SAN FRANCISCO, Jan. 5, 2022 – Top risk consultant Sky Wolfe is the latest addition to Newfront, a tech-enabled, full-service brokerage based in San Francisco, CA. As Assistant Vice President and Producer, Sky will serve clients in the Real Estate and Development, Construction, Architects and Engineers, and Manufacturing industries. “We are thrilled to welcome Sky, as we continue expanding […]

Sky Wolfe Joins Fast-Growing Newfront's Northwest Team

Question: What is the employer’s role with respect to the Medicare Form CMS-L564?

Short Answer: Age 65+ employees will often remain enrolled in the employer-sponsored group health plan and delay Medicare enrollment until retirement.  Upon retirement and loss of active coverage, retirees will typically have the employer complete a portion of the Form CMS-L564 to verify key information as part of their Medicare special enrollment period process.

The Employer’s Role: Medicare Form CMS-L564 

Age 65+ employees who follow the common path of delaying Medicare enrollment until retirement generally will apply for Medicare in the special enrollment period (SEP) upon retirement.  As described below, retirees should complete this process for Medicare enrollment immediately after loss of active coverage to avoid any potential coverage gaps.

The Application for Enrollment in Medicare Part B: Form CMS-40B

Retirees applying for Medicare Part B in the SEP will generally do so via Form CMS-40B either by paper (pdf or html) or online through the Social Security Administration.

As part of the application process for the SEP, the retiree will also need to complete the Form CMS-L564 “Request for Employment Information.”  This form is used to document proof of active employer-sponsored group health plan coverage that has ended as a result of the retirement (or other termination of employment/reduction in hours).  

CMS describes the need to complete the Form CMS-L564 with the Form CMS-40B as follows:

If you’re signing up for Part B using a Special Enrollment Period (SEP) because you were covered under a group health plan based on current employment, in addition to this application, you will also need to have your employer fill out and return the “Request for Employment Information” form (CMS-L564/CMS-R-297) with your application. The purpose of this form is to provide documentation to Social Security that proves that you have been continuously covered by a group health plan based on current employment, with no more than 8 consecutive months of not having coverage. 

Medicare.gov includes a useful basic overview of this enrollment process on its “Enrollment Forms” site.

The Request for Employment Information: Form CMS-L564

Retirees applying for Medicare Part B in a SEP after loss of active employer-sponsored coverage will complete the Form CMS-L564 at the same time as the Form CMS-40B.  The Form CMS-L564 is used for proof of group health plan coverage based on current employment (i.e., active coverage), which is needed to process the Medicare enrollment application.

Section A: The retiree completes the first section (Section A) of the form so that the employer can find and complete the information about the retiree’s employment and coverage periods.

Section B: The employer is then responsible for filling in the information in the second section (Section B) and returning to the employee.

Section B asks the employer to answer the following basic questions:

Whether the individual was covered under the employer’s group health plan;

The timeframe that the employee worked for the company.

In the rare situations where the application is based on disability (as opposed to age) or tied to an hours bank arrangement, additional questions apply.

The end of Section B the form directs a “Company Official” to sign the form, including date, title, and phone number.  

The step-by-step instructions at the end of the form itself state that “An official representative of the company needs to sign this document.”  However, the “Special Instructions” section on the page housing the form states “Your employer doesn’t need to sign Section B of the CMS L564 form.”  It’s unclear why this discrepancy exists, but employers generally would want to sign the form in any case to avoid issue.

What Happens if the Employer Does Not Complete Section B of the Form CMS-L564?

In some cases, employers will be inaccessible (e.g., out of business), unable, or unwilling to complete the Form CMS-L564.  While there are no apparent penalties or other avenues of enforcement against the employer for such failures, employers that do not cooperate will place additional burdens and hardship on the retiree.

SSA materials direct retirees to handle this situation as follows:

If your employer is unable to complete Section B of the CMS-L564, please complete that portion as best as you can on their behalf and submit one of the following forms of secondary evidence: 

Income tax returns that show health insurance premiums paid. 

W-2s reflecting pre-tax medical contributions. 

Pay stubs that reflect health insurance premium deductions. 

Health insurance cards with a policy effective date. 

Explanations of benefits paid by the GHP or LGHP. 

Statements or receipts that reflect payment of health insurance premiums.

Ultimately, the Medicare application process is daunting enough for retirees without the need to independently prove the loss of active coverage.  Employers should make all efforts to timely complete Section B of the Form CMS-L564 for the retiree to facilitate the enrollment process for the retiree as much as possible.

General Rule: Medicare Enrollment at Age 65 or Upon Retirement

Employees who continue working beyond age 65 often face the choice of whether to enroll in Medicare, stay in the employer-sponsored group health plan, or both. 

One option would be for employees who reach age 65 to enroll during the seven-month Initial Enrollment Period (IEP) upon first becoming eligible for Medicare based on age.  This IEP begins three months before the month of reaching age 65, includes the month of the 65th birthday, and ends three months after the month of reaching age 65.

However, the Medicare Secondary Payer (MSP) rules provide significant flexibility for employees in this decision.  The MSP rules for Medicare entitlement based on age (i.e., reaching age 65) apply to employers with 20 or more employees for each working day for at least 20 calendar weeks in either the current or preceding calendar year.

In general, the MSP rules prohibit the employer-sponsored group health plan from taking into account the Medicare enrollment of a current employee or a current employee’s spouse or family member.

There are a number of basic rules that flow from this general principle, including:

For any active employee or family member covered by the employer-sponsored group health plan and Medicare, the employer-sponsored group health plan pays primary.

The employer-sponsored group health plan must provide the same benefits under the same conditions to employee and family members who are Medicare-eligible.

The MSP rules prohibit offering employees or family members eligible for Medicare any additional financial or other incentives (e.g., opt-out credits) beyond those made to other pre-65 employees to waive the employer-sponsored group health plan.

As a result, most age 65+ employees choose to remain in the employer-sponsored group health plan and delay Medicare enrollment until retirement.

Medicare Secondary Payer Employer Size Requirements

MSP Prohibition of Incentives for Active Employees to Enroll in Medicare

Another factor motivating many age 65+ employees to delay Medicare enrollment until retirement is the ability to make and receive HSA contributions.  Enrollment in any part of Medicare is disqualifying coverage that causes an individual to lose HSA eligibility.  Even enrollment in only the (generally premium-free) Medicare Part A hospital coverage component will block HSA eligibility.  However, many employees age 65 and older who are enrolled in the HDHP continue to be HSA-eligible by delaying Medicare enrollment.

Avoid COBRA: Age 65+ Retiree Medicare Enrollment Without Coverage Gap or Penalties

When age 65+ employees follow the more common approach of delaying Medicare enrollment until retirement, they generally will need to enroll in Medicare immediately following the loss of active employer-sponsored coverage to avoid multiple issues.

The Eight-Month Medicare Special Enrollment Period is Not Extended by COBRA Enrollment

Medicare-eligible employees qualify for an eight-month Medicare special enrollment period (SEP) upon retirement (or any termination of employment) that begins the earlier of the month after employment ends or the month after active coverage ends.  

COBRA Does Not Qualify to Avoid Part B Late Enrollment Penalties

To align with the eight-month SEP, retiring employees also have an eight-month period to sign up for Medicare Part B without a late enrollment penalty.  Failure to enroll in Part B during the eight-month special enrollment period after losing active coverage will result in a late enrollment penalty of up to 10% for each full 12-month period late.  In most cases, this late enrollment penalty increase to the Part B premium will remain in effect for as long as the individual maintains Part B coverage.

There are a number of key points to be aware of with respect to the eight-month SEP and avoiding late enrollment penalties, including:

COBRA coverage (including subsidized COBRA) does not extend the start date of the eight-month SEP.  The SEP begins to run regardless of COBRA enrollment.

COBRA coverage (including subsidized COBRA) also does not qualify to avoid late enrollment penalties after the eight-month SEP.

Failure to enroll in Part B during the eight-month SEP—regardless of COBRA enrollment—will therefore result in a late enrollment penalty for as long as the individual has part B, and the inability to enroll in Part B until January 1 – March 31 (which may cause a significant coverage gap).

Medicare Pays Primary (COBRA Assumes Primary Medicare Payment—Even If Not Enrolled!)

Perhaps the most significant reason a post-65 retiree should avoid relying solely on COBRA for any period is that COBRA will likely provide only secondary coverage.  In general, the MSP rules require that the employer-sponsored group health plan always pay primary to Medicare for individuals in “current employment status,” which applies to active coverage.  

However, retirees enrolled in COBRA are not receiving employer-sponsored coverage based on “current employment status.”  In other words, they are not enrolled in active coverage.  This means that Medicare pays primary for anyone enrolled in COBRA.

In the COBRA context where the MSP rules do not apply and Medicare is primary, the plan can assume the Medicare payment rate and pay only as secondary coverage for any individual who is eligible for COBRA.  This is true regardless of whether the individual is actually enrolled in Medicare.

For example, if an individual’s services would have been covered primary by Medicare if the participant were enrolled in Part B, COBRA coverage can pay only the amount that a secondary plan would pay.  For individuals not enrolled in Part B, that leaves the amount that would have been paid by Part B as a coverage gap for which the participant is responsible.

Medicare-eligible retirees will therefore never want to be in a position where they fail to enroll in Medicare while enrolled in COBRA under a plan that assumes the Medicare primary payment rate regardless of actual Medicare enrollment.

The COBRA/Medicare Timing “Geissal” Rule

In the rare situation where a retiree is interested in maintaining both Medicare and COBRA, the retiree needs to be aware the COBRA can terminate early if the retiree enrolls in Medicare after electing COBRA.

The timing piece means that a retiree who enrolled in Medicare prior to electing COBRA will not be subject to early termination of COBRA because of the Medicare enrollment.  In other words, retirees who want to have Medicare and remain on COBRA must be careful to enroll in Medicare prior to electing COBRA.

This timing rule stems from the 1998 U.S. Supreme Court case Geissal v. Moore Med. Corp., which is the only U.S. Supreme Court case to address COBRA rights.  Since the U.S. Supreme Court’s ruling, the IRS has updated the COBRA regulations to confirm that only enrollment in Medicare after electing COBRA can cut short the qualified beneficiary’s COBRA rights (Treas. Reg. §54.4980B-7, Q/A-3).

Summary: Employers Complete a Portion of the Form CMS-L564 Upon Age 65+ Retirement

Employees who do not enroll in Medicare upon reaching age 65 should enroll in Medicare upon retirement.  This enrollment during the SEP will include the Form CMS-L564 that is used for proof of group health plan coverage based on current employment (i.e., active coverage).  The retiree will have the employer complete Section B with some basic information addressing the retiree’s periods of employment and health plan coverage, which is needed to process the Medicare enrollment application.

Post-65 retirees not already enrolled in Medicare will in almost all situations want to enroll in Medicare immediately upon losing active coverage because COBRA coverage alone typically is not a viable option.  COBRA enrollment has multiple downsides, highlighted by that fact that it generally will provide only secondary coverage (regardless of Medicare enrollment).  Furthermore, COBRA will not extend the eight-month Medicare special enrollment period or qualify to avoid late enrollment penalties.  

In some rare situations a retiree may consider enrolling in both Medicare and COBRA.  That would generally not be the financially prudent approach compared to enrollment in Medicare with a Medicare Supplement plan (or Medicare Advantage), but there may be network-driven reasons why a retiree would consider it.  In that situation, the retiree should keep in mind that the Medicare enrollment must occur prior to electing COBRA.

How COBRA and Medicare Interact for Retirees

Early Termination of COBRA Upon Enrollment in Other Group Health Plan or Medicare

Can I enroll in Medicare instead of COBRA continuation coverage after my group health plan coverage ends?

In general, if you don’t enroll in Medicare Part A or B when you are first eligible because you are still employed, after the initial enrollment period for Medicare Part A or B, you have an 8-month special enrollment period to sign up, beginning on the earlier of

The month after group health plan coverage based on current employment ends.

If you don’t enroll in Medicare Part B and elect COBRA continuation coverage instead, you may have to pay a Part B late enrollment penalty and you may have a gap in coverage if you decide you want Part B later.  If you elect COBRA continuation coverage and then enroll in Medicare Part A or B before the COBRA continuation coverage ends, the Plan may terminate your continuation coverage.  However, if Medicare Part A or B is effective on or before the date of the COBRA election, COBRA coverage may not be discontinued on account of Medicare entitlement, even if you enroll in the other part of Medicare after the date of the election of COBRA coverage.

If you are enrolled in both COBRA continuation coverage and Medicare, Medicare will generally pay first (primary payer) and COBRA will pay second.  Certain COBRA continuation coverage plans may pay as if secondary to Medicare, even if you are not enrolled in Medicare.

For more information visit https://www.medicare.gov/medicare-and-you.

Disclaimer: The intent of this analysis is to provide the recipient with general information regarding the status of, and/or potential concerns related to, the recipient’s current employee benefits issues. This analysis does not necessarily fully address the recipient’s specific issue, and it should not be construed as, nor is it intended to provide, legal advice. Furthermore, this message does not establish an attorney-client relationship.  Questions regarding specific issues should be addressed to the person(s) who provide legal advice to the recipient regarding employee benefits issues (e.g., the recipient’s general counsel or an attorney hired by the recipient who specializes in employee benefits law).

Newfront's Brian Gilmore explores employers' roles with respect to the Medicare Form CMS-L564.

The Medicare Form CMS-L564 for Employers

For Newfront’s John McCall, innovation is key when it comes to complex situations for his client—and his bespoke solutions have had an impact across the insurance industry, especially for companies going through de-SPAC transactions.

That’s why Risk & Insurance® named John, Financial Institutions & Fintech Practice Leader for Newfront, a 2023 Financial Services Power Broker®. The Power Broker awards are an annual selection of the most effective and influential commercial insurance brokers.

“John has a reputation for identifying and building novel options that meet clients’ needs and lead the broader insurance industry forward in a positive way,” says Deirdre Finn, the Practice Leader of the Executive Risk Solutions (ERS) team at Newfront.

This summer, John worked with a multi-billion-dollar valuation client that went public via merger with a de-SPAC. John and his public Directors & Officers (D&O) team heard about excess carriers taking coverage positions that were contrary to the primary carrier’s position, even stating that there was no coverage for the claims when they were deemed covered under the primary policy. John and his team created an industry-driven solution, collaborating with every head of underwriting, legal, and claims at each of the 25+ carriers on the program over the course of three months. The work underwent 30+ iterations as they built true industry consensus and partnership on the issue they were trying to solve for the sake of all clients and carriers in a de-SPAC claim scenario. This resulted in a solution that ultimately transformed coverage and claims handling for D&O insurance that can be applied to any de-SPAC transaction going forward.

John’s solution-driven thinking has actually changed outcomes for other Newfront clients, too. “We've already repeated it for another client that I have zero involvement with,” John says. “That's the beauty of how we're set up as an organization: we can take good work, and then repeat it ten more times for another ten clients down the road.”

This network effect led to tangibly better outcomes for scores of clients dealing with de-SPAC claim scenarios. John’s approach is one that resonates. “Not only are we saving our client millions of dollars on the front end every day, but most importantly, we are saving our client millions of dollars when it comes to recovery,” he says. “We're not waiting for a bad situation to happen and learning the hard way. We're learning proactively by listening to our environment and leveraging our relationships with our network.”

Culture-focused, John prides himself on developing a world-class team to provide thoughtful guidance and individualized programs to meet and support the goals of his clients. 

“He knows that no client is the same as the next,” Deirdre says.

Congratulations to John, along with Shantelle Cabir, Cameron Lock, and Erik Stenson, who were all named to the 2023 Power Brokers program. Additionally, we want to congratulate our other team members that were finalists for the Power Broker designation:

A Risk & Insurance Power Broker® is an individual who stands out among their peers for the exceptional client work they delivered over the past year. While brokers play many key roles in the insurance industry and risk profession, a Power Broker® award recognizes problem solving, customer service and industry knowledge. The Power Broker awards program is a way to broadly recognize and promote outstanding risk management and customer service among the brokerage community.

Power Brokers are selected by risk managers based on the strength of the testimonials they provide to a team of 15 Risk & Insurance editors and writers.

Risk & Insurance recently named John McCall a Power Broker. Read more about his innovative approach.

Meet John McCall, a Newfront 2023 Financial Services Power Broker

Silicon Valley Bank (SVB) customers may be breathing easier now that the Federal Deposit Insurance Corporation (FDIC) announced it is protecting all deposits, but companies and individuals are still reeling from the closure and associated impacts. Now is the time to explore the best way to protect your assets should another financial institution catastrophe occur. Here are the top five considerations Newfront recommends when it comes to insurance and bank failures:

Understand your Directors & Officers (D&O) coverage. Many are asking if their D&O policies will provide coverage if their companies are unable to make payroll. Unfortunately, D&O policies exclude wage and hour claims, as do most Employment Practices Liability policies. “However, D&O coverage could potentially be triggered when a wrongful act is alleged,” says Deirdre Finn, the Practice Leader of the Executive Risk Solutions (ERS) team at Newfront. “If an employee, shareholder, or vendor claims that the company mismanaged their financial resources with respect to the FDIC insurance limit of $250k, there would be the potential for coverage under the D&O policy.”


Review your Financial Services Errors & Omissions (E&O) insurance. Financial institutions or fintech companies that touch client money (such as neobanks, non-bank lenders, or investment advisors) and who buy Financial Services E&O insurance should review the Counterparty Insolvency Exclusion. “No off-the-shelf policy is the same with respect to coverage or policy wording in this line of insurance,” explains Pat McChrystal, Senior Vice President & Financial Institutions Team Leader at Newfront. “These are highly negotiable contracts where who your insurance broker is can really make all of the difference between a claim being denied and millions in recovery.” Custom solutions are critical to ensuring your insurance program aligns with business’ activities and services, risk tolerance, and commensurate exposures. Newfront is dedicated to creating strategies and solutions that keep your assets, clients, and employees safe.


Understand your business interruption coverage. While business interruption insurance under a Property policy can cover loss of income due to a slowdown or suspension of operations, coverage is triggered by a loss to physical property. In a Cyber insurance policy, business interruption intends to cover loss of income after a privacy or security breach impacts a business. Coverage under either policy is unlikely to be triggered by what occurred with SVB. “Coverage is subject to the terms and conditions of the individual policies,” says Tracy Tenorio, Senior Vice President and Practice Leader. “If an insured suffers a loss, we make sure to look at potential avenues for coverage across all policies.”


Be aware of the different cyber attacks that are common after these exposures. Cyber attacks aren’t limited to phishing. “Spoofed websites can also be a concern,” says Arturo Perez-Reyes, Lead Cyber Strategist for Newfront. “After the Equifax breach and during COVID lockdown, many hackers created fake websites encouraging consumers to enter sensitive information and even change their wiring instructions to send through this spoofed site.” See more tips on how to avoid wire fraud and associated concerns here.


Schedule time with your insurance broker and risk team to review all your coverage and potential needs. “Involving third parties can be incredibly beneficial in establishing and maintaining a successful risk management program,” says John McCall, Financial Institutions & Fintech Practice Leader for Newfront. “Your insurance broker should be able to assist in developing strategies and solutions that keep your company, customers, and employees safe.” 

Contact your Newfront representative today to explore these considerations, or schedule a consultation below. 

Newfront provides five considerations for protecting your assets around bank closures.

Newfront’s Guide to Bank Closures and Insurance: Five Considerations for Protecting Your Assets

It was impossible to watch the Silicon Valley Bank (SVB) news without giving a thought to cybersecurity. It’s no surprise that some media have raised concerns of a surge in cyber attacks in the coming days and weeks. Notably because thousands of changes to wire transfer instructions have taken place across the financial ecosystem as a result of the FDIC takeover of SVB and Signature banks. The suddenness of these recent events has handed cyber attackers a perfect opportunity to exploit uncertainty. Think about phishing emails in particular. They often pose as known associates of their target, request sensitive information via email, and often request a change to banking details. It would be easy to mistake one for a legitimate set of wire transfer instructions. 

So how can clients and companies shield themselves from debilitating cyber attacks particularly in moments like these? Here are a few topline recommendations. 

Expect an increase in funds transfer fraud attempts. Some attempts will pose as internal requests, while others will pose as external requesters. The most common kind of cyber attacks are impersonation frauds. Criminals impersonate people but also websites. If you haven’t already, set up phishing training for your staff. Most cybersecurity insurers offer it. Encourage vigilance among employees and try to establish a heightened awareness of security risk. 

Implement Proactive Risk Management Strategies 

When vendor and other internal and external financial requests arrive in your inbox, it’s critical to verify the authenticity of the requests in a couple of different ways. First, find your vendor’s phone number and call them to verify the request. But never use the phone number in the suspicious email and don’t click on links. Second, introduce dual control and segregation of duties. These techniques ensure that no one person can complete a transaction like a wire transfer without a second person’s authorization. They effectively decentralize control of a system or process to limit the risk of fraud and errors. If you already have taken these steps, then lower the threshold that triggers dual authorization. 

Despite our best efforts, hacks happen and losses are incurred. Reread your cyber-insurance policy and talk with your broker about the terms and conditions of the policy. Find out what is covered and what isn’t. Evaluate the impact of large scale financial events of this kind to see if they present any exposure to risk for your business. This knowledge will inform your response should there be an attack. 

In the wake of the SVB events, caution is the bottom line. Social engineering fraud including phishing attacks may rise in coming weeks. Take steps to mitigate risk and evangelize cybersecurity with your team. With your employees on alert and receiving ongoing training, the threats of cyber fraud are reduced.  

Newfront is transforming the delivery of risk management, employee experience, insurance, and retirement solutions by building the modern insurance platform. Transparent data delivered real-time translates into a lower total cost of risk and greater insights. Newfront makes insurance work for you. Headquartered in San Francisco, Newfront has offices throughout the country and is home to more than 850 employees who serve clients across the United States and globally.

Newfront provides recommendations on how to protect against risk of wire fraud.

Newfront | Wire Fraud Alert

The Risk & Insurance® Power Broker® Awards are an annual selection of the most effective and influential commercial insurance brokers. On February 27th, Risk & Insurance announced that when it comes to the financial services space, Cameron Lock is a true Power Broker. 

Cameron’s work stands out in the financial services space because of his creativity and determination to arrive at the best insurance outcome for his clients. It’s not easy to understand the intricacies of cryptocurrency, DeFi, the blockchain, and the many other potentially game-changing arrivals in financial services. But to continue to be an expert in a sector that’s evolving as rapidly as finance, Cameron has put in many hours of learning.

Last year, Cameron used that rare combination of insurance and fintech expertise to deliver an amazing outcome for a client. The client—a global technology company—uses cryptocurrency and blockchain technology to enable their clients to secure real-time liquidity transactions. However, due to general misconceptions about crypto, the P&C program was becoming increasingly difficult to insure. Cameron advocated for and convinced carriers to write coverage, reclassify the business’s industry sector, and even saved them money along the way. 

Cameron believes that excellent client service and open communication are essential in the insurance industry. He treats each client as if they’re his only one—dedicating extra time and effort to ensuring they understand their coverages and contracts. He sees his role as a consultant and a stakeholder in their risk-management strategy and also prioritizes making their insurance needs seamless and streamlined. 

“When it comes to working with clients in the technology-based sectors, I feel like the old idiom that ‘money is time’ is 100% true,” he says. “These clients are used to working hyper-efficiently on tight timelines so I make sure they're getting exactly what they need as quickly as possible.”

Cameron is a staunch advocate, whether in dealing with difficult negotiations on their behalf or innovating the best insurance solutions to meet their needs. That’s why Risk & Insurance named him a 2023 Power Broker.

Congratulations to Cameron, along with Shantelle Cabir, John McCall, and Erik Stenson, who were all named to the 2023 Power Brokers program. Additionally, we want to congratulate our other team members that were finalists for the Power Broker designation:

Risk & Insurance recently named Cameron Lock a top financial services insurance broker. Read more about his creative approach.

Sky Wolfe Joins Fast-Growing Newfront's Northwest Team

Newfront

Recommended reading

The Medicare Form CMS-L564 for Employers

Meet John McCall, a Newfront 2023 Financial Services Power Broker

Newfront’s Guide to Bank Closures and Insurance: Five Considerations for Protecting Your Assets

Newfront | Wire Fraud Alert

Meet Cameron Lock, a Newfront 2023 Financial Services Power Broker