By Pension and Benefits Editorial Staff
Several members of House Ways and Means Committee have sent a letter to Department of Health and Human Services (HHS) Secretary Alex Azar and Department of Labor (DOL) Secretary Eugene Scalia regarding challenges facing Americans who are Medicare-eligible and receive coverage under a group health plan subject to COBRA. These workers and retirees can experience unexpected penalties and unnecessary out-of-pocket expenses, the Representatives say.
“Many retirees are unexpectedly exposed to out-of-pocket liability for any costs paid under COBRA benefits on or after date of Medicare eligibility and penalties for late enrollment in Medicare,” the letter stated. “Some of this risk would be eliminated if COBRA notices addressed the interaction with Medicare, and vice versa. Unfortunately, such information is not required under either Medicare or COBRA, and thus, transparency and clear information about the interaction between the two is lacking.”
COBRA grants temporary continuation of coverage to those enrolled in group health plans when coverage would otherwise end upon the occurrence of a qualifying event, such as termination of employment other than by reason of gross misconduct. For Americans who are also Medicare-enrolled when coverage begins under COBRA, Medicare is the primary payer and plans subject to COBRA become secondary. However, for qualified COBRA beneficiaries who become Medicare-eligible but have yet to enroll in either Part A or Part B, group health plans can reevaluate any paid claims.
In addition to requesting the agencies provide a variety of information related to relevant existing law, the members called on HHS and DOL to develop a strategy that effectively addresses the issue and to produce informative and clear communications for affected Americans. “If COBRA and Medicare notices address the programs’ interactions, including the potential for financial liability, the number of Americans who are unaware of the steps they should take to avoid late enrollment penalties, delayed benefits, and unexpected out-of-pocket costs would be reduced,” the letter concluded.
The letter was signed by Ways and Means Chairman Richard E. Neal (D-Mass.), Energy and Commerce Chairman Frank Pallone, Jr. (D-N.J.), Education and Labor Chairman Bobby Scott (D-Va.), Ways and Means Ranking Member Kevin Brady (R-Tex.), Energy and Commerce Ranking Member Greg Walden (R-Ore.), and Education and Labor Ranking Member Virginia Foxx (R-N.C.).
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