Group health plan (GHP) sponsors that offer prescription drug (Rx) 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 January 1, 2023, must complete the CMS online reporting no later than March 1, 2023, and an employer with a plan year that begins July 1, 2023 must complete the reporting no later than August 29, 2023. (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 GHPs with an Rx benefit must disclose to CMS whether the Rx coverage offered is “creditable” or “non-creditable.” “Creditable” Rx coverage generally means the actuarial value of Rx coverage under the GHP is equal to (pays out as much) or better than the Rx benefits offered under Medicare Part D. “Non-creditable” Rx 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. An Rx plan must use the online CMS Disclosure Form to report its “creditable” or “non-creditable” Rx status at the times noted below. Guidance and instructions are provided to assist Rx plan sponsors with completing the form.
The CMS disclosure must be made annually and whenever any change occurs that affects whether the Rx 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 Rx plan’s termination.
A GHP is not required to submit the online disclosure form to CMS for any plan year where the plan does not offer Rx 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 GHP (see the CMS site on Mandatory MSP Reporting for more information).
Should you have questions about this or any aspect of GHP 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.