MSP Penalty Summary
| Violation | Penalty |
|---|---|
| Employer plan improperly makes Medicare primary | $1,000/day per violation + double damages |
| Section 111 reporting failure | $1,000/day per violation |
| Offering Medicare-eligible employees lesser benefits | $1,000/day per violation |
| Offering financial incentives to opt out of employer plan | $1,000/day per violation |
Double Damages
An employer plan that improperly makes Medicare the primary payer for an active employee can be liable for double damages — twice the amount Medicare paid that should have been paid by the employer plan. Medicare can sue the employer plan directly to recover these damages. Double damages can be substantial for employees with significant medical claims.
Proactive Compliance
IQ Insight
Proactive MSP compliance — accurate Medicare-eligible employee tracking, proper coordination of benefits, and timely Section 111 reporting — prevents most MSP violations. Build MSP compliance into your annual benefits compliance calendar. Conduct an annual MSP audit to identify any coordination errors and correct them before they result in penalties.