[Code of Federal Regulations]
[Title 42, Volume 2]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 42CFR411.108]

[Page 321-322]
 
                         TITLE 42--PUBLIC HEALTH
 
                             HUMAN SERVICES
 
PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT--Table of Contents
 
   Subpart E--Limitations on Payment for Services Covered Under Group 
                    Health Plans: General Provisions
 
Sec. 411.108  Taking into account entitlement to Medicare.

    (a) Examples of actions that constitute ``taking into account''. 
Actions by GHPs or LGHPs that constitute taking into account that an 
individual is entitled to Medicare on the basis of ESRD, age, or 
disability (or eligible on the basis of ESRD) include, but are not 
limited to, the following:
    (1) Failure to pay primary benefits as required by subparts F, G, 
and H of this part 411.
    (2) Offering coverage that is secondary to Medicare to individuals 
entitled to Medicare.
    (3) Terminating coverage because the individual has become entitled 
to Medicare, except as permitted under COBRA continuation coverage 
provisions (26 U.S.C. 4980B(f)(2)(B)(iv); 29 U.S.C. 1162.(2)(D); and 42 
U.S.C. 300bb-2.(2)(D)).
    (4) In the case of a LGHP, denying or terminating coverage because 
an individual is entitled to Medicare on the basis of disability without 
denying or terminating coverage for similarly situated individuals who 
are not entitled to Medicare on the basis of disability.
    (5) Imposing limitations on benefits for a Medicare entitled 
individual that do not apply to others enrolled in the plan, such as 
providing less comprehensive health care coverage, excluding benefits, 
reducing benefits, charging higher deductibles or coinsurance, providing 
for lower annual or lifetime benefit limits, or more restrictive pre-
existing illness limitations.
    (6) Charging a Medicare entitled individual higher premiums.
    (7) Requiring a Medicare entitled individual to wait longer for 
coverage to begin.
    (8) Paying providers and suppliers less for services furnished to a 
Medicare beneficiary than for the same services furnished to an enrollee 
who is not entitled to Medicare.
    (9) Providing misleading or incomplete information that would have 
the effect of inducing a Medicare entitled individual to reject the 
employer plan, thereby making Medicare the primary payer. An example of 
this would be informing the beneficiary of the right to accept or reject 
the employer plan but failing to inform the individual that, if he or 
she rejects the plan, the plan will not be permitted to provide or pay 
for secondary benefits.

[[Page 322]]

    (10) Including in its health insurance cards, claims forms, or 
brochures distributed to beneficiaries, providers, and suppliers, 
instructions to bill Medicare first for services furnished to Medicare 
beneficiaries without stipulating that such action may be taken only 
when Medicare is the primary payer.
    (11) Refusing to enroll an individual for whom Medicare would be 
secondary payer, when enrollment is available to similarly situated 
individuals for whom Medicare would not be secondary payer.
    (b) Permissible actions. (1) If a GHP or LGHP makes benefit 
distinctions among various categories of individuals (distinctions 
unrelated to the fact that the individual is disabled, based, for 
instance, on length of time employed, occupation, or marital status), 
the GHP or LGHP may make the same distinctions among the same categories 
of individuals entitled to Medicare whose plan coverage is based on 
current employment status. For example, if a GHP or LGHP does not offer 
coverage to employees who have worked less than one year and who are not 
entitled to Medicare on the basis of disability or age, the GHP or LGHP 
is not required to offer coverage to employees who have worked less than 
one year and who are entitled to Medicare on the basis of disability or 
age.
    (2) A GHP or LGHP may pay benefits secondary to Medicare for an aged 
or disabled beneficiary who has current employment status if the plan 
coverage is COBRA continuation coverage because of reduced hours of 
work. Medicare is primary payer for this beneficiary because, although 
he or she has current employment status, the GHP coverage is by virtue 
of the COBRA law rather than by virtue of the current employment status.
    (3) A GHP may terminate COBRA continuation coverage of an individual 
who becomes entitled to Medicare on the basis of ESRD, when permitted 
under the COBRA provisions.

[60 FR 45362, Aug. 31, 1995; 60 FR 53876, Oct. 18, 1995]