October 2, 2018
The Medicare annual enrollment period is fast approaching! For the coverage year 2019, the Medicare enrollment period occurs from October 15, 2018, through December 7, 2018. The Centers for Medicare and Medicaid Services (CMS) requires employers to complete a two-part notice and disclosure informing both employees and CMS whether the employer’s prescription drug coverage is considered creditable or at least as good as Medicare Part D. This Compliance Alert provides the resources employers need to complete each requirement.
Under the Medicare Prescription Drug Improvement and Modernization Act of 2003, employers offering prescription drug coverage are required to satisfy two notice and disclosures requirements annually:
- Make a creditable coverage disclosure to CMS, and
- Notify Medicare-eligible plan participants whether their prescription drug coverage is creditable.
EMPLOYER CALL TO ACTION
Step One: Complete Online Creditable Coverage Reporting to CMS
Employers that provide prescription drug coverage to Medicare Part D eligible individuals must 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 creditable coverage disclosure to CMS is due no later than 60 days following the beginning of the employer’s plan year, although many employers report in the fall around the time of the Medicare annual enrollment period (see Step Two).
The form is short and relatively easy to complete online. This document provides instructions and a preview of the data required by the online form.
Step Two: Notify Medicare-Eligible Participants
Employers that provide prescription drug coverage to Medicare Part D eligible individuals must notify these individuals whether the drug coverage they have is creditable or non-creditable.
CMS has published Medicare Part D creditable coverage model notices to help employers meet this notice obligation to employees. The model notices are available here.
The model notices were last updated in 2011 and are acceptable for use in 2018. Employers that provide prescription drug coverage to Medicare Part D eligible individuals may modify these model notices as needed to accurately inform individuals whether the drug coverage they have is creditable or non-creditable.
For fully-insured plans, many carriers provide information to assist employers in determining whether their plans are creditable.
The regulations under 42 C.F.R. §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) – October 15 through December 7 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 who 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 bullets 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.
If an employer provided the notice during open enrollment sometime within the 12 months prior to October 15, the notice obligation to employees has been satisfied and another notice need not be distributed.
Employers may provide the Medicare Part D creditable coverage notice to participants in paper form, which CMS prefers, or electronically. If an employer elects to provide the notice electronically, the employer must follow the Department of Labor electronic disclosure requirements. In addition to other requirements, employees must have the ability to access electronic documents as part of their daily work duties in order to receive electronic notices.
Eligibility for Medicare Part D is not limited to age. Employers may not know which employees or dependents are eligible for Medicare Part D for reasons other than age. Providing the notice to all eligible employees, regardless of age, is recommended.
For more information on the Medicare Part D annual requirements, please visit the CMS website. Should you have any additional questions about the Medicare Part D reporting and disclosure requirements, please contact your Consultant or Client Manager at (919) 403-1986.