Plans may choose to offer some benefits to enrollees in addition to, as supplemental to, the covered Medicare Parts A, B or Part D benefits they are required to offer if the item or service also meets the criteria described under “What are Supplemental Benefits?”
Supplemental benefits are further classified as either mandatory or optional:
• Mandatory supplemental benefits are benefits not covered under Part A, Part B, or Part D that are covered by the MA plan for every person enrolled in the MA plan. Mandatory supplemental benefits are paid for either in full, directly by, or on behalf of, MA enrollees by premiums and cost-sharing, or through the application of rebate dollars. An MA MSA plan may not provide mandatory supplemental benefits.
• Optional supplemental benefits are benefits not covered under Part A, Part B, or Part D that are offered uniformly by the plan to all enrollees. Enrollees may choose to pay extra to receive coverage under the optional supplemental benefit. The optional supplemental benefit is paid for directly by the enrollee or on behalf of the enrollee through an additional premium and cost-sharing. Plans may offer their enrollees a group of services as one optional supplemental benefit, offer optional supplemental services individually, or offer a combination of group and individual optional supplemental services. Each plan enrollee chooses whether to elect and pay for any particular optional supplemental benefit as offered under the plan.
Rebate dollars may not be applied toward optional supplemental benefits. An MA plan may not offer as an optional supplemental benefit reduced cost-sharing for Original Medicare benefits (42 CFR § 422.102). An MA plan may not list a dual eligible beneficiary’s State Medicaid wraparound benefits as either a mandatory or optional supplemental benefit.MA MSA plans are permitted to offer optional supplemental benefits, provided that the MSA plan does not offer an optional supplemental benefit that covers expenses that count toward the annual MSA deductible.
Optional supplemental benefits must be offered: (1) at the beginning of the contract year to all Medicare beneficiaries enrolled in the plan, and (2) at the time of initial enrollment to new enrollees who enroll during the contract year. The MA plan may then:
- Continuously offer each optional supplemental benefit uniformly to all enrollees for the remainder of the contract year; or
- Choose to place a time limit of at least 30 consecutive days starting from the enrollee effective date during which a new enrollee can select any particular optional supplemental benefit offered by the MA plan. After the enrollee’s 30-day selection period ends, the optional benefits may be closed to that enrollee for the rest of that contract year during which the beneficiary remains continuously enrolled.
Although MAOs may limit the availability of optional supplemental benefits to current enrollees as described above, enrollees may voluntarily drop or discontinue optional supplemental benefits at any time during the contract year upon proper advance notice to the MAO. An enrollee who drops an optional supplemental benefit through proper advance notice as determined by the MAO – typically 30 days – need not pay further monthly premiums for the optional supplemental benefit. Furthermore, if s/he paid a complete annual premium for the optional supplemental benefit, s/he is entitled to a pro-rated refund of unpaid premium for the remaining portion of the year.