Q. I have a group that is right on the cusp of the 20-employee threshold. For the prior year this group is clearly over the 20 person threshold. For the current year, we are unsure when we would report a change in the number of employees. For example, if the employee count in the 20 weeks between Feb. 1 and Aug. 1 drops to 19 and that is reported to the insurance carrier, when does Medicare become primary?
A. The application of the 20 employee limit is confusing. If an employer has 20 or more employees for each working day for 20 or more calendar weeks in the prior or current year, they are subject to the Medicare Secondary Payer (MSP) rules. So, if an employer meets the test in 2022, they will be subject to MSP rules for all of 2023. If an employer reaches large group status for the first time in 2023, the group is subject to the rules on the date it satisfies the 20 or more employees for 20 calendar weeks. From that point until the rest of the year, and the following year, the employer will be subject to the MSP rules regardless of whether they drop below 20 employees after meeting the threshold.