Health Summary Plan Description

Medicare

The Plan has specific rules for coordinating benefits with Medicare which are described on pages 81 through 83. The chart in that section explains terms used specifically for Medicare COB such as Earned Active coverage and Earned Inactive coverage.

You should know that traditional Medicare involves three parts. Part A, which covers hospital charges, costs you nothing. Part B, which covers doctors' bills and other medical care, involves a monthly premium. Part D, which covers prescription drugs, requires a monthly premium in most cases.

Medicare Part A – Hospital Charges

Enrollment in Part A is no longer automatic because eligibility for Medicare occurs at age 65, while the Social Security Retirement Age is now higher than age 65. If you and/or your spouse or domestic partner are not enrolled in Medicare Part A when Medicare is primary, Health Plan benefits will be reduced and you are responsible for the remainder of the charges. You are strongly urged to enroll for Medicare Part A at age 65, even if you are still working and even if you have Earned Active coverage under the Health Plan. We suggest you contact Medicare at least three months before your 65th birthday. This will eliminate the possibility that you could be subject to benefit reductions for hospital charges during any period after your Earned Active coverage ends and you become eligible for the Senior Performers Plan, the Self-Pay Program or Earned Inactive coverage. Remember, there is no premium for Part A.

Medicare Part B – Doctor Bills and Other Medical Care

Enrollment in Part B is not automatic. You must apply and pay a monthly premium and there are limits to the enrollment period. Because Part B requires a premium, it is understandable that you would not want to enroll until Medicare becomes your primary plan – when your Earned Active coverage ends and you become eligible for the Senior Performers Plan or the Self-Pay Program or Earned Inactive coverage. However, if you wait too long, there will be a gap before Medicare begins. If this happens, Health Plan benefits will be reduced. To avoid this reduction, contact the Plan Office and Medicare to make sure that you enroll as soon as you know that your coverage under the Health Plan is no longer Earned Active. We suggest you contact Medicare at least three months before your 65th birthday.

Medicare Part D – Prescription Drugs

Prescription drug coverage is available through Medicare Prescription Drug Plans (PDPs). You may enroll in a PDP when you become eligible for Medicare or during the annual open enrollment period, which runs from October 15th through December 7th. Most people have to pay a monthly premium for Part D.

Unlike Parts A and B, however, the Health Plan does not recommend that you enroll in a PDP. This is because the prescription drug benefits offered under the Health Plan are considered "creditable coverage". This means they are comparable to the standard Medicare drug benefits except under very limited circumstances. Because of this, you can choose to stay covered under the Health Plan and not be subject to a higher premium if you enroll in a Medicare PDP later. You can be in either the SAG – Producers Health Plan or a Medicare PDP, but not both.

There are three possible situations in which you may be better off enrolling in a Medicare PDP:

  • People with Limited Resources – Medicare includes special provisions for people with limited income and resources. The special provisions may allow you to receive Medicare prescription drug benefits with no premium and low or no deductibles and copays. If you think you may qualify, you should contact the Social Security Administration or complete their worksheet found on their website (www.ssa.gov) or the Plan's website (www.sagph.org, then click "Medicare").
  • Self-Pay Program Participants – If you are currently enrolled in the Self-Pay Extended Coverage Program and are also Medicare-eligible, it is possible that, with the monthly self-pay premiums and prescription drug deductible and copays, you may pay more for the Plan's coverage than through a Medicare PDP. Keep in mind that if you decide to enroll in a Medicare PDP and stop paying your Health Plan self-pay premiums, you will have no coverage – hospital, medical, prescription drug or dental – under the Plan. You cannot drop just the prescription drug benefits and retain the other coverage. Also, if you terminate your self-pay coverage, you will not be able to get back into the Self-Pay Program unless you requalify for Earned Eligibility.
  • Medicare HMOs – If you are enrolled in a Medicare HMO, that plan may have automatically enrolled you in their Medicare PDP. The HMO may not allow you to drop just the prescription drug coverage without dropping the hospital and medical coverage as well.

When making your decision to enroll, you should compare the Plan's coverage, including what medications are covered, with the coverage and cost of the Medicare PDPs in your area. If you enroll in a Medicare PDP and you have Earned Inactive, Self-Pay, Senior Performer or Extended Spousal eligibility, you will no longer receive prescription drug coverage under the Plan.

If you enroll in a Medicare PDP and later drop that coverage, you can again receive prescription drug coverage from the Health Plan, provided you still have Earned Inactive, Self-Pay, Senior Performers or Extended Spousal eligibility. Your Health Plan prescription drug coverage will be effective the first of the month after your Medicare PDP coverage ends.

If you are eligible for Medicare, the Plan will periodically mail you a Notice of Creditable Coverage. This Notice is also available upon request to the Plan Office and on the website: www.sagph.org. It advises you that the Plan's prescription drug coverage is on average, comparable to the standard Medicare prescription drug coverage. You will need a copy of the Notice if you lose coverage under the Plan and want to enroll in a PDP without paying a higher premium.

Coordination of Benefits with Medicare

If you are age 65 or older and you have Self-Pay, Senior Performer or Extended Spousal eligibility, Medicare is your primary plan and this Plan pays as secondary. However, federal law requires that this Plan be primary to Medicare for "active" participants who are age 65 or older. If you qualify for Alternative Earned Eligibility under the Days of Employment rule, you are "active". With respect to Covered Earnings, Medicare does not consider residual earnings as "active" earnings. Only sessional earnings are considered "active". Accordingly, in determining whether you are "active" under Medicare's rules and, therefore, whether this Plan or Medicare is primary, the rules in the following table apply.

If Your Earned Eligibility
is Based on
You Are Primary Plan Secondary Plan
All Sessional Earnings Active SAG – Producers Plan Medicare
All Residual Earnings Inactive Medicare SAG – Producers Plan
Combination Residual and Sessional Earnings but less than $15,100* in Sessions Inactive Medicare SAG – Producers Plan
Days of Employment Active SAG – Producers Plan Medicare
For participants at least age 40 with at least 10 years of Earned Eligibility - Combination Residual and Sessional Earnings but less than $10,900* in Sessions Inactive Medicare SAG – Producers Plan

* These are the minimum amounts currently required to establish or continue Earned Eligibility. The minimum earnings requirements are subject to change from time to time by the Trustees.

It is possible for your status to change from year to year. For example, if you return to work for the minimum Days of Employment (currently 76) the Plan becomes your primary plan. If you do not work the minimum days in the next year and your sessional earnings are less than the minimum requirement, Medicare would become your primary plan. The Plan Office will let you know of any change in your eligibility and can tell you which plan is primary at any time.

Once you lose all eligibility under the Health Plan, Medicare would be your only coverage and, therefore, your primary coverage. The Plan Office will notify you when your eligibility type changes.

IMPORTANT NOTES:

The following special rules apply to any participant or dependent who is eligible for Medicare, including participants or dependents age 65 or older and participants or dependents who are eligible for Medicare due to disability.

  • With the exception of life insurance and AD&D benefits, no distinction is made between sessional and residual earnings in determining your eligibility for benefits. All earnings count the same toward Earned Eligibility. The distinction is made only for purposes of COB with Medicare, the amount of life insurance and eligibility for AD&D benefits.
  • Medicare is primary for Medicare-disabled dependents of participants younger than age 65 whose Earned Eligibility is based on less than $15,100 in sessions (or $10,900 in sessions if you meet the Age and Service requirement). These amounts will increase when the minimum earnings requirement increases.
  • Medicare is primary for all Medicare-eligible same-sex domestic partners.
  • Special rules apply to individuals with End Stage Renal Disease. Call or email the Plan Office for details.

If you or your dependent are eligible for other health insurance in addition to SAG – Producers and Medicare, please contact the Plan Office to determine the order of claims payment. The Plan's EICOB rules will apply in this situation and can be very challenging to understand (see pages 77 and 78).

There are three situations in which Plan benefits will be reduced for Medicare beneficiaries.

  1. If you fail to enroll in Medicare Parts A and B when the SAG – Producers Plan is secondary.

    If you fail to enroll in Medicare Parts A and B when this Plan is secondary to Medicare, this Plan's benefits will be reduced by 80% because the Plan will coordinate benefits as though you received reimbursement from Medicare. You should contact Medicare at least three months before you turn age 65 to enroll in Medicare.

  2. If you use a doctor who has opted out of Medicare.

    Medicare allows doctors the opportunity to opt out of the Medicare system and contract directly with patients to provide treatment outside of Medicare. A doctor who has opted out of Medicare must inform the patient that his or her services will not be covered by Medicare, and the doctor and patient must sign a written contract in which the patient agrees that the doctor's charges will not be paid by Medicare. If you or your spouse or domestic partner use the services of a doctor who has opted out of Medicare, this Plan's benefits will be reduced because the Plan will coordinate benefits as though you received reimbursement from Medicare.

  3. If you fail to use a Medicare HMO provider when Medicare is primary.

    Medicare beneficiaries have a choice between traditional Medicare (Parts A and B) or a Medicare HMO. If you or your spouse or domestic partner are enrolled in a Medicare HMO as your primary plan, but do not use the HMO network providers, this Plan's benefits will be reduced by 80%.

Remember, the Health Plan does not coordinate with Medicare for prescription drug coverage. If you have Earned Inactive, Self-Pay, Senior Performer or Extended Spousal eligibility and you enroll in a Medicare PDP you will not be eligible for the Health Plan's prescription drug benefits.