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.
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.
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.
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:
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.
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.
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.
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.
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.