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 TRICARE Secondary Payer Rules Amended
TRICARE provides medical and dental insurance to active and retired military personnel and their family members. It is considered the secondary payer to civilian health benefits and insurance plans and covers allowable charges after the primary insurers pay their portions of the bill.
Effective January 1, 2008, Chapter 55 of Title 10 US Code was amended to prohibit incentives to decline or terminate enrollment in a group health plan.
Generally speaking, this new requirement addresses two items of note:
- Employers are prohibited from providing financial or other incentives for a TRICARE-eligible employee not to enroll, or to terminate their enrollment, in an employer group health plan that would otherwise be the primary payer for their health claims.
- A TRICARE-eligible employee must be given the opportunity to elect to participate in an employer-sponsored group health plan and for that group health plan to be the primary payer for their health claims in the same manner and to the same extent as similarly situated non-TRICARE-eligible employees.
The requirement applies to all employers with 20 or more employees, and all jurisdictions insured with the AWC Employee Benefit Trust, regardless of the number of insured employees. Violations of this amendment can subject an employer to $5,000 penalty per violation.
It is currently unclear how this change will affect cafeteria plans. However, preliminary information suggests that cafeteria plans may not be considered an unlawful incentive, so long as the plan meets the requirements of IRS section125 and treats all employees the same, regardless of TRICARE eligibility.
The Department of Defense will issue interim final rules that will provide further clarification on the treatment of cafeteria plans and other employer-provided incentives, although no date has been set yet for release of the rules. For more information on TRICARE, go to www.tricare.mil/pressroom.
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