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Laws Related to Working Aged Beneficiaries Tax Equity and Fiscal Responsibility Act (TEFRA) – 1983 The TEFRA legislation, enacted on January 1, 1983, prohibits employers who employ 20 or more employees from offering lesser health insurance benefits to employees and their spouses, ages 65 to 69, than those benefits offered to younger employees. The law specifies 20 or more employees (not 20 or more employees enrolled in group health coverage). The 20 or more employees threshold is met when an employer has 20 or more full or part-time employees for each working day in 20 or more calendar weeks in the current calendar year or the preceding calendar year. The 20 weeks do NOT have to be consecutive. The intent of the law is to encourage beneficiaries to choose the GHP as the primary insurer. This saves taxpayer (Medicare) dollars. Key Points: The employer must offer their insurance as primary. The employee and/or spouse may choose Medicare as primary. If Medicare is chosen as primary for the beneficiary, then the beneficiary must be dropped from the GHP and can have no GHP coverage. The beneficiary may select a supplemental policy; however, the employer CANNOT make any payment for the policy. Deficit Reduction Act (DEFRA) – 1985 The DEFRA legislation enacted on January 1, 1985, extended coverage by a GHP by eliminating the age restriction for the employee. The employee, the working spouse of the beneficiary, can be any age. The age restrictions for the spouse of the employee, the beneficiary, are the same as the TEFRA legislation, age 65 through 69. Key Points: The spouse (beneficiary) has the same coverage choices as with the TEFRA legislation. The “20 or more employees” is the same as TEFRA. The intention of this legislation is to expand the number of beneficiaries covered by a GHP based on the employment of the younger spouse. Consolidated Omnibus Budget Reconciliation Act (COBRA) – 1986 The COBRA legislation, enacted on May 1, 1986, further extended coverage by a GHP by eliminating the “over age 69” clause. An employer who employs “20 or more employees” is prohibited from offering less health insurance benefits to employees and their spouses over age 69, than the benefits offered to younger employees. Key Points: The employee and spouse have the same coverage choices as in the TEFRA and DEFRA legislation. The “20 or more employees” threshold is the same as TEFRA and DEFRA. The intention of this legislation is to expand the number of beneficiaries covered by a GHP based on the employment of an older beneficiary or spouse. Additional information on COBRA can also be found on the CMS Website at: http://cms.hhs.gov/hipaa/hipaa1/cobra/default.asp