Question
What is the name of your state? PA
I understand employers with 100 or more employees must continue to cover disabled employees as though they were still active under the employer group health plan.
Can someone help with the definition of disabled employee? Do you have reference for this definition?
Thanks
Answer
I can only guess that you're referring to COBRA legislation which requires employers to offer continuation of their group health plan to all employees who lose their eligibity for participation in the employer's plan, except those terminated for "gross misconduct."
Ex/Employees are eligible for up to 18 months of continuation by paying the full monthly premium (total cost, not just their prior premium deduction share) plus 2% for administration. Employees who were "disabled" at the time coverage ended are eligible for an additional 11 months of continuation at a cost of 150% of the premium for those months. The COBRA reg specifies that those who qualify for this must meet the Social Security Administration's definition of disabilty. The SSA must make the determination that the individual is disabled (as they define it) within 60 days of the "qualifying event" (the date they first lost coverage) and the employee must notify the employer within 60 days of the date that determination is made. Covered dependents are also eligible for the additional 11 months of continuation.
Answer
Well, we're trying to understand when Medicare becomes secondary when an employee becomes disabled. One of our manuals states that Medicare is secondary for a disabled employee. If a disabled employee must pay full premiums under COBRA following disability, why doesn't the employee have the right to cancel COBRA and be covered by medicare as the primary provider since this is likely cheaper.
Answer
pb64,
This is from the Dept. of Labor web site. As you can see, COBRA coverage may cancel if Medicare is susequently approved.
"Coverage begins on the date that coverage would otherwise have been lost by reason of a qualifying event and will end at the end of the maximum period. It may end earlier if:
1. Premiums are not paid on a timely basis
2. The employer ceases to maintain any group health plan
3. After the COBRA election, coverage is obtained with another employer group health plan that does not contain any exclusion or limitation with respect to any pre-existing condition of such beneficiary. However, if other group health coverage is obtained
prior to the COBRA election, COBRA coverage may not be discontinued, even if the other coverage continues after the COBRA election. After the COBRA election, a beneficiary becomes entitled to Medicare benefits. However, if Medicare is obtained prior to COBRA election, COBRA coverage may not be discontinued, even if the other coverage continues after the COBRA election."
Answer
pb 64:
Below is a link to the Medicare site, specifically a PDF booklet describing Medicare as secondary payer rules. The booklet is written for the consumer.
A important thing to consider is whether the disabled person is age 65 or over. This will determine whether Medicare or the large group health plan via COBRA will be primary payer. The information in the above post by CIAA describes when an employer plan may terminate COBRA continuation. However, there is no requirement for you as the plan participant to maintain COBRA continuation. Don't pay the premiums. But, before terminating your COBRA I would strongly encourage you to weigh the cost of the premiums to have dual coverage as opposed to the out-of-pocket expenses you might incur if you have only Medicare coverage. Once you terminate COBRA, you cannot reinstate it. Your employer plan will be only too happy to let Medicare pick up the tab.
lkc15507
Answer
pb64:
This just occurred to me. Since it isn't clear what the exact disability status of the person you desribe is, I want to add something. Medicare imposes a waiting period after a person has met their definition of disabled before actually being eligible to receive benefits. If the person you describe is in the waiting period or has not yet even been declared disabled as Beth3 describes, don't discontinue the COBRA coverage until the Medicare actually goes into effect (or the person can be covered by another plan such as a spouses group plan.)