Compliance Q&A: Medicare Enrollment Rules, FSA-HSA Contribution Guidelines, 60-Day FMLA Notice Requirement, & COBRA vs. Deductible Insights

1.2.25 |  REQUIREMENT TO ENROLL IN MEDICARE

Q. Is a 68-year-old employee of a four-employee subsidiary of a 45-employee company required to enroll in Medicare?

A. An employer cannot require an employee to enroll in Medicare. While employers with fewer than 20 employees are exempt from the Medicare Secondary Payer rules, this does not mean they can force a Medicare eligible employee to enroll in Medicare. It only means their health insurance plan can treat the employee “as if” they are enrolled in Medicare and pay on a secondary basis. A practical effect of such a provision in the employer’s plan is that the employee will enroll in Medicare. But it is important to note the employer cannot require the employee to enroll in Medicare.

The rules are different for employers with more than 20 employees. Employers with more than 20 employees cannot treat Medicare-eligible employees differently than other employees in the terms of health insurance. This means that Medicare-eligible employees have no incentive to enroll in Medicare if they don’t want to, and the employer cannot incentivize the Medicare-eligible employee to enroll in Medicare.

For measuring whether a company has 20 or more employees, you look at all employees within the same controlled group. If a 45-employee company owns all of a four-employee company, both companies will be deemed to have more than 20 employees for purposes of the Medicare Secondary Payer rules.

1.9.25 |  FSA WITH HSA CONTRIBUTION RULES

Q. A covered employee is enrolled in an HDHP with family coverage and contributes to an HSA. The spouse contributes to an FSA with her employer. Is this allowed?

A. If the FSA is a general purpose FSA, the spouse’s participation in the FSA will disqualify the employee from contributing to an HSA. A general purpose FSA is considered “other coverage” that provides benefits prior to the satisfaction of the HDHP for the spouse or the employee. The employee can participate in the HDHP; they just will not be able to contribute to an HSA if the spouse participates in a general purpose FSA.

1.16.25 |  FMLA CHANGE – 60 DAYS NOTICE TO EMPLOYEES

Q. An employer group is changing its lookback method for Family and Medical Leave Act (FMLA) eligibility. Are they required to give employees 60 days notice of this change, and is there template language that must be used for the notice?

A. If an employer changes methods for determining FMLA eligibility, the employer must give all employees at least 60 days advance notice of the proposed change. During this 60-day transition period, employees get the benefit of the eligibility method that provides the greatest benefit to the employee. For more information, see the Department of Labor FAQ on the topic. There is no template notice at this time. The employer can simply explain the change and provide contact information for employee questions.

1.23.25 |  COBRA VS. DEDUCTIBLE

Q. If an employee moves to COBRA, will they start over with meeting their deductible and out-of-pocket expenses?

A. Because COBRA is just a continuation of the coverage an employee was on previously, the deductible and out-of-pocket expenses should not reset.

Answers to the Question of the Week are provided by Kutak Rock LLP. Kutak Rock provides general compliance guidance through the UBA Compliance Help Desk, which does not constitute legal advice or create an attorney-client relationship. Please consult your legal advisor for specific legal advice.