Medicare Advantage Open Enrollment is happening now

Medicare beneficiaries and their agents likely took a deep breath on December 7 when the annual Medicare enrollment period ended.

October 15th through December 7th is when all Medicare beneficiaries can enroll in, switch to, or leave Medicare Part D prescription drug plans, switch to a Medicare Advantage plan, switch from a Medicare Advantage plan back to Original Medicare or switch from one Medicare. Plan advantage to another, with or without drug plan included

However, the open enrollment period for Medicare Advantage runs from January 1 to March 31 of each year. This period allows Medicare beneficiaries to make a switch, but only if they are currently enrolled in a Medicare Advantage plan. The allowed changes are:

Switch from one Medicare Advantage plan to another

Disenroll from a Medicare Advantage plan and return to Original Medicare

Switch to Original Medicare and join a separate Medicare prescription drug plan

The distinction is that the current period only applies to people who are currently enrolled in a Medicare Advantage plan. The changes will be effective on the first day of the month following receipt of the request.

If a person drops out of a Medicare Advantage plan within 12 months of joining the Medicare Advantage plan, it’s also possible to buy a Medigap or Medicare supplement plan without signing up. It is important to note that this is generally a one-time opportunity. If someone switches and returns to Original Medicare after the first 12 months, the insurance company may require the applicant to answer health questions in order to qualify for a supplement plan.

Medicare Advantage (Medicare Part C) plans have been getting a lot of publicity in our area. Like all advertising, the devil is in the details. The advertising of additional benefit cards does not make clear that these benefits are likely not available in our area. If you want to change plans, be sure to verify that benefits are available in your zip code area. Also, be sure to do a thorough review of available providers and confirm that they are taking new patients.

One never knows how good the plan is until the time comes to use it. Taking advantage of the plan in the first year is probably one of the best tests to see how the plan is working.

Employers who sponsor group health plans will also want to pay attention this time of year. Several calculations must be made to keep your plans in compliance.

What employers have to offer workers

To comply with the Affordable Care Act, an employer must determine whether its company is an applicable large employer and would therefore be subject to the mandate to provide qualifying employee benefits. The employer must average the size of its workforce over the 12 months of the previous calendar year. All full-time and full-time equivalent employees are included in the count. If the average is 50 or more, benefits must be provided for the following year.

The ACA defines a full-time employee as one who averages at least 30 hours per week or 130 hours per month. Full-time fractions are added and included.

Another important calculation is pool size for continuation of benefits under the Congressional Omnibus Budget Reconciliation Act (COBRA). This is the law that states that most laid off employees and their dependents are entitled to continued health benefits.

There are two types of COBRA benefits: federal and California state. Federal COBRA benefits must be offered by employers who employed at least 20 employees 50% or more of the typical workdays in the previous year. California employers who have employed fewer than 20 employees on 50% or more of the regular business days are subject to the Cal-COBRA laws for all of 2023.

For this calculation, full-time and part-time employees are counted, with part-time employees counted as a fraction of full-time and included in the total.

Once the determination is made, it applies for the entire calendar year. There are significant differences in administration and cost between federal benefits and Cal-COBRA. Federal administration of COBRA is an employer responsibility that may be outsourced to a provider. But the ultimate responsibility and penalties rest with the employer. The employee is not paid more than 102% of the employer’s active participation rate.

Cal-Cobra is administered by the insurer, making it easier for the employer. The employee charge is 110% of the active participant rate. If an employer owns multiple businesses, a tax professional should be consulted to determine the status of the groups under the controlled group rules of IRC Section 414.