For purposes of complying with the new federal summary of benefits and coverage (SBC) rules, Medicare Advantage plan benefits are Medicare benefits, according to the Employee Benefits Security Administration (EBSA).
EBSA, an arm of the U.S. Labor Department, has included that interpretation in guidance posted in a collection of answers to frequently asked questions (FAQs).
EBSA officials have developed the answers in an effort to help employers comply with the SBC provisions in the Patient Protection and Affordable Care Act of 2010 (PPACA) and other PPACA provisions.
The PPACA SBC provisions, which are set to take effect Sept. 23, will require health insurers and employers to provide standardized, 4-page SBCs. The SBCs are supposed to help individuals and employers make apples-to-apples comparisons when they’re shopping for coverage.
An SBC would include a summary of basic plan features, along with coverage examples that show how a specific enrollee’s plan would work if the enrollee had a baby, were managing Type II diabetes, or were dealing with other common illnesses, chronic conditions or life events. Consumers would get SBCs when they apply for coverage or enroll in group plans. Consumers also could get SBCs upon request.
When members of Congress were debating PPACA, Democrats made a point of distinguishing between the traditional Medicare program, which is administered by the Centers for Medicare & Medicare Services, an arm of the U.S. Department of Health and Human Serivces (HHS), and the Medicare Advantage program.
The Medicare Advantage program gives private health insurers and managed care companies an opportunity to sell plans that serve as an alternative to the traditional Medicare plan to Medicare program enrollees.
In December 2009, when members of Congress were debating health system change legislation, Democrats made of point of arguing that Medicare Advantage coverage was something other than Medicare coverage.
Senate Finance Committee Chairman Max Baucus, D-Mont., said of proposed cuts in Medicare Advantage subsidy funding that “there are no Medicare cuts here.”
Medicare Advantage plans “aren’t Medicare plans,” Baucus said at the time. “They’re private plans…. There’s a huge distinction between Medicare and these private insurance programs.”
EBSA says an employer group plan sponsor recently reported that one of the benefits packages it offers is a Medicare Advantage plan.
“Am I required to provide an SBC for the Medicare Advantage package?” the employer asked.
The employer does not have to provide an SBC for the Medicare Advantage plan, EBSA says.
“Medicare Advantage benefits are Medicare benefits (financed by the Medicare Trust fund and equivalent to Medicare A and B benefits, which are set by Congress and regulated by the Centers for Medicare & Medicaid Services (CMS)),” EBSA says. “They are, therefore, not health insurance coverage and Medicare Advantage organizations are not required to provide an SBC with respect to such benefits.”
The Labor Department and the other departments that oversee PPACA compliance — HHS and the U.S. Treasury Department — “will not take any enforcement action against a group health plan because it does not provide an SBC with respect to a Medicare Advantage benefit package,” EBSA says.
An employer with a Medicare Advantage benefits option will still have to meet separate CMS Medicare Advantage disclosure requirements, EBSA says.