To All DSRA Benefit Trust Enrollees with a Qualified Family Member
The purpose of this communication is to review the eligibility duration limits for both the Health Coverage Tax Credit (HCTC) and the DSRA Benefit Trust subsidy provided for the retiree’s Qualified Family Members (QFM). Spouse and dependents claimed on retiree’s tax return are considered qualified family members. The HCTC regulations governing QFM eligibility have generally always limited the younger spouse and other dependents eligibility to a maximum of 2 years once the retiree reaches Medicare eligibility. The Trust has always followed a plan to increase the “combined subsidized” retiree vs. spouse age gap window by another 2 years for a total of 4 years. The Trust cannot match the magnitude of the amount of the HCTC premium subsidy, but our goal was to soften the blow from the loss of the HCTC. Based on age data of our enrollees, it was determined that 4 years of combined subsidy assistance would cover more than 90% of our affected enrollees.
For 2018, eligibility for a subsidy is as follows:
- HCTC Subsidy: In most situations, pre-65 QFM’s are covered for up to 24 months by the HCTC starting with the month the retiree is eligible for Medicare. This period of eligibility is usually in effect when the retiree is age 65 and 66. The QFM HCTC eligibility normally ends the first of the month the retiree turns 67. It is the responsibility of the retiree and the enrollee to discontinue the HCTC subsidy upon expiration of the 2-year eligibility window. Neither the IRS or BCBSM will monitor your month to month HCTC eligibility. This understanding is especially important for those that are using the Advance Monthly Payment Process provided by the IRS.
- DSRA Benefit Trust Subsidy: Each family of a pre-April 2, 2009 salaried retiree is eligible for the $370/month Trust subsidy for a maximum of 24 months while the QFM’s are under the age of 65. Eligibility for the Trust provided subsidy begins the month following the cessation of the IRS administered HCTC QFM subsidy. You cannot receive both the HCTC and the Trust subsidy for the same month. The enrollee must complete a new BCBSM enrollment form specifically requesting the subsidy. The Trust subsidy is paid from the DSRA Benefit Trust funds for eligible QFM’s if the salaried retiree is either age 67 or 68. Eligibility for the Trust subsidy ends the first of the month the retiree achieves age 69, or the QFM achieves their 65th birthday or goes on Medicare themselves. BCBSM should automatically update your invoice to the full premium amount for the month the retiree achieves age 69. Your plan and coverages will remain the same.
Looking ahead to the 2019 plan year, if you will lose eligibility for either the Trust subsidy or the HCTC during 2019, please keep the premium cost under consideration this November during Open Enrollment. If you feel it is in your best interest to change plans as a result of either of these events, BCBSM has agreed to call both of these situations a “qualifying event” and allows you 30 days to change plans mid-year.
DSRA Benefit Trust