Group health plan sponsors that offer prescription drug coverage must, at least annually, notify Medicare Part D eligible individuals and the Centers for Medicare & Medicaid Services (CMS) of their plan’s creditable coverage status. Both disclosures (to Medicare Part D eligible individuals and to CMS) must meet specific form, content and timing requirements as prescribed by CMS. This update addresses the required disclosure to CMS and reminds plan sponsors that online disclosure should be completed annually no later than 60 days from the beginning of the plan year. This means that an employer with a calendar year plan that began on January 1, 2021 must complete the CMS online reporting no later than March 1, 2021. (For more information on the Medicare Part D disclosure requirement for individuals, please see our update Medicare Part D Notices Due Before October 15th).
Medicare Part D Notice to CMS Rules Medicare Part D rules generally require that group health plans with a prescription drug benefit must disclose to CMS whether the prescription drug coverage offered is “creditable” or “non-creditable”.
“Creditable” prescription drug coverage generally means the actuarial value of prescription drug coverage under the group health plan is equal to (pays out as much) or better than the prescription drug benefits offered under Medicare Part D.
“Non-creditable” prescription drug coverage is coverage that is actuarially less in value (expected to pay out less) than the coverage offered under Medicare Part D.
This disclosure is required whether the entity’s coverage is primary or secondary to Medicare. A prescription drug plan must use the online CMS Disclosure Form to report its “creditable” or “non-creditable” prescription drug status at the times noted below. Guidance and instructions are provided to assist prescription drug plan sponsors with completing the form.
Disclosure Timing The CMS disclosure must be made annually and whenever any change occurs that affects whether the prescription drug plan’s coverage is creditable. CMS should receive a creditable coverage disclosure:
Within 60 days of the beginning of the plan year for which the disclosure is being reported.
Within 30 days of a change in creditable coverage status.
Within 30 days of the prescription drug plan’s termination.
A group health plan is not required to submit the online disclosure form to CMS for any plan year where the plan does not offer prescription drug benefits to any Medicare Part D eligible individuals as of the beginning of the plan year. Also, plan sponsors approved for the retiree drug subsidy are exempt from filing the CMS disclosure notice with respect to those qualified covered retirees for whom the sponsor is claiming the subsidy. Note that this creditable coverage reporting is in addition to the mandatory CMS Medicare Secondary Payer (MSP) reporting typically handled by an insurer or third-party administrator for a group health plan (see the CMS site on Mandatory MSP Reporting for more information).
Should you have questions about this or any aspect of group health plan requirements, please contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220 with any questions. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.