Frequently Asked Questions

About the State Health Benefits Program and School Employees' Health Benefits Program Retiree Prescription Drug Benefits and Medicare's Part D Prescription Drug Benefit

Prescription drug coverage through Medicare plans became effective January 1, 2006. Anyone residing in the United States (or U.S. territories) who is eligible for Medicare is able to enroll in a Medicare Prescription Drug Plan (called Medicare Part D plans).

The State Health Benefits Program (SHBP) and School Employees' Health Benefits Program (SEHBP) retiree prescription drug plans provide coverage that is equal to or better than the standard Medicare Part D prescription drug benefit. Medicare eligible members of the SHBP or SEHBP receive a formal notice from the Division of Pensions and Benefits called a Notice of Creditable Coverage attesting to this fact.

Because the SHBP and SEHBP health plan's prescription drug benefits are equal or better than the Medicare Part D prescription drug benefit plans, most SHBP or SEHBP retirees and/or their dependents need not enroll in any Medicare Part D plan. If you and/or your covered dependents do enroll in Medicare Part D, your SHBP or SEHBP-provided retired group prescription drug benefits will be terminated for you and all of your dependents.

Note: Some members who qualify for limited-income subsidy programs may find it beneficial to enroll in one of Medicare's Part D plans (see Question # 9 below).

The following are frequently asked questions:

RETIRED MEMBERS

1. Q. Do I have to do anything?

A. No. If you do not do anything you (and any covered dependents) will continue to be covered for prescription drug benefits through your SHBP or SEHBP health plan as a retiree. If you pay all or a portion of the premiums for your coverage, you must continue to do so. While retirees and their dependents are required to be enrolled in Medicare Parts A and B of the federal Medicare Program (if eligible) in order to be covered by the SHBP or SEHBP, you are not required to enroll in Medicare Part D.

2. Q. Can I enroll in Medicare Part D and keep my SHBP or SEHBP prescription drug coverage?

A. No. Retirees who enroll in Medicare Part D will lose their SHBP or SEHBP prescription drug benefits. If you or any of your eligible dependents enroll in a Medicare Part D plan, your SHBP medical plan benefits will continue, but your SHBP or SEHBP-provided retiree prescription drug benefits will be terminated for you and all of your dependents.

3. Q. If I enroll in a Medicare Part D plan and it does not cover a particular drug will the SHBP or SEHBP cover the cost of that drug?

A. No. If you enroll in a Medicare Part D plan you will not have SHBP or SEHBP retiree prescription drug coverage. The SHBP or SEHBP will not cover the cost of any prescription drug that is not covered by a Medicare Part D plan. If you are contemplating enrolling in a Medicare Part D plan, you should look at the Part D plan's formulary to determine whether your medication is covered by the Part D plan. You may find it helpful to also have your doctor(s) look at the formulary.
Remember, a Medicare Part D plan can add or drop a drug from its formulary at anytime, provided it gives you at least 60 days advance notice. We also suggest that you make a side-by-side comparison of all of the features and benefits, including copays and or deductibles, coinsurance provisions, and out-of-pocket maximums of the Medicare Part D plan to your current SHBP or SEHBP prescription drug coverage.

4. Q. I am retired, under the age of 65, and not eligible for Medicare, but one of my dependents is eligible for Medicare. Can he/she elect to enroll in Medicare Part D without affecting my benefits?

A. No. Regardless of whether you as the retiree or a covered dependent elects to enroll in Medicare Part D, your SHBP or SEHBP-provided retiree prescription drug benefits will be terminated for you and all of your dependents.

5. Q. I have heard that if I do not enroll in Medicare Part D when I first become eligible, that I will have to pay a penalty if I elect to enroll at a later date. Is this accurate?

A. Since all SHBP and SEHBP retiree plans are equal to or better than the standard Medicare Part D prescription drug benefit, a person who is enrolled in one of the SHBP or SEHBP retiree prescription drug plans will not be assessed a penalty by Medicare if he/she decides to join a Medicare Part D plan at a later date. Joining a Medicare Part D plan will terminate your SHBP or SEHBP prescription drug coverage for you and all of your dependents.

6. Q. If I enroll in Medicare Part D and later change my mind, will I be able to enroll or re-enroll in the SHBP or SEHBP retiree prescription drug benefits through a SHBP or SEHBP health plan?

A. Yes. As long as you have maintained your SHBP or SEHBP medical plan coverage, you will be able to enroll or re-enroll for prescription drug coverage if you drop your Medicare Part D plan. If you notify the Health Benefits Bureau within 60 days of the date your Medicare Part D plan coverage is terminated, you will be able to obtain prescription drug coverage through your SHBP or SEHBP health plan retroactive to the date your Medicare Part D plan coverage was terminated. If you notify the Health Benefits Bureau on or after the 61st day your Medicare Part D plan coverage was terminated, your SHBP or SEHBP retiree prescription drug benefit will be reinstated on the first day of the month following a two (2) month waiting period beginning on the date your request for re-enrollment is received by the Health Benefits Bureau.

7. Q. If I keep my SHBP or SEHBP retiree drug coverage and do not enroll in Medicare Part D now, will I be able to enroll in a Medicare Part D plan at a later date?

A. In general yes, provided you apply to the Medicare Part D plan within 62 days of the date your SHBP or SEHBP coverage terminates and provide the Medicare Part D plan with a copy of the Notice of Creditable Coverage.

8. Q. Medicare sent me a letter saying that I will be enrolled in a Medicare Part D plan, but the SHBP/SEHBP says I need not enroll in Medicare Part D. What should I do?

A. If you and/or your dependent(s) are eligible for both Medicare and Medicaid benefits, you and/or your dependent may receive a letter from the U.S. Department of Health & Human Services, Centers for Medicare & Medicaid Services (CMS) telling you that you will be enrolled in a Medicare Part D plan if you do not select one on your own, however, you do not have to be enrolled in Medicare Part D.

If you do not want to join a Medicare Part D plan and are willing to continue paying the costs, if any, for your SHBP or SEHBP retiree prescription drug coverage, call 1-800-MEDICARE (1-800-633-4227) and advise them that you do not want to be enrolled in a Medicare Part D plan.

Note, however, that Medicaid prescription drug coverage for anyone enrolled in both Medicare and Medicaid ended on December 31, 2005. The State's Medicaid program will not be providing prescription drug coverage to individuals who are entitled to both Medicare and Medicaid. All prescription drug coverage will be provided by a Medicare Part D plan or, for SHBP or SEHBP retirees and their covered dependents, the SHBP or SEHBP medical plan in which they are enrolled.

IMPORTANT: If you decide to accept Medicare's offer and you have covered dependents under your SHBP or SEHBP retiree health plan, your SHBP or SEHBP provided retiree prescription drug benefits will be terminated for you and all of your dependents - including those dependents who are not eligible for Medicare.

9. Q. My pension, Social Security, and other income combined, is small and I am having a difficult time paying my health insurance premiums. Is there something that can be done to make the coverage less costly?

A. Yes. If you qualify for one of three groups of limited-income Medicare beneficiaries (listed below) and you pay all or a portion of the cost of your SHBP or SEHBP coverage you might be able to pay less if you enroll in a Medicare Part D plan.

There are three groups of limited-income Medicare beneficiaries:

• If you are enrolled in both Medicare and Medicaid, you are automatically eligible for a limited-income subsidy. You will not have to apply for the subsidy or pay premiums for basic Medicare Part D coverage. The federal Medicare rules require you to pay $1 for a generic prescription drug and $3 for a brand name prescription drug. Once your total drug expenditure exceeds $5,100 in a calendar year, you will no longer need to pay co-payments for the rest of that calendar year. If you are residing in a nursing home, you will have no cost sharing.
  
  
• If you are enrolled in Medicare with income greater than 100% of the federal poverty level (fpl) but below 135% of the fpl and have current assets of no more than $6,000 for one person or $9,000 for two persons, you are also automatically eligible for a limited-income subsidy. You will have no annual deductibles and no premium cost for the Medicare Part D plan. Your drug cost will be $2 for a generic prescription drug and $5 for a brand name prescription drug. Once your total drug expenditure exceeds $5,100 in a calendar year, you will no longer need to pay co-payments for the rest of that year.
  
  
• If you are enrolled in Medicare, with income above 135% federal poverty level (fpl) but below 150% of the fpl, with assets of no more than $10,000 for one person and $20,000 for two persons, you are eligible for a limited-income subsidy; however, you must apply for the subsidy through your local Social Security or Medicaid office. You will have to pay premiums for your Medicare Part D plan on a sliding scale that will vary from $0 to $420 a year, with an annual deductible of $50. You will have to pay 15% of the price of your prescription drugs until your total expenditures for the year exceed $5,100. Once you meet this threshold, you will pay $2 for a generic brand drug and $5 for a brand name drug.

• Medicare & You handbook which is revised by Medicare each October.
  
  
• The Medicare Web site at: www.medicare.gov where you can find fact sheets and an online Medicare Prescription Drug Plan Finder tool.
  
  
• 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week. TTY users should call 1-877-486-2048.

The best sources of information about your SHBP or SEHBP coverage are:

• The Summary Program Description;
  
  
• The NJ DIRECT and HMO plan member handbooks; and
  
  
• The Division of Pension and Benefits - Health Benefits Web site at:
  www.state.nj.us/treasury/pensions/shbp.htm
  
  
• You may also contact the Division of Pensions and Benefits Office of Client Services at (609) 292-7524 or send e-mail to the Division at: pensions.nj@treas.state.nj.us
  

• If you reside in New Jersey, additional information can be obtained by calling the New Jersey Department of Health and Senior Services, Support Services for the Aged and Disabled toll-free hotline at 1-800-792-9745. (If you reside in another state, information is usually available at each County's Office of the Aged, or Office of Social Services.)
  
  
• For people with limited-income and resources, extra help paying for a Medicare Part D prescription drug plan is available. For more information about this extra help contact the Social Security Administration online at: www.socialsecurity.gov or call them at 1-800-SSA-1213 (1-800-772-1213)

ACTIVE EMPLOYEES

12. Q. Can I enroll in Medicare Part D and keep my SHBP or SEHBP prescription drug coverage?

A. Yes. If you are enrolled in the SHBP or SEHBP as an active employee and are receiving Social Security benefits or have a dependent who is receiving Social Security benefits, prescription drug benefits provided under the SHBP or SEHBP will continue to be the primary payer of your prescription drug benefits even if you and/or your dependent(s) enroll in a Medicare Part D plan.

However, when you retire, you will have to choose to continue either your SHBP or SEHBP prescription drug coverage or your Medicare Part D prescription drug plan (see Question #16 below).

13. Q. If I or my Medicare eligible dependent(s) enroll in a Medicare Part D plan and it does not cover a particular drug will the SHBP or SEHBP cover the cost of that drug?

A. Yes. As an active employee, your SHBP or SEHBP health plan is the primary payer of your prescription drug benefits. Therefore, the SHBP or SEHBP will cover the cost of drugs that are not on a Medicare Part D plan's formulary.

When you retire, you will have to choose to continue either your SHBP or SEHBP prescription drug coverage or a Medicare Part D prescription drug plan (see Question #16 below).

14. Q. Medicare sent a letter saying that my disabled child will be enrolled in a Medicare Part D plan. What should I do?

A. If your dependent (or you) are eligible for both Medicare and Medicaid benefits and your dependent (or you) received a letter from the U.S. Department of Health & Human Services, Centers for Medicare & Medicaid Services (CMS) stating that your Medicare eligible dependent (or you) will be enrolled in a Medicare Part D plan if you do not select one on your own, it is important that you know the following:  

• Your dependent (or you) do not have to be enrolled in Medicare Part D. If your dependent (or you) do not want to join a Medicare Part D plan, call 1-800-MEDICARE and advise them that you and/or your dependent does not want to be enrolled in a Medicare Part D plan.
  
  Note, however, that Medicaid prescription drug coverage for anyone enrolled in both Medicare and Medicaid ended on December 31, 2005. The State's Medicaid program is not providing prescription drug coverage to individuals who are entitled to both Medicare and Medicaid.
  
  
• If your Medicare eligible dependent (or you) decides to accept Medicare's offer and enroll in a Medicare Part D plan, as an active employee your SHBP or SEHBP health plan will be the primary payer of your Medicare eligible dependent's prescription drug benefits. The Medicare Part D plan will be the secondary payer.

MPORTANT: When you retire, you will have to choose to continue either your SHBP or SEHBP prescription drug coverage or the Medicare Part D prescription drug plan. If you or any of your eligible dependents continue enrollment in a Medicare Part D plan, your SHBP or SEHBP medical plan benefits will continue, but your SHBP or SEHBP-provided retiree prescription drug benefits will be terminated for you and all of your dependents - including those dependents who are not eligible for Medicare.

15. Q. My dependent is covered by both Medicare and Medicaid. Will Medicaid continue to provide prescription drug coverage?

A. No. We have been advised by the NJ Division of Medical Assistance and Health Services that Medicaid prescription drug coverage ended on December 31, 2005 for anyone enrolled in both Medicare and Medicaid. Contact your local county Medicaid office for additional information about changes to your Medicaid coverage.

If your dependent (or you) choses to continue with SHBP or SEHBP prescription drug coverage, after December 31, 2005, Medicaid no longer pays prescription drug copayments, and you became responsible for any prescription drug copayments under your SHBP or SEHBP plan.

16. Q. Should I enroll in Medicare Part D when I retire?

A. Retirees who enroll in Medicare Part D will lose their SHBP or SEHBP prescription drug benefits. Therefore, it may not be in the best interest of most SHBP or SEHBP eligible retirees to enroll in Medicare Part D. (limited-income retirees should see Question #9 above).

Note: Retirees and their dependents are required to be enrolled in Parts A and B of the federal Medicare Program (if eligible) in order to be covered by the SHBP or SEHBP, you are not required to enroll in Medicare Part D.  

• If you or any of your eligible dependents choose to enroll in a Medicare Part D plan, your SHBP or SEHBP medical plan benefits will continue, but your SHBP or SEHBP provided retiree prescription drug benefits will be terminated for you and all of your dependents.
  
  
• If you and/or any of your covered dependents are already enrolled in a Medicare Part D plan when you retire, you will have to choose between continuing your SHBP or SEHBP prescription drug coverage or the Medicare Part D prescription drug plan. If you or any of your eligible dependents continue enrollment in a Medicare Part D plan, your SHBP or SEHBP medical plan benefits will continue, but your SHBP or SEHBP-provided retiree prescription drug benefits will be terminated for you and all of your dependents - including those dependents who are not eligible for Medicare.

Note: Retirees have the option of terminating SHBP or SEHBP benefits for a Medicare eligible dependent and continuing SHBP or SEHBP coverage for themselves and any other dependents. However, the Medicare eligible dependent will have ONLY Medicare and, if applicable, Medicaid; will lose ALL SHBP or SEHBP-provided health, prescription drug, and (if applicable) dental coverage; and may NOT be allowed to re-enroll into the SHBP or SEHBP at anytime in the future.

17. Q. Where can I find more information about my prescription drug coverage?

A. The federal sources of information about Medicare Part D prescription drug plan options are the:

• Medicare & You handbook which is revised by Medicare each October.
  
  
• The Medicare Web site at: www.medicare.gov where you can find fact sheets and an online Medicare Prescription Drug Plan Finder tool.
  
  
• 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week. TTY users should call 1-877-486-2048.

The best sources of information about your SHBP oe SEHBP coverage are:

• The Summary Program Description;
  
  
• The Employee Prescription Drug Plan Member Handbook;
  
  
• The NJ DIRECT or HMO plan member handbooks; and
  
  
• The Division of Pension and Benefits - Health Benefits Web site at:
  www.state.nj.us/treasury/pensions/shbp.htm
  
  
• You may also contact the Division of Pensions and Benefits Office of Client Services at (609) 292-7524 or send e-mail to the Division at: pensions.nj@treas.state.nj.us