R96-148 AUTHORIZING APPLICATIONS

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� rance. Nonetheless, if the Host Plan charges the Claim Administrator an access fee as discussed above relative to such Claim, the Claim Administrator shall pay such fee and such amount shall be considered and treated as a Claim Payment under this Agreement. XVI.MEDICARE SECONDARY PAYER ("MSP") PROVISIONS A. The MSP Law The Employer has certain obligations under the Medicare Secondary Payer ("MSP") statute. 1. Scope of the Statute: The statutory requirements and rules for MSP coverage vary depending on the basis for Medicare and employer group health plan("GHP")coverage,as well as certain other factors, including the size of the employers sponsorin� 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 18 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 employer that 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 �I 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. - 9 -