Beneficiaries of the Title II disability programs often believe that Medicare entitlement stops when cash payments stop, this is not necessarily the case. The Extended Period of Medicare Coverage (EPMC) provision allows most beneficiaries who meet the Social Security disability standard to continue Medicare coverage for at least 93-months after the Trial Work Period ends, even if cash benefits ceased due to Substantial Gainful Activity (SGA) level employment. Even after this extended Medicare coverage ends, a qualified working individual with a disability may be eligible to purchase Medicare Part A and Part B by paying monthly premiums. This briefing paper will focus on the available options for extending Medicare coverage for beneficiaries with disabilities whose Title II benefits are terminated due to work.
Extended Period of Medicare Coverage The Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA) made an important change to the Medicare program for working beneficiaries with disabilities. It significantly extended the amount of time beneficiaries who lose entitlement because of substantial work may receive premium-free Part A Medicare and premium-based Part B. The new rule, Extended Period of Medicare Coverage (EPMC), applies to anyone who currently has Medicare coverage based on disability benefits, provided that the disability continues. Prior to the creation of the EPMC, premium free Medicare could only be extended for 39 months after the completion of the Trial Work Period (TWP). The new rules allows coverage to continue for at least 93-months after the TWP ends, an addition of at least 54 months of Medicare coverage! Keep in mind that Medicare will never end before the month after the month of the termination notice, regardless of the reason benefits are being ceased. Below is a closer look at the EPMC provisions.
First, it is important to understand that the Extended Period of Medicare Coverage is a work incentive for Title II disability beneficiaries. It is afforded to individuals who have lost benefits due to work. It is NOT a way to keep Medicare when benefits are lost due to medical recovery. People in the EPMC must still meet the Social Security disability requirement, even though these individuals may not be due cash payments.
The Extended Period of Medicare Coverage will never begin before a person's Trial Work Period has been used. This is because cash benefits are guaranteed in the TWP regardless how much the beneficiary earns and Medicare is guaranteed as long as entitlement for cash benefits continues. The Extended Period of Eligibility (EPE) always begins the month after the 9th TWP month. It consists of 36 months during which a beneficiary may receive a full cash benefit for any month the person does not perform Substantial Gainful Activity (SGA). As long as the individual continues to have a disability, their entitlement to benefits doesn't fully terminate until the first month after the end of the EPE that the person performs SGA. If the beneficiary is still in the EPE, but not due cash benefits, benefits are considered to be suspended, not terminated. There are three rules that govern how long the extended coverage will be, depending on when the individual performed SGA during the Extended Period of Eligibility (EPE).
Rule 1: If the first month of SGA following the end of the TWP occurs PRIOR to the 14th month of the EPE, AND there is SGA level earnings also in the 16th month of the EPE, then Medicare extends for 78 months after the 15th month of the EPE. That is 93 months from the end of the TWP. There are several things to remember about rule one:EPMC Complications
- The person performs Substantial Gainful Activity shortly after the end of the TWP-in fact, before 14 months have passed.
- By performing SGA, that means the SSA has "ceased" the cash payments. Cessation occurs when the person first performs Substantial Gainful Activity after the end of the TWP.
- When a person's benefits are "ceased" the individual receives a cash benefit for three months--the cessation month and two grace months-before payments stop.
- For Rule 1 to apply, the person must still be performing Substantial Gainful Activity in the 16th month after the Trial Work Period ends.
- Regardless of which rule applies, if the person becomes reentitled to cash benefits, Medicare benefits will continue as long as cash benefits are payable.
- If the person remains disabled, but works long enough for the cash benefits to be terminated, then the person will have Medicare coverage for at least 93-months after the Trial Work Period ended.
Rule 2: If the first month of SGA following the end of the TWP occurs PRIOR to the 14th month of the EPE but there is NO SGA in the 16th month of the EPE, Medicare ends with the last day of the 77th month following the first month of SGA after the 16th month. That is at least 93 months from the end of the TWP. Here are some things to remember about rule two:
- The person performs SGA within 13 months of the end of the TWP-relatively soon after the Trial Work Period ends, just like in rule 1 except....
- The beneficiary is no longer performing SGA during the 16th month after the Trial Work Period ends.
- The continued Medicare clock doesn't begin to tick again until the person performs Substantial Gainful Activity-no matter how long that takes. In the meantime, the person still has Medicare, since the beneficiary remains in cash payment status.
- Once the beneficiary begins to perform SGA again, the person has Medicare at least until the last day of the 77th month (6years and 5 months) after the person performs SGA.
Rule 3: If the first month of SGA following the end of the TWP occurs AFTER the 13th month of the EPE, Medicare ends with the last day of the 80th month following the first month of SGA after the TWP. That is at least 93 months from the end of the TWP. Here are some things to remember about rule three:
- The person doesn't perform SGA for more than a year and one month after the Trial Work Period ends. This differs from both Rule 1 and 2, which both require that cessation occurs before the 14th month after the end of the Trial Work Period.
- The beneficiary is not performing SGA in the 16th month after the TWP ends.
- The individual's entitlement to Medicare is indefinite until the person performs Substantial Gainful Activity, regardless of how far in the future SGA occurs.
- When the person performs SGA, the beneficiary will receive benefits for the Cessation month and two grace months before benefits stop. Medicare, however, will continue for at least 80 months after the person performs SGA.
- As with the other rules, Medicare is indefinite if the person becomes reentitled to benefits either in the Extended Period of Eligibility, or under reapplication, or through Expedited Reinstatement (EXR).
Remember when advising beneficiaries about Medicare continuation that the SSA is the only place to find out how long the coverage will last. The beneficiary may not know when or if the Trial Work Period ended, whether cessation has occurred, or even that work should have caused benefit termination. Some beneficiaries may have used most or all of the Extended Period of Medicare in the past without even realizing it.
Because performance of Substantial Gainful Activity, is so important to the length of time someone has Medicare, Benefits Specialists may help people by teaching all of the work incentives. For example, someone may begin performing work at a high enough level that it might, at first, appear to be SGA. SGA, however, represents sustained work effort valued above a certain amount, if the work effort is short, and ends because of the person's disability, they may actually have an Unsuccessful Work Attempt. This is a determination that will be made by SSA. In these situations, the SSA may go back and reverse the cessation, since the person was not performing SGA.
Helping people understand Unsuccessful Work Attempts, Subsidy, Impairment Related Work Expenses, income averaging, and unincurred business expenses or unpaid help may help beneficiaries keep Medicare longer. With this information in hand, beneficiaries may be able to alert the SSA to a change in their situation that means the work is not Substantial Gainful Activity.
Extended Medicare and Expedited Reinstatement
Because the Extended Period of Medicare Coverage (EPMC) is a work incentive, people must still meet the disability definitions to be entitled. This creates a potential risk for individuals who request Expedited Reinstatement. There are two standards used to determine disability status. One, used for new applications, is tougher because the burden of proof lies with the applicant. The other standard, called the medical improvement standard, is used both in medical Continuing Disability Reviews and Expedited Reinstatement.
Requesting Expedited Reinstatement and being medically denied, is the same as having a medical CDR when receiving benefits and being found to have medically improved. When medical improvement occurs, all work incentives, including the Extended Period of Medicare, stop. If this is a concern for people considering whether or not to apply for benefits or request Expedited Reinstatement, they may want to reapply for benefits instead of requesting Expedited Reinstatement. Denial of a reapplication would not affect Medicare entitlement, because the application process uses a different disability standard. The decisions aren't equivalent. For a further discussion of this topic, see the Understanding Expedited Reinstatement briefing paper on the VCU BARC website.
Medicare Premiums During the EPMC
Medicare Part A is premium free for Title II beneficiaries, while Medicare Part B does require that a monthly premium be paid out-of-pocket. Beneficiaries usually pay their Medicare Part B premiums by having them deducted from cash benefits. When no cash benefits are payable, the person receives a bill for Medicare premiums every quarter. It is also possible to have the premiums deducted from a checking or savings account every month. Remember that for someone who has an employer group health plan, or is covered by an employer group health plan from a spouse's work, Medicare is usually secondary coverage. This also applies during the Extended Period of Medicare Coverage (EPMC). Being "secondary" means that the group health plan pays first, then Medicare pays what remains up to Medicare's exclusions for co-payments and deductibles. In these circumstances, people may wish to terminate the Medicare Part B coverage until:
Medicare for the Working Disabled
Throughout the Extended Period of Medicare Coverage, Medicare Part A is free. When the EPMC ends, however, some people may continue Medicare Part A and Medicare Part B by paying premiums for both coverage types. The premium amounts change every year, and can be found on the www.Medicare.gov website. If the person has at least seven and a half years of work covered under Social Security taxes, the Part A premium will be reduced 45%. Individuals with limited income and resources may receive Medicaid assistance towards the cost of the premiums under the Qualified Disabled Working Individual provision. To apply for QWDI Medicare premium assistance, see your State Medicaid agency or the agency responsible for making Medicaid eligibility determinations. In order to purchase Medicare Part B (Supplemental Medical Insurance) after the Extended Period of Medicare Coverage (EPMC), the person must also purchase Part A (Hospital Insurance). Individuals may purchase Part A, the inpatient coverage without purchasing Part B, the Supplemental Medical Insurance (SMI). Medicare is the primary insurance when the Part A premium is paid by the individual.
Benefit Specialist Responsibilities
Extended Medicare is very complex. As a Benefits Specialist, you may neither have enough information about the person's work history, nor sufficient expertise to estimate the end of the Extended Period of Medicare Coverage. In addition, you can't predict the future. Will the person again become entitled to benefits? Will there be a decision of Medical improvement? Will the individual keep working as expected? It is impossible to know which of the 3 EPMC rules would apply to an individual until after the TWP is complete and SGA level employment has caused cessation to occur. The safest bet is to tell beneficiaries currently entitled to Medicare that they will have at least 93-months of Medicare coverage after the end of the Trial Work Period. It is best to leave it to the SSA to determine which EPMC rule applies to an individual. The SSA has the expertise to make the determination quickly and correctly.