In the context of the MSP rules, what determines a small employer size for working-aged individuals?

In the context of the Medicare Secondary Payer (MSP) rules, the determination of a small employer size for working-aged individuals revolves around certain thresholds set by the law. The correct answer, which is that a small employer is defined as having less than 20 employees, is significant for several reasons.

Under MSP regulations, this definition is crucial when assessing the coordination of benefits between Medicare and other employer-sponsored insurance. Employers with fewer than 20 employees are considered small groups, which means that their health plans may not be required to provide primary coverage for employees who are eligible for Medicare. This creates a different set of rules regarding how Medicare interacts with group health plans compared to larger employers, which typically have a mandate to provide primary coverage.

The MSP framework establishes that for employees of larger employers—those with 20 or more employees—Medicare is generally the secondary payer if the individual is still actively working and covered by the employer's health plan. In contrast, for small employers, Medicare functions as the primary payer, which can significantly impact the coverage and financial responsibilities of both the employer and the employee.

Understanding this distinction is important for determining eligibility and coverage rules for working-aged individuals, as it influences their access to healthcare services and the way their insurance benefits