Panel defers bill aimed at preventing Medicare from becoming primary for reemployed state retirees amid federal-preemption concerns

The House Insurance Committee on April 15 voluntarily deferred House Bill 771 after agency officials told members that federal Centers for Medicare & Medicaid Services rules determine whether Medicare is primary or secondary for reemployed retirees and that federal law likely preempts state action.

Representative Taylor, the bill’s sponsor, said the intent is to avoid penalizing retirees who return to state employment and to grandfather their group-benefit rates. The committee adopted a clarifying amendment to reflect the author's intent that Medicare remain secondary when a retired person returns to work.

Keith Williams of the Office of Group Benefits clarified on the record that the primary/secondary rule in question is a federal CMS rule and that when a retired employee returns to a benefits-eligible position, OGB observes a change in coverage status that can raise premiums. Franco Palka (Department of Insurance) told the committee the bill would attempt to overturn or conflict with federal law and that federal preemption could make the state statute inapplicable.

Given those unresolved legal questions, Representative Phelps moved and the committee agreed to defer HB 771 to next week so the author could obtain the cited federal guidance and return with additional information.