Employers with group health plans need to provide Medicare Part D notices of creditable or non-creditable coverage to Medicare-eligible individuals by November 15, 2009. Employers can satisfy this requirement by including the notice in enrollment materials or in separate mailing during the fall. When preparing materials for distribution this fall, employers should be aware of revised model notices provided by the Centers for Medicare & Medicaid Services (“CMS)”.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 requires group health plans that provide prescription drug coverage to disclose to individuals eligible for Medicare Part D whether their coverage is “creditable.” Basically, prescription drug coverage is considered “creditable” if it is at least actuarially equivalent to (i.e., at least as good as) the Medicare Part D coverage. This disclosure is very important because individuals who do not enroll in Medicare Part D when first eligible and who have gone more than 63 days without creditable coverage generally will have to pay higher premiums permanently when they finally enroll. Thus, individuals need to know the status of their group health plan coverage in order to make an informed decision about enrolling in Part D.
Notices regarding whether prescription drug coverage is creditable or non-creditable must be provided –
- prior to the start of the annual Part D enrollment period (November 15 through December 31 of each year);
- prior to an individual’s initial enrollment period for Part D;
- prior to the effective date of coverage for a Part D-eligible individual who joins an employer plan;
- when an employer’s prescription drug coverage ends or changes status as creditable coverage; and
- upon a beneficiary’s request.
The deadline for providing annual creditable coverage notices this year is November 15.
Revised Notices Posted
Earlier this year, CMS posted revised model notices and updated guidance regarding creditable coverage disclosures. The changes to the model notices and guidance are minimal. CMS recommends, but does not require, that personalized notices be provided upon request to enable individuals to show proof of prior creditable coverage when enrolling in a Part D plan.
What Information is Required in the Creditable Coverage Notification?
The information must explain whether the plan sponsor’s prescription drug coverage is creditable. If the coverage is not creditable, this information must also explain that there are limitations on the periods during the year in which the individual may enroll in a Medicare drug plan and that the individual may be subject to a late enrollment penalty.
What Should Employers Do to Comply with the CMS Rules?
It is important for employers to review their current notices and determine whether any changes or updates need to be made so that they are in compliance with the CMS requirements. If you have any questions in regard to determining whether your group health plan is creditable or non-credible, or in regard to the notice process in general, you should consult your attorney.
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