HR Alert – Medicare Part D Creditable Coverage – Model Disclosure Notice

HR Alert – Medicare Part D Creditable Coverage – Model Disclosure Notice

Creditable Coverage

The Medicare Modernization Act (MMA) requires entities (whose policies include prescription drug coverage) to notify Medicare eligible policyholders whether their prescription drug coverage is creditable coverage, which means that the coverage is expected to pay on average as much as the standard Medicare prescription drug coverage. For these entities, there are two disclosure requirements:

The first disclosure requirement is to provide a written disclosure notice to all Medicare eligible individuals annually who are covered under its prescription drug plan, prior to October 15th each year and at various times as stated in the regulations, including to a Medicare eligible individual when he/she joins the plan. This disclosure 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 your prescription drug plan and any retirees and their dependents. The MMA imposes a late enrollment penalty 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 information is essential to an individual’s decision whether to enroll in a Medicare Part D prescription drug plan.

Disclosure to CMS Form

Entities that are required to provide a disclosure of creditable coverage status to CMS must complete the online Disclosure to CMS Form at CMS.gov. The direct link to the CMS form can be found here:

CMS FORM

Medicare Part D Creditable Coverage FAQs

  • Are Part D eligibles required to enroll in Part D
  • What are we required to do regarding creditable coverage?
  • When must we notify our members of our plan’s creditable coverage status?
  • For more information, click the following linkCreditable Coverage Guidance and Model Disclosure Notice

Employer plan sponsors are required by CMS to provide creditable coverage status to Part D eligible members at least once a year and at the following times:

  • Prior to an individual’s initial enrollment period;
  • Prior to the effective date of coverage for any Medicare-eligible individual that joins your plan;
  • Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable;
  • Prior to the Medicare Part D Annual Coordinated Election Period beginning on October 15 of each year; or
  • Upon the request of a beneficiary.

What if we do not offer retiree health care coverage?

Creditable coverage notification must be provided to all Part D eligible individuals who are covered under or apply for your company’s prescription drug benefits plan. This requirement applies to Medicare beneficiaries who are active employees and those who are retired, as well as Medicare beneficiaries who are covered as spouses under active or retiree coverage.

Must we notify CMS of our plans’ creditable coverage status?

Yes. 

You must provide a disclosure to CMS on an annual basis, via an online form. Creditable coverage status may change from one year to the next because the standard Part D benefit may change in the future.  CMS requires that the disclosure be provided within:

  • 60 days after the beginning date of the Plan Year for which the entity is providing the Disclosure to CMS Form;
  • 30 days after the termination of the prescription drug plan; and
  • 30 days after any change in the creditable coverage status of the prescription drug plan.

If you have any questions regarding the information in this HR Alert, please contact an FosterThomas representative to assist you.

Disclosure to CMS Form

Entities that are required to provide a disclosure of creditable coverage status to CMS must complete the online Disclosure to CMS Form at CMS.gov. The direct link to the CMS form can be found here:

CMS FORM

 

Share

About the Author

FosterThomas is a leading professional services company that provides solutions in the areas of Human Resources Consulting and Outsourcing, HR Staffing, Outsourced Recruiting, Employee Benefits Brokerage, Payroll Implementation and Services, HR for Government Contractors, Business Insurance, HR Compliance and Risk Management. We help organizations by providing solutions designed with a focus on cost containment strategies and increasing HR efficiency. FosterThomas HR Consulting was established in 1993 with offices in Annapolis, Maryland (Corporate), McLean, Virginia and Raleigh, North Carolina. Today, FosterThomas occupies a unique position as a full service provider of HR services.

Leave a Comment

We would be glad to get your feedback. Take a moment to comment and tell us what you think.

Share
HR Outsourcing MD, DC, VA, PA