Group health plan sponsors that provide prescription drug coverage to Medicare Part D eligible individuals must notify these individuals whether such coverage is creditable or non-creditable. Creditable coverage means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage. For these purposes, group health plans include health plans as defined under ERISA, including certain account-based medical plans, as well as group health plans sponsored for employees or retirees by unions, churches, and federal, state or local governments. The notice requirement applies to insured and self-funded plans, regardless of plan size, employer size or grandfathered status.
Notice must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under a prescription drug plan and any retirees and their dependents. The Medicare Part D annual enrollment period runs from October 15 to December 7. The notice must be provided annually, before the enrollment period begins (i.e., by October 14), and at various other times as required under the law, including to a Medicare eligible individual when he/she joins the plan. Model Part D Notices are available from the Centers for Medicare & Medicaid Services (CMS). A late enrollment penalty is imposed on individuals who do not maintain creditable coverage for a period of 63 days or longer following their initial enrollment period for the Medicare prescription drug benefit. Accordingly, this Medicare Part D notice information is essential to an individual’s decision whether to enroll in a Medicare Part D prescription drug plan. See our Update for more information on this important Medicare Part D notice requirement.
A related disclosure rule requires that sponsors complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. This online disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. See our Update for more information on this requirement.
For a list of entities subject to the Medicare D disclosure requirement, see CMS’ Entities Required To Provide Disclosure To All Medicare Eligible Individuals. All size employers offering prescription drug benefits are subject to these rules as there is no exception for small employers. See the CMS Creditable Coverage web page for general Part D notice guidance for employer and union-sponsored plans.
Should you have questions about this or any aspect of group health plan requirements, contact your Conner Strong & Buckelew account representative toll free at 1-877-861-3220. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.