicare-covered services and items.


This article provides a general overview of COB rules under Medicare.


How Does Medicare Work With Other Insurance?

There are many important facts to remember regarding how other insurance works with Medicare-covered services and items, such as the following:


  • The primary payer pays first and up to its coverage limits.
  • The secondary payer only pays if there are costs the primary payer doesn’t cover.
  • The secondary payer, which may be Medicare in certain situations, might not pay all the uncovered costs from the primary payer.
  • If a group health plan or retiree coverage is the secondary payer, the individual may need to enroll in Medicare Part B before that insurance would pay.


If a Medicare-covered individual’s other health insurance is the primary payer and fails to promptly pay a claim, typically within 120 days, that individual’s doctor or service provider may bill Medicare. Medicare can make a conditional payment for the individual’s claim, recovering any payments the primary payer should have paid at a later date.


What’s a Conditional Payment?

A conditional payment is a payment Medicare makes for services for which another payer may be responsible. Medicare makes this payment, so the plan participant or beneficiary won’t have to pay the claim. The payment is conditional because it must be repaid to Medicare if the Medicare-covered individual receives a settlement, judgment, award or other payment later.


Who Pays First?

When an individual has Medicare and other insurance, there are rules for whether Medicare or the other insurance is the primary payer for Medicare-covered services and items.


Medicare is typically the primary payer for Medicare-covered services and items in the following circumstances:


  • An individual is covered by only Medicare and Medicaid.
  • An individual covered by Medicare refuses group health coverage.
  • Medical services or supplies are not covered under a group health plan but are covered under Medicare.
  • A Medicare-covered individual is covered by a group health plan but has exhausted their coverage under the group health plan.
  • A Medicare-covered individual is 65 or older and covered by a group health plan (because the individual or their spouse is still working) offered by an employer with fewer than 20 employees.
  • A Medicare-covered individual is 65 or older and covered by an employer group health plan after retirement.
  • A Medicare-covered individual is 65 or older (or disabled) and covered by Medicare and the Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage.
  • A Medicare-covered individual is disabled and covered by a large group health plan offered by an employer with fewer than 100 employees.
  • A Medicare-covered individual has end-stage renal disease and is enrolled in a group health plan or COBRA (after 30 months of eligibility or entitlement to Medicare).
  • A Medicare-covered individual has only Medicare and TRICARE coverage unless the individual is on active duty and receives services and items from a military hospital, clinic or other federal health care provider.


For a complete list of situations where Medicare is the primary payer, visit Medicare.gov or review the Centers for Medicare and Medicaid Services’ guide, Medicare & Other Health Benefits: Your Guide to Who Pays First.


How Does Medicare Know if an Individual Has Other Coverage?

COB permits an individual’s Medicare eligibility information to be shared with other payers and sends Medicare-paid claims to secondary payers for payment. The Benefits Coordination and Recovery Center (BCRC) does the following on Medicare’s behalf:


  • Collect and manage information on other types of coverage an individual with Medicare may have.
  • Determine whether an individual’s other coverage pays before or after Medicare.
  • Pursue repayment when Medicare makes a conditional payment.


Medicare doesn’t automatically know if a Medicare-covered individual has other health insurance; however, insurers are required to notify Medicare when they’re responsible for paying first for Medicare-covered services and items. In some instances, the individual’s health care provider, employer or insurer may ask them about their current coverage so they can report that information to Medicare. Additionally, insurers must report coverage changes to Medicare.


Summary

Understanding COB rules is vital to ensuring that a Medicare-covered individual’s claims are paid correctly. While COB rules can be complex, they can help Medicare plan participants and beneficiaries make the best use of their health care coverage.


For more health care resources, contact Simco today.

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DOL Issues Guidance on AI-related Wage and Hour Risks

11 May, 2024
On April 29, 2024, the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) published Field Assistance Bulletin (FAB) No. 2024-1 on the use of artificial intelligence (AI) in the workplace. The FAB follows a statement released by the White House announcing key AI-related actions following President Joe Biden’s executive order issued on Oct. 30, 2023, on establishing standards for AI safety and security. Guidance on AI-related Wage and Hour Risks Employers are increasingly using AI tools to generate timecards, set schedules, monitor performance, track employee hours and process payroll. As such, the FAB highlights certain compliance risks under the Fair Labor Standards Act (FLSA) for employers using these tools. These risks include: Tracking employee work time; Monitoring employee break and waiting time; Using location-based monitoring for individuals performing work at multiple geographic locations; Calculating employees’ regular rate of pay and overtime compensation; and Violating the FLSA’s antiretaliation provisions To aid employers in addressing these compliance risks, the WHD identifies recommended practices, including exercising proper human oversight, to help ensure that AI systems and tools do not violate the FLSA. Additional AI-related Guidance In addition to addressing FLSA compliance risks, the FAB also examines certain AI-related risks that may arise under other laws, including the Family and Medical Leave Act (FMLA), the Providing Urgent Protections for Nursing Mothers Act (PUMP Act) and the Employee Polygraph Protection Act (EPPA). For example, using AI tools to administer FMLA leave can create potential risks for violating the law’s certification requirements when determining whether an employee’s leave is FMLA-qualifying. Employer Action Items While FABs are not necessarily legally binding, they offer insight into how the DOL interprets laws it enforces and how agency officers will analyze workplace conditions and circumstances to enforce compliance.  Using AI systems for scheduling, timekeeping and calculating rates of pay and overtime may increase an employer’s risk under the FLSA. Therefore, employers should ensure that their AI systems and tools comply with all federal laws and regulations by examining potential legal and business risks associated with AI, implementing AI usage policies and establishing internal best practices.

Nurturing Your Mind: Embracing Mental Health Awareness Month

30 Apr, 2024
As we step into May, we're reminded of the importance of mental health and well-being. May marks Mental Health Awareness Month, offering us an opportunity to renew our commitment to nurturing our minds and fostering supportive environments, both in and out of the workplace. In this blog post, we'll explore practical strategies for enhancing mental health, including small tips that can refresh you mentally during the workday. Embracing Self-Care Amid life's hustle and bustle, it's crucial to carve out time for self-care. Whether it's practicing mindfulness, engaging in hobbies, or simply taking a moment to breathe deeply, prioritizing self-care nurtures mental resilience and fosters a sense of inner peace. Cultivating Work-Life Balance In today's fast-paced world, achieving a healthy work-life balance is essential for mental well-being. Set boundaries between work and personal life, establish a routine that includes breaks and leisure activities, and strive to unplug from technology during downtime. Remember, balance is key to sustaining productivity and happiness. Fostering a Supportive Workplace Culture Employers play a pivotal role in promoting mental health in the workplace. Encourage open dialogue about mental health, offer resources such as counseling services or mental health days, and prioritize flexibility to accommodate employees' well-being needs. By fostering a supportive culture, organizations cultivate environments where employees feel valued, understood, and empowered to prioritize their mental health. Supporting Loved Ones If someone you care about is struggling with mental health challenges, your support can make a significant difference. Listen without judgment, offer empathy and reassurance, and encourage them to seek professional help if needed. Remember, your presence and understanding can provide comfort and strength during difficult times. Practicing Gratitude Gratitude is a powerful tool for enhancing mental well-being. Take time each day to reflect on moments of gratitude, whether it's appreciating the beauty of nature, expressing gratitude for supportive relationships, or acknowledging personal achievements. Cultivating a mindset of gratitude fosters resilience and enhances overall happiness. Small Tips to Refresh Your Mind During the Workday  Take short breaks: Step away from your desk for a few minutes to stretch, walk around, or simply gaze out the window. These brief pauses can rejuvenate your mind and boost productivity. Practice deep breathing: Incorporate deep breathing exercises into your day to reduce stress and promote relaxation. Close your eyes, inhale deeply through your nose, hold for a few seconds, and exhale slowly through your mouth. Connect with nature: Spend time outdoors during your lunch break or coffee breaks. Even a brief stroll in a nearby park or green space can invigorate your senses and clear your mind. Listen to music: Create a playlist of soothing music or uplifting tunes to listen to during work breaks. Music has the power to uplift your mood, reduce anxiety, and enhance focus. Stay hydrated: Drink plenty of water throughout the day to stay hydrated and maintain mental alertness. Dehydration can impair cognitive function, so keep a water bottle handy and sip regularly. Practice mindfulness: Take a few moments to practice mindfulness or meditation exercises. Focus on your breath, observe your thoughts without judgment, and cultivate a sense of presence and calm. Declutter your workspace: A clutter-free workspace can promote mental clarity and productivity. Take a few minutes to tidy up your desk, organize files, and create a calming environment conducive to focus. Engage in positive self-talk: Replace negative self-talk with affirming and encouraging statements. Remind yourself of your strengths, accomplishments, and capabilities, and cultivate a mindset of self-compassion and resilience. Connect with colleagues: Build supportive relationships with coworkers by engaging in meaningful conversations, sharing experiences, and offering mutual support. A sense of camaraderie and connection can foster a positive work environment and bolster mental well-being. As Mental Health Awareness Month unfolds, let's commit to nurturing our minds and supporting those around us. By embracing self-care, fostering work-life balance, promoting workplace well-being, and offering compassionate support to loved ones, we contribute to a culture of mental health awareness and resilience. Remember, you are not alone. Reach out for support if you need it, and let's journey toward better mental health together.

DOL Announces Final Overtime Rule Increasing Salary Levels for White-collar Employees

30 Apr, 2024
On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule to amend current requirements employees in white-collar occupations must satisfy to qualify for an overtime exemption under the Fair Labor Standards Act (FLSA). The final rule will take effect on July 1, 2024. Increased Salary Level The FLSA white-collar exemptions apply to individuals in executive, administrative, professional, and some outside sales and computer-related occupations. Some highly compensated employees may also qualify for the FLSA white-collar overtime exemption. To qualify for this exemption, white-collar employees must satisfy the standard salary level test, among other criteria. This salary level is a wage threshold that white-collar employees must receive to qualify for the exemption. Starting July 1, 2024, the DOL’s final rule increases the standard salary level from: $684 to $844 per week ($35,568 to $43,888 per year); and $107,432 to $132,964 per year for highly compensated employees. On Jan. 1, 2025, the standard salary level will then increase from: $844 to $1,128 per week ($43,888 to $58,656 per year); and $132,964 to $151,164 per year for highly compensated employees. Automatic Updates The DOL’s final rule also includes mechanisms allowing the agency to automatically update the white-collar salary level thresholds without having to rely on the rulemaking process. Effective July 1, 2027, and every three years thereafter, the DOL will increase the standard salary level. The agency will apply up-to-date wage data to determine new salary levels. Impact on Employers The first salary level increase in July is expected to impact nearly 1 million workers, while the second increase in January is expected to affect approximately 3 million workers. Employers should become familiar with the final rule and evaluate what changes they may need to adopt to comply with the rule’s requirements. Legal challenges to the rule are anticipated, which may delay the final rule’s implementation.

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