STATE HEALTH BENEFITS
PROGRAM and
SCHOOL EMPLOYEES' HEALTH BENEFITS
PROGRAM
MEDICARE PART D FREQUENTLY ASKED QUESTIONS
RETIREE PRESCRIPTION DRUG COVERAGE UNDER THE SHBP/SEHBP
AND
MEDICARE PART D PRESCRIPTION DRUG BENEFITS
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.
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 the SHBP or SEHBP 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?
Previously, if a member and/or spouse enrolled in Medicare Part D, both the member and his or her spouse were dropped from SHBP or SEHBP prescription drug coverage. However, the policy has been changed and effective January 1, 2010, a spouse may remain covered under the SHBP or SEHBP prescription drug coverage if he or she does not join their spouse in enrolling in Medicare Part D. Therefore, only the person enrolled in Medicare Part D will lose their SHBP or SHBP prescription drug coverage.
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. Yes. Only the covered dependent who elects to enroll
in Medicare Part D will be terminated from SHBP/SEHBP prescription
drug coverage.
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 the SHBP and SEHBP retiree prescription drug
plans are equal to or better than the standard Medicare Part
D prescription drug benefit, a person who is enrolled in 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. If you or a dependent
joins a Medicare Part D plan, the SHBP/SEHBP prescription
drug coverage of the individual who enrolled in Medicare Part
D will terminate.
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?
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 the SHBP or SEHBP 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 provide 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 prescription drug plans.
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.
10. Q. I or my dependent are 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 you, or your dependent, chose to continue with SHBP
or SEHBP prescription drug coverage, after December 31, 2005,
Medicaid will no longer pay your prescription drug copayments,
and you became responsible for any prescription drug copayments
under your SHBP or SEHBP plan as of January 1, 2006.
11. Q. What are the best sources for 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 or SEHBP coverage are:
- 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
Other useful resources include
the following.
- 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.
IMPORTANT: 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 the SHBP/SEHBP
prescription drug coverage of the individual who enrolled
in Medicare Part D will be terminated.
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 the
SHBP/SEHBP prescription drug coverage of the individual
who enrolled in Medicare Part D will be terminated.
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 or SEHBP coverage are:
- 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
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