Medicare Part D Annual Requirement Regarding Creditable Coverage Notices and Disclosure to CMS
Under the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA), employers and union group health plan sponsors offering prescription drug coverage are required on an annual basis to not only notify Medicare-eligible plan participants whether such coverage is “creditable,” but also disclose this information to the Centers for Medicare and Medicaid Services (CMS). Please review the following important details regarding these mandatory communications:
Creditable Coverage Employee Notice
The MMA regulations specify that all Medicare-eligible individuals with prescription drug coverage must be notified of their employer’s health plan status as a creditable plan. CMS believes such information is necessary to an individual’s decision to enroll in a Medicare Part D prescription drug plan.
The regulations under 42 CFR §423.56(f) specify the times when creditable coverage disclosures must be made to Part D eligible individuals. At a minimum, disclosure must be made at the following times:
- Prior to the Medicare Part D Annual Coordinated Election Period (ACEP) – Nov. 15 through Dec. 31 each year;
- Prior to an individual’s Initial Enrollment Period (IEP) for Part D, as described under 423.38(a);
- Prior to the effective date of coverage for any Medicare eligible individual that joins the plan;
- Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable; and
- Upon a beneficiary’s request.
If the creditable coverage disclosure notice is provided to all plan participants, CMS will consider the first two items to be met. The CMS guidance clarifies that “prior to” means the beneficiary must have been provided the Disclosure Notice within the past 12 months. CMS has provided model creditable coverage disclosure notices that can be accessed online at the following link: CMS Model Disclosure Notices
Creditable Coverage Disclosure to CMS
Entities that provide prescription drug coverage to Medicare Part D eligible individuals must also disclose to CMS whether the coverage is "creditable prescription drug coverage" regardless of whether the entity's coverage is primary or secondary to Medicare. The disclosure can be made using this online Creditable Coverage Disclosure Form from the CMS website.
It should be noted that while the initial creditable coverage Disclosure to CMS Form was completed by all entities that were required to provide a disclosure by March 31, 2006, for plan years that ended in 2006, this is an annual requirement. For all subsequent plan years, the Disclosure to CMS Form is due no later than 60 days following the beginning of the entity’s plan year.
For more information on the Medicare Part D annual requirements, please click here. Should you have any additional questions, please contact our office at (919) 403-1986.
Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.
October 27, 2009
Hill, Chesson & Woody Employee Benefit Services
194 Finley Golf Course Rd, Suite 200,
Chapel Hill, NC 27517
Phone: 919.403.1986
Fax: 919.869.2063
www.hcwbenefits.com