R99-108 AUTHORIZING APPLICATIONS

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including the size of the employers sponsoring the GHP. In general, Medicare pays second- � ary to the following: a. GHPs that cover individuals with end-stage renal disease ("ESRD")during the first 30 months of Medicare eligibility or entitlement.This is the case regardless of the number of employees employed by the employer or whether the individual has "current em- ployment status." b. In the case of individuals age 65 or over, GHPs of employers that employ 20 or more employees if that individual or the individual's spouse (of any age) has "current em- ployment status."If the GHP is a multi-employer or multiple employer plan, which has at least one participating employerthat employs 20 or more employees,the MSP rules apply even with respect to employers of fewer than 20 employees (unless the plan elects the small employer exception under the statute). c. In the case of disabled individuals under age 65, GHPs of employers that employ 100 or more employees, if the individual or a member of the individual's family has"current employee status."If the GHP is a multi-employer or multiple employer plan,which has at least one participating employer that employs 100 or more employees, the MSP rules apply even with respect to employers of fewer than 100 employees. The rules for calculating the size of the employer are complicated, and vary depending on numerous factors. In determining whether the size threshold has been met in any given case, the MSP statute and regulations must be consulted. Application of the statute depends not only on the size of the employer but also, in certain cases, on whether the coverage provided under the GHP is based on"current employment status," as defined in the MSP statute and regulations. • 2. The Non-Discrimination Provisions: Age and Disability: The MSP statute prohibits GHPs from"take[ing] into account"that an individual covered by virtue of"current employment status" is entitled to receive Medicare benefits as a result of age or disability. The statute expressly requires GHPs to furnish to aged employees and spouses the same benefits, under the same conditions,that they furnish to employees and spouses under age 65. Thus, GHPs may not offer coverage that is secondary to Medicare under a provision that"carves out" Medicare coverage (commonly known as a"carve-out" policy),or which supplements the available Medicare coverage (commonly known as"Medi- care supplemental" or"Medigap" policies}, to individuals covered by the provisions of the MSP statute relating to the working aged and the disabled. By contrast,"Medigap"and sec- ondary health care coverage may appropriately be offered to retirees in this context because the GHP coverage is not based on "current employment status," and thus the MSP provi- sions do not apply. 3. ESRD: The MSP statute also prohibits a GHP from taking into account that an individual is entitled to Medicare benefits as a result of ESRD during a coordination period specified in the stat- ute. This coordination period begins with the first month the individual becomes eligible for or entitled to Medicare based on ESRD and ends 18 months later. During this period, the GHP must pay primary for all covered health care items or services, while Medicare serves as the secondary payer.GHPS are prohibited from offering secondary(i.e.,"carve-out") and "Medigap" coverage in this context. 4. Employer Obligations: • It is the obligation of the Employer to ensure that Covered Persons covered by the MSP stat- ute are not improperly enrolled in"carve-out"or"Medigap"coverage under this Agreement. - 12 -