Health and Welfare Summary Plan Description
4.5 Medicare
- Overview. Medicare is the health insurance program for people age 65 or older, certain people with disabilities who are under age 65, and individuals with permanent kidney failure. Medicare Part A is hospital insurance, Medicare Part B is insurance for physician services, out-patient care, durable medical equipment, home health services and other medical services, Medicare Part C is a private insurance program called Medicare Advantage (which generally allows HMOs to cover Medicare-eligible individuals at a lower cost to the HMO), and Medicare Part D is insurance for pharmacy benefits. Medicare Part A is primarily financed by payroll taxes, while Parts B, C and D are financed primarily by premiums paid by those who choose to enroll. For enrollment and eligibility information, call Social Security at (800) 772-1213 and check the Internet at medicare.gov. Generally, if you are receiving Active Coverage, you are not required to enroll in Medicare in order to continue to participate in the Plan. If you are a Retiree and wish to continue to participate in the Plan, you must enroll in Medicare, as explained in subsection (b), and you may select any of the three benefit options described in Section 6.1.
- Retirees in Self –Funded Plan Must Enroll in Parts A and B. If you are a Medicare-eligible Retiree who is enrolled in the Self-Funded PPO, you must enroll in Medicare Parts A and B. The Plan will pay your medical claims on the assumption that you have full Medicare coverage under Parts A and B, regardless of whether you have actually enrolled for the full coverage. So, failing to enroll in Medicare Parts A and B will result in you having to pay substantially higher out-of-pocket costs for health care services. The same rule applies for your Medicare-eligible Dependent. Out-of-pocket charges resulting from failure to enroll in Medicare Parts A and B will not apply towards your maximum calendar year out-of-pocket limit under Section 8.5(d).
- Retirees in HMO Must Enroll in Part C. If you are a Medicare-eligible Retiree who is enrolled in the Kaiser HMO, you must enroll in your HMO's Medicare Part C program as soon as you are eligible. If you do not enroll, you will pay the difference between the regular (non-Part C) premium charged the Plan by the HMO over the significantly lower Part C premium that the Plan would have been charged by the HMO. Blue Shield does not have a comparable Part C Plan. If you are enrolled in the Blue Shield HMO at the time you become eligible for Medicare, you will be transferred to the Self-Funded PPO unless you choose to be enrolled in the Kaiser Senior Advantage Plan.
- Part D Prescription Drug Program – Retirees Should NOT Enroll. Medicare-eligible Retirees are eligible for a prescription drug program under Medicare Part D. However, Retirees covered under the Self-Funded PPO or an HMO are also covered under the Plan's separate prescription drug plan. The Plan's prescription drug benefit provides better coverage at less cost than the Medicare Part D program. As long as you are covered under the Plan's prescription drug plan, you are considered to have "creditable coverage," which means that, if at some later date you choose to enroll in Medicare Part D, you will not be charged a penalty for delayed enrollment. Therefore, you should NOT enroll in Medicare Part D. If you enroll in Medicare Part D outside of the Plan, you and your Dependents will immediately and automatically lose all major medical coverage under the Plan (i.e., either the Self-Funded PPO or one of the two HMOs), though your dental and vision supplemental coverage will not be affected. You will not be allowed to re-enroll in one of the Plan's medical programs until the next open enrollment period, and then only if you have terminated your Medicare Part D coverage. While the Plan advises you NOT to enroll in Medicare Part D, you still must enroll in both Medicare Parts A and B to receive full coverage in the Plan.