CMS Pub. 100-16, ch. mc86c17b, § 340.2

A Medicare cost-based HMO/CMP, in making a decision as to whether Medicare is

primary or secondary, must be aware of the definition of these terms:

• Employed, for purposes of this discussion, encompasses not only employees. It

also includes, subject to the special rules in this chapter, self-employed persons

such as consultants, owners of businesses, directors of corporations, and members

of the clergy and religious orders who are paid for their services by a religious

body or other entity.

• Employer means, in addition to individuals and organizations engaged in a trade

or business, other entities exempt from income tax such as religious, charitable,

and educational institutions, the governments of the United States, the individual

States, Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern

Mariana Islands, and the District of Columbia, and the agencies, instrumentalities,

and political subdivisions of these governments.

• EGHP for the working aged means any health organization that is paid for by or

contributed to by an employer of 20 or more employees and which provides

medical care, directly or through other methods, such as insurance or

reimbursement, to current or former employees or to current or former employees

and their families. This includes a multi-employer plan (i.e., a plan sponsored

jointly by employers and unions) and a multiple employer plan (i.e., a plan

sponsored by more than one employer) which is sponsored by or contributed to by

at least one employer that has 20 or more employees. Under §1862(b)(1)(A)(iii)

of the Act, if a multi-employer plan or multiple EGHP can identify particular

enrollees as employees of employers that do not meet the 20-employee threshold,

the MSP rules do not apply to these enrollees and their spouses. However, the

organization must elect this treatment for the exception to apply.

The Federal Employees Health Benefits (FEHB) program meets the definition of

an EGHP. Employees that pay all plans, i.e., group health plans under the

auspices of an employer which do not receive any contribution from the

employer, also meet the definition of an EGHP.

Assume, in the absence of evidence to the contrary, that any health plan

(including a union plan) in which a beneficiary is enrolled because of the

beneficiary’s or the beneficiary’s spouse’s employment meets this definition.

NOTE: Medicare is secondary to EGHP coverage only if the EGHP coverage is by

reason of the employee’s current employment. Health insurance plans for

retirees or the spouses of retirees do not meet this condition and are not primary

to Medicare.

Multi-Employer Group Health Plan and Multi-Employer Plan are terms that refer to a

multiple employer plan, which is a plan sponsored by more than one employer, or a

multi-employer plan, which is sponsored jointly by employers and unions.