Medicare Part D requires all group health plan sponsors to disclose to individuals who are eligible for Part D, as well as to the Centers for Medicare and Medicaid Services (CMS), whether the health plan’s prescription drug coverage is “creditable” or not. To be considered “creditable,” the actuarial value of the Rx coverage needs to be equal to or greater than the value of standard Medicare Part D’s coverage.
Action Steps for All Employers
- Employers must confirm that their health plan’s Rx coverage is, in fact, creditable. For plans that offer multiple benefit options (i.e., PPO, HMO, and HDHP), the credibility test must be applied separately for each benefit option.
- Employers must prepare Medicare Part D disclosure notices.** CMS provides two model notices for employers to use, but employers may use their own notices instead so long as the notices include the disclosure and explanations of what creditable coverage means and why it is important.
- Employers must send these notices to all Medicare-eligible plan members before October 15th. October 15 is the start date for the annual enrollment period for Medicare Part D, so employers must furnish the disclosure to Medicare-eligible members before that date.
** If you are a SolV client, we prepare these notices on your behalf so that you can distribute them to your members.
FAQs on Part D NoTICES
Q: If a Medicare-eligible employee has a dependent who is also eligible for Medicare, how should the employer handle the disclosure?
A: One notice will suffice for a family who has multiple Medicare-eligible members, so long as these members live at the same address.
Q: Can the notice be given to members alongside other important health plan information (in the group’s benefit guide, for instance)?
A: Yes. If you provide the Part D disclosure with other plan participant information, you must make the creditable coverage disclosure “prominent and conspicuous” so it is clear and cannot be missed.
Q: Do employers have flexibility on how to distribute the notices to members?
A: Absolutely. Disclosures may be mailed out physically or delivered electronically – so long as a paper version is available upon request.
Q: What is the deadline on submitting the Medicare Part D disclosure to CMS?
A: Employers must disclose to CMS through their website whether their Rx coverage is creditable within 60 days of their plan’s renewal date.
This compliance overview is just that – an overview. It does not claim to be exhaustive nor should it be misconstrued as legal advice. Great effort has been put forth in ensuring the accuracy of all content, but this is no guarantee of infallibility. For official clarification or final authority, readers should solicit legal counsel.
