1.0 Policy
1.1 By law,
employers are prohibited from offering financial or other incentives
to certain TRICARE-eligible employees to not enroll in employer-offered
GHPs. The TRICARE prohibition applies in the same manner as employers
are currently prohibited from offering incentives to Medicare-eligible
employees under section 1862(b)(3)(C) of the Social Security Act
(42 United States Code (USC) 1395y(b)(3)(C)). Many employers, including state
and local Governments, have begun to offer their employees who are
TRICARE-eligible a TRICARE supplement as an incentive not to enroll
in the employer’s primary GHP. The purpose of the prohibition on
incentives not to enroll in employer-sponsored GHPs is to prevent
employers from shifting their responsibility for their employees onto
the federal taxpayers.
1.2 For this
prohibition, a TRICARE-eligible employee is a person who is eligible
for TRICARE coverage under 10 USC Section 1086. This essentially
applies to retirees and their family members and does not include dependents
of active duty personnel.
1.3 The term
“group health plan” means a plan (including a self-insured plan)
of, or contributed to by, an employer (including a self-employed
person) or employee organization to provide health care (directly
or otherwise) to the employees, former employees, the employer,
others associated or formerly associated with the employer in a
business relationship, or their families.
1.4 In general,
employers must offer the same health insurance benefits under the
same conditions to TRICARE eligibles that other employees receive.
Certain common employer benefit programs do not constitute improper
incentives under the law.
1.4.1 An employer-funded
benefit offered through an employer’s cafeteria plan would not be
considered an improper incentive, as long as it is not a TRICARE
exclusive benefit. (The cafeteria plan must comply with Section 125
of the Internal Revenue Code.) Employers who offer all similarly
situated employees without regard to TRICARE eligibility a choice
between health insurance and cash payment equivalents are not considered
in violation of the prohibition. Therefore, if a TRICARE beneficiary
elects a cash payment option as a benefit offered via the employer’s cafeteria
plan, then this is not a violation of these provisions.
1.4.2 Health Reimbursement Arrangements
(HRAs) are employer sponsored plans that are generally are classified
as GHPs. Only employers can make contributions to HRAs. If the HRA
is available to and can be used by all similarly situated employees
(not limited to TRICARE beneficiaries), it does not violate this
provision. Further, cash payments or other bona fide fringe benefits
may properly be offered under the McNamara O’Hara Service Contract Act
(SCA) and otherwise in lieu of health care coverage as long as the
employer does not consider TRICARE eligibility when formulating
the cash payment or fringe benefits options.
1.4.3 In general, the law prohibits
employer-endorsed TRICARE supplemental plans as an option for health coverage
under an employer-sponsored GHP to TRICARE-eligible beneficiaries.
A TRICARE supplemental plan cannot be offered as part of a cafeteria
plan because the employer, by endorsing this type of plan, effectively
offers an improper incentive targeted only at TRICARE beneficiaries
for not enrolling in the employer’s main health plan option or options.
1.4.4 These provisions do not impact
TRICARE supplemental plans that are not offered by an employer but are
sold by an insurer and/or beneficiary association working in conjunction
with an insurer. Such non-employer-sponsored TRICARE supplemental
plans continue to be expressly excluded as double coverage under
TRICARE (see the TRICARE Reimbursement Manual (TRM)
Chapter 4, Section 4). TRICARE is the primary
payer and the TRICARE supplemental plan is the secondary payer.
1.4.5 The prohibition on employer
incentives does not include TRICARE supplemental plans when it is properly
documented that the employer does not provide any payment for the
benefit nor receive any direct or indirect consideration or compensation
for offering the benefit; the employer’s only involvement is providing
the administrative support for the benefits under the cafeteria
plan, and the participation of the employee in the plan is completely
voluntary.
1.4.6 The regulation requires documentation
certifying the requirements for a non-contributory TRICARE supplemental
plan is met in cases in which an employer provides that option,
and that the certification will be provided upon request to the
Department of Defense (DoD). In cases in which a question arises
about a TRICARE supplemental plan offered by an employer, this documentation
will provide a simple means to resolve that it was offered within
the authorized exception to the general rule against TRICARE-exclusive
benefits.
1.5 Enforcement
of this prohibition is afforded through civil monetary penalties
not to exceed $5,000 for each violation, investigative authorities
of the Department of Defense Inspector General (DoDIG), recourse
under the Debt Collection Improvement Act, and any other authority
provided by law.