Medicare Part D notice must be provided to employees by October 15, 2018. Here’s everything you need to know.
Every year, Medicare Part D requires employers, as group health plan sponsors, to disclose to employees eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether prescription drug coverage on the employer’s health plan is creditable. It’s required that this this information be disclosed to eligible individuals by October 15, 2018. This marks the beginning of annual enrollment for Medicare Part D.
How do you do it?
Disclosures to CMS must be made on an annual basis or any time that a change occurs that impacts whether the prescription drug coverage is creditable. Employers should confirm whether prescription drug coverage on their health plan is creditable or non-creditable. Medicare Part D disclosure notices should be prepared for sending before October 15, 2018. To streamline the process, it helps to include the Medicare Part D notice in open enrollment packets that are provided to employees prior to October 15, 2018.
What is creditable coverage and who is eligible?
Prescription drug coverage is considered creditable if the actuarial value equals or exceeds the value of standard Medicare Part D prescription drug coverage. Actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit.
This creditable coverage disclosure notice must be provided to employees who are eligible under Medicare Part D and are covered by, or apply for, prescription drug coverage under the employer’s group health plan. An individual is considered eligible under Medicare Part D if the employee is entitled to Medicare A or enrolled in Medicare Part B, or if the employee lives in the service area of a Medicare Part D Plan.
Dates and Deadlines
At the minimum, the disclosure notice for CMS creditable coverage must be provided at the following times:
- Prior to the annual coordinated election period for Medicare Part D. This year that’s October 15 thru December 7;
- Within 60 days following the start date for the plan year;
- Within 30 days following the termination of the prescription drug plan;
- Within 30 days following any change in the creditable coverage status of a prescription drug plan;
- Prior to an individual’s initial enrollment period for Medicare Part D;
- Prior to the effective date of coverage for any eligible individual that joins the plan;
- When prescription drug coverage ends or any major change that impacts whether its creditable occurs; or
- Upon the request of the beneficiary.
How to Deliver
Plan sponsors have three options in how they may provide their creditable coverage disclosure notices.
- Disclosures notices may be provided separately;
- Disclosure notices can be provided with other plan participant materials, if certain conditions are met; or
- Disclosure notices can be sent electronically.
Generally, a single notice may be provided to the covered individual and all of his eligible dependents covered under the same plan. However, if any spouse or eligible dependent lives at a different address than where the participant materials were mailed, a separate notice must be provided.
CMS has indicated that health plan sponsors may use electronic disclosure under the Department of Labor (DOL) regulations. These regulations permit a plan sponsor to provide a creditable coverage disclosure notice electronically to plan participants that can access electronic documents at their place of work, provided that they have access to the sponsor’s electronic information system as part of their regular, daily work duties.
The DOL also requires that the plan sponsor use appropriate and reasonable means to ensure that the information is being properly transmitted and received; that notice is provided to the plan participants on the significance of the document; and that a paper version of the document is available upon request.
Additionally, if a plan sponsor opts to use electronic delivery, the sponsor must inform the plan participant that they are responsible for providing a copy of the electronic document to their eligible dependents covered under the plan.
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