Creditable Coverage Disclosures
We understand that you and your clients are responsible for more work than ever before. Therefore, we are providing you with this reminder that the Medicare Modernization Act (MMA) requires your clients to complete two disclosure requirements pertaining to the creditable coverage of their prescription drug plan.
Please note, this is only required for any employee and dependents that are Medicare eligible but because it may be difficult to identify all Medicare Part D participants in the group health plan, it may be prudent to provide the disclosure to all plan participants annually, prior to October 15th as well as to all new hires prior to initial enrollment in the group health plan.
(1) Written Disclosure Notice
Employers are required to provide a Medicare Part D disclosure notice to their Medicare-eligible employees by October 14th of each year. This disclosure notice is for Medicare employees regarding the credibility of the prescription drug coverage that is offered through their employer plan.
The Medicare Part D benefit is an optional benefit that can be purchased by either the Medicare beneficiary or by the employer, on the beneficiary's behalf. If pharmacy benefits are covered under your client's group health plan, they must inform their Medicare-eligible employees whether the prescription coverage offered is "creditable" (at least equal to the standard Medicare benefit) or "non-creditable" (not equal to the standard Medicare benefit).
Employers must provide notices to their Medicare-eligible employees, dependents and retirees on the following occasions:
- Prior to the Medicare Part D Annual Election Period (October 15th through December 7th each year);
- Prior to the individual's initial enrollment period for Part D;
- Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan;
- Whenever prescription drug coverage ends or changes; and
- On a beneficiary's request.
Important Note: Medicare-eligible employees should keep their creditable coverage disclosure notice in case they need it for future reference. If Medicare-eligible employees become eligible for Part D and decide not to sign up because they have other coverage, a creditable coverage disclosure notice allows them to enroll in Part D at a later date without being charged a higher premium.
For individuals enrolled in a non-creditable employer health plan, failure to enroll in Part D when they are first eligible will result in them being charged a higher premium if they choose to enroll in Part D at a later date.
(2) Online Disclosure to CMS Form
Employers are also required to notify the Centers for Medicare and Medicaid Services (CMS) annually of the creditability of the prescription drug coverage provided to Medicare-eligible employees, dependents and retirees. The Online Disclosure to CMS Form must be completed at various times, including:
- Annually, within 60 days from the beginning of a plan year;
- Within 30 days after termination of a prescription drug plan; and
- Within 30 days after any change in creditable coverage status.
Please contact your B&P Representative if you have questions not addressed by the resources provided above — 888.722.3373.