Many employers remain unaware that under Medicare Part D regulations, entities offering prescription drug coverage to Medicare Part D eligible employees and retirees must disclose annually to individuals whether their health plan has creditable or non-creditable prescription coverage. This requirement stems from the fact that Medicare eligible individuals who are not covered by creditable prescription drug coverage and who choose not to enroll before the end of their initial enrollment period, and enroll at a later date, will most likely pay higher premiums. To this end, Centers for Medicare and Medicaid Services (CMS) has issued guidance on this matter over the past few years and have done so through various channels of communication. In addition, our firm has also disseminated information since the inception of this legislation in 2005 and health insurance carriers have also provided additional information on this topic as well. It is our understanding that your plan has been deemed creditable (see standards), but if you have changed your prescription plan or if you are unsure if the creditable standard will still be met, please feel free to contact our office directly for assistance.
NOTE: No action is needed on your behalf if you do not have Medicare Part D eligible individuals. See below for list of included individuals / beneficiaries.
DISCLOSURE TO MEDICARE PART D ELIGIBLE INDIVIDUALS
Who must receive the disclosure Notices?
The disclosure notice (creditable sample) must be provided to Part D eligible beneficiaries (individuals) enrolled in or seeking to enroll in the employer’s prescription drug coverage. This includes the following Part D eligible beneficiaries: Active employees, spouses, dependents, disabled employees, retired employees, individuals eligible for Medicare due to a disability or end stage renal disease. A communication plan may include a general notice to all employees followed by a targeted effort to those individuals you know are affected by Medicare D. It is our recommendation that you provide this information to all employees at your renewal each year as part of the open enrollment process in order to remain in compliance with CMS. Employers may also consider posting a disclosure notice on their intranet, include the notice with their Summary Plan Description (SPD), or include information/updates on this topic within other employee communications.
When must the notices be provided?
At a minimum, Disclosure Notices for creditable and non-creditable coverage must be provided as follows:
- Prior to the Medicare D Annual Coordinated Election Period – October 15th each year.
- Prior to an individual’s Initial Enrollment Period for Part D
- Prior to the effective date of coverage for any Medicare eligible individual that joins the plan
- Whenever prescription drug coverage ends or changes so that it becomes creditable or is no longer creditable
- Upon a beneficiary’s request
NOTE: If you have Medicare Part D beneficiaries and have not provided a disclosure notice in the past, we would recommend you send out the model notice with a short cover letter stating that your plan has been creditable since 2006 and continues to be creditable.
DISCLOSURE TO CENTERS FOR MEDICARE AND MEDICAID SERVICES (CMS)
Entities that provide prescription drug coverage to Medicare Part D eligible individuals must also disclose to CMS whether the coverage is “creditable prescription drug coverage”. This disclosure is required whether the entity’s coverage is primary or secondary to Medicare. The form that needs to be completed and submitted to CMS can be found at www.cms.gov
NOTE: It is important that you provide this note to participants – including COBRA participants – no later than October 15, 2013 to allow them time to file by December 7th, 2013.
Additional information on the creditable coverage disclosure requirements can found at www.cms.gov.