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Effective: June 1, 2011 |
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15.10.05ar9 - Cost Effective Health Care Coverage - MA (Archive) |
Archived: September 1, 2012 |
Medical Assistance (MA) clients are required to maintain or enroll in other health care coverage if it is determined to be cost effective. Evaluate health care policies for MA clients for potential cost effectiveness at application, renewal, and any time a client reports access to other health care coverage. It is important to identify and maintain coverage primary to MA to save public funds.
More information on cost effective coverage can be found in the following sections:
l Determining Cost Effectiveness.
l Medicare Cost Effective Requirements.
l Cost Effective Premium Reimbursement.
What is Cost Effective Coverage?
Cooperation Requirements for Cost Effective Health Care Coverage.
Special Enrollment Period - CHIPRA.
When More than One Group Plan is Available.
Changes in Cost Effective Insurance.
What is Cost Effective Coverage?
Cost effective coverage is other health care coverage for which the amount paid for premiums, coinsurance, deductibles, and other costs is likely to be less than the amount paid by MA for an equivalent set of services. Cost effective coverage could include, but is not limited to, coverage through:
l COBRA.
l Individual health care coverage.
l Long-term care insurance.
l Medicare.
Cooperation Requirements for Cost Effective Health Care Coverage
Clients must cooperate in determining the cost effectiveness of any other individual or group health care coverage they have or any group health care coverage for which they may be eligible.
Cooperation includes:
l Providing information about the other health insurance. See Reporting Other Health Coverage.
l Enrolling or maintaining coverage in health insurance that is determined cost effective. See Accessing Other Health Care Coverage.
Allow applicants 10 days, or until the end of the processing period, whichever is longer, to provide information about other health care coverage. Approve eligibility for applicants who are cooperating with providing information on other health care coverage, even if they have not provided all the information by the end of the processing period.
Allow enrollees 10 days to provide information about other health care coverage. Do not close coverage if the time to provide the information has expired but the enrollee is cooperating.
In general, clients who are enrolled in cost effective individual or group health care coverage must maintain that coverage to be eligible for MA if the premiums are paid by the local agency or if there is no cost to the client.
l Clients who become eligible for cost effective group health care coverage must enroll in that coverage at the earliest possible date to be eligible for MA. This includes enrolling in group health care coverage during an open enrollment or special enrollment period.
l Adult MA enrollees who disenroll after notification of cost effective group health care coverage are ineligible for MA until the next open enrollment period for that group plan, unless:
n they are allowed to enroll due to a special enrollment period. They must re-enroll to reestablish MA eligibility.
n after disenrolling from cost effective coverage, the employer or insurer rules do not permit them to re-enroll. The person must provide written documentation of the date of the request for disenrollment (to determine if it occurred before or after notice of cooperation requirement) and inability to re-enroll to be eligible for MA.
l Do not deny or close eligibility for people who do not enroll or maintain enrollment in cost effective health plans if they cannot do so on their own behalf. Deny or close eligibility of an adult member of the household if, following notification of cost effective coverage, that person fails to enroll or maintain enrollment in cost effective health plans on their own behalf and on behalf of enrolled dependents.
Exceptions:
n Approve eligibility for children even if the parent is not cooperating. Do not close coverage for enrolled children even if the parent is not cooperating.
n Approve eligibility for spouses who cannot enroll in cost effective coverage on their own behalf if the other spouse is not cooperating. Do not close coverage for MA enrolled spouses who cannot enroll in cost effective coverage on their own behalf if the other spouse is not cooperating.
n Do not close coverage for individuals who fail to cooperate with enrolling their adult children ages 21 or older in coverage available through the individual’s employer or union plan.
n Pregnant women who are potentially eligible for CHIP-funded MA are not required to provide information about or pursue other health care coverage that may be available to them through an employer or other means. For more information on determining eligibility for pregnant women, see Medical Assistance (MA) for Pregnant Women.
Example:
Hannah and her two children submit a HCAPP. Hannah indicates on the HCAPP that she can get insurance through a current employer, but not her children. The family meets all MA eligibility requirements.
Action:
Approve MA eligibility for Hannah and her children because they are cooperating by providing information on other health insurance. Send Hannah the Cost Effective Insurance Referral - Employer or Insurance Company (DHS-2841).
Hannah signs the DHS-2841 and gives it to her employer. Her employer completes the form and returns it to DHS.
Action:
Determine the cost effectiveness of the health insurance. If the insurance is cost effective, Hannah must enroll.
Example:
Shelby and her child are MA enrollees. Shelby reports that she has a new job and that her new employer offers insurance.
Action:
Send Shelby the Cost Effective Insurance Referral - Employer or Insurance Company (DHS-2841). Give Shelby 10 days to return the form.
Shelby calls the day the form is due back and reports that she gave her employer the form, but he has not provided the information.
Action:
Shelby is cooperating. Allow Shelby 10 more days to return the form. Shelby remains open as long as she is cooperating.
Example:
The Roberts family returned their MA renewal. The entire family is over income and is eligible for TYMA. The family indicated on the renewal that they had a change in health insurance, but they did not provide any details.
Action:
Approve TYMA eligibility for the children in TYMA. Send the parents a request for information. Allow 10 days to return the information.
The parents never respond to the request for information.
Action:
Close the parents’ MA for failure to provide required information.
Example:
Mike and his daughter Lilly have other health care coverage. Lilly receives TEFRA. The other health care coverage is cost effective for her. Mike cancels the other health care coverage and applies for MinnesotaCare for himself.
Action:
Allow Lilly to retain her TEFRA eligibility. Although Mike canceled the cost effective coverage, Lilly cannot maintain enrollment in that coverage on her own behalf. Deny MinnesotaCare for Mike due to the four-month insurance barrier.
Example:
Jerome, his wife, Alana, and their son, Quade, are MA enrollees. Jerome switches jobs and his new employer offers health insurance that is cost effective for him and his family. Jerome does not enroll in the coverage after DHS informs him that it is cost effective, even though his employer would have allowed it.
Action:
Close MA for Jerome because Jerome did not enroll in the cost effective insurance for himself or his family. Do not cancel MA for Alana and Quade because they cannot enroll in the cost effective insurance on their own.
Example:
Don, his wife Sheri, and their daughter are enrolled in MA. Don has access to insurance through his employer and it is his open enrollment period. The insurance is cost effective for Don, but the dependent coverage is not cost effective for Sheri or their daughter. Don does not enroll in the coverage during the open enrollment period.
Action:
Close Don’s MA because he did not enroll in the cost effective insurance. Do not close MA for Sheri or their daughter because the insurance was not cost effective for them.
l Require applicants or enrollees who are eligible to continue group health care coverage through COBRA to cooperate with cost effective insurance requirements.
Example:
Angie recently lost her job and her employer provided health insurance. She applies for health care and is eligible for MA. She has access to COBRA, which is determined to be cost effective. However, Angie does not elect the COBRA.
Action:
Deny MA for Angie because she did not enroll in the cost effective COBRA coverage.
A few months later Angie re-applies for health care. The COBRA election period has passed and she can no longer enroll in COBRA.
Action:
Since Angie can no longer enroll in COBRA, she cannot be denied coverage for failure to cooperate.
l Contact the DHS Benefit Recovery Section (BRS) if the client indicates he or she is unable to use the cost effective coverage because there are no providers for that plan in the area.
Example:
Auggie’s dad provides his insurance. His dad lives in New Mexico and the employer or insurer only provides coverage in that state.
Action:
Contact BRS regarding Auggie’s policy. Continue his eligibility.
l Parents of adopted children, including children who receive automatic MA with adoption assistance, are required to cooperate with cost effective insurance requirements as a condition of eligibility. Do not delay, deny, or close eligibility for the adopted child if the parents fail to cooperate with cost effective insurance requirements.
Note: The Notice of Privacy Practices (DHS-4839C) contains information about other health insurance. Send this form to adoptive parents when automatic MA is approved for a child receiving adoption assistance.
Employers with group health care coverage must offer a special enrollment period for certain life events. During a special enrollment period, an employee has an opportunity to enroll in group health care coverage without waiting for an open enrollment period. Group health care coverage provides individuals with an opportunity for special enrollment if they:
l Initially declined group health care coverage because they had alternative coverage but since have lost that alternative coverage.
l Have new dependents through marriage, birth or adoption.
l Are covered by a Qualified Medical Support Order.
Note: Other life events such as marriage, divorce or a new job may result in the individual having the opportunity for special enrollment.
Clients with a change in health care coverage or a change in dependents must request a special enrollment period from the employer following program provisions. An employer may request a Certificate of Creditable Coverage (COCC) to verify eligibility for special enrollment.
Adult applicants who disenroll from or decline an offer of cost effective group health care coverage prior to their MA application may be eligible for MA.
l Require the client to contact the employer to inquire about a special enrollment period.
l Require the client to enroll in the cost effective plan if a special enrollment period is available.
l Continue eligibility and track for the next open enrollment period if a special enrollment period is not available. Require the client to enroll in the cost effective plan at that time.
Special Enrollment Period - CHIPRA
The Children’s Health Insurance Program Reauthorization Act (CHIPRA) added two conditions for which fully insured and self-insured group health plans must offer a special enrollment period. Effective April 1, 2009, a plan sponsor of a group health plan must permit employees and dependents who are eligible, but not enrolled for coverage to enroll in that coverage within 60 days of:
l termination of the employee or dependents’ MA coverage due to loss of eligibility.
l eligibility of the employee or dependent for a premium assistance under MA. (CHIPRA considers the cost effective health insurance program a premium assistance program.)
Do not deny or close MA eligibility if the client is cooperating but the employer or plan sponsor refuses to enroll them in the health plan. Refer uncooperative employers and plan sponsors to the DHS Benefit Recovery Section.
Example:
Helena applies for MA when she learns she is pregnant. On the application she indicates she has insurance through her employer. When Helena receives the Cost Effective Insurance Referral - Employer or Insurance Company (DHS-2841) she calls to say she canceled her health care coverage a few days earlier because it was too expensive.
Action:
Helena must cooperate with efforts to determine if the policy is cost effective and, if it is cost effective, re-enroll into her employer’s health insurance. Helena’s employer must allow her to re-enroll in the group insurance since she became eligible for cost effective reimbursement through MA. If she is cooperating, approve her MA. Do not close her MA if the employer is uncooperative. If necessary refer her employer or health plan administrator to the DHS Benefit Recovery Section.
When More than One Group Plan is Available
If an employer offers more than one health insurance plan to its employees, first determine cost effectiveness for the plan in which the client is currently enrolled. If the client is not currently enrolled in one of the health insurance plans, first determine cost effectiveness for the plan the client feels best fits his or her needs. An employee must select the plan that best fits their needs if an employer offers more than one health plan to its employees. Complete the cost effective review process for other health care coverage plan options available to the client if the first plan is not determined cost effective. Refer enrollees to their insurance products’ benefit administrators or human resources staff if they have questions about which plan would be best for them.
Example:
Sylvia, an MA enrollee, reports that she has a new job and her new employer offers a choice of health plans. She can either enroll in a High Deductible Health Plan (HDHP) with a Health Savings Account (HSA) or a lower deductible plan with a higher premium. Sylvia chooses the high deductible health plan.
Action:
Review the high deductible health plan for cost effectiveness (Sylvia must agree to use the HSA funds to reduce the deductible by signing DHS-2841 before the high deductible health plan can be evaluated for cost effectiveness. See Determining Cost Effectiveness for more information on HSAs.) If it is not cost effective, review the lower deductible plan for cost effectiveness. If the lower deductible plan is cost effective, Sylvia must enroll in that policy if she can.
Notify clients whose eligibility is ending that MA will no longer pay premiums on the cost effective policy. Use the appropriate MAXIS SPEC/LETR.
See TEMP manual TE02.13.48 (Cost Effective SPEC/LETR) for more information on using MAXIS SPEC LETR to notify clients of decisions on cost effective health insurance premium payments.
People whose MA ends will automatically receive a Certificate of Creditable Coverage (COCC) two months after closure. Request the COCC in MMIS if the former enrollee needs it sooner.
Changes in Cost Effective Insurance
Enrollees must report when the cost effective insurance ends or changes. If an enrollee has not reported a change in his or her coverage, but information suggests that there has been a change, contact the enrollee to determine if the insurance has ended or changed and why. First, attempt to contact the enrollee by phone. If the enrollee cannot be contacted by phone, send a request for information.
Depending on the situation, you may need to:
l re-determine cost effectiveness.
l close coverage for non-cooperation.
l enroll the client in managed care.
l determine if there has been an overpayment.
Example:
Harold has cost-effective insurance. Each month the county reimburses Harold the $55 premium after they receive verification of payment. This month the verification shows the premium has increased to $75.
Action:
Contact Harold to determine if the insurance has changed. If it has, re-determine cost effectiveness.
Example:
Avery is 18 years old. She is an MA enrollee and has cost effective coverage under her mother’s insurance. In December Avery married and moved out of her mother’s home. Because she no longer qualified for coverage through her mother’s insurance, her coverage ended at the end of December. Avery did not notify the county that her coverage was ending. BRS learned that the coverage had ended, entered the termination date on the TPL record, which generated a Worker Message to the county to notify them that the client’s coverage had ended.
Action:
Contact Avery to find out why she lost cost effective coverage and whether she has new coverage. Do not close Avery’s MA for non-cooperation because the insurance coverage ended when she married and moved out of her mother’s home. Update MMIS to begin the managed care enrollment process.
Example:
Crystal and her son Lee are enrolled in MA. The county reimburses Crystal the premiums she pays for cost effective health insurance. Crystal pays the insurer directly each month and submits a copy of her check to the county as verification of payment. In June, Crystal’s insurer reduced the amount of her premium from $110 to $90; however, Crystal continued to pay the insurer the old amount for June, July and August and was reimbursed by the county for the old amount. In August, the insurer noticed the error and reimbursed Crystal $60 for her extra payments. Crystal reports the change in premium amount to the county.
Action:
Re-determine cost effectiveness based on the new premium amount.