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November 1, 2006

New Tricare Provisions Affect Group Health Plans

Included in the Appropriations Bill recently signed by President Bush (the John Warner National Defense Authorization Act, Public Law 109-364), there are some new secondary payor rules applicable to group health plans.  Specifically, the rules provide that Tricare is secondary to group health plans, excluding plans sponsored by employers with fewer than 20 employees.  In other words, an individual covered by, or eligible for coverage under, Tricare must be given the same rights to participate in the group health plan as the individual not eligible for Tricare. In no way can the employer do anything to incent the individual to decline group health coverage in favor of Tricare.  Significant penalties would be imposed for this kind of action.  This law takes effect January 1, 2008.

 

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations.

As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained in this Benefit Beat is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

 

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