Employers sponsoring a group health plan with prescription drug benefits are required to notify their Medicare-eligible participants and beneficiaries as to whether the drug coverage provided under the plan is “creditable” or “non-creditable.”
Medicare Part D, the Medicare prescription drug program, imposes a higher premium on beneficiaries who delay enrollment in Part D after initial eligibility unless they have employer-provided coverage that is creditable (meaning equal to or better than coverage provided under Part D).
Employers that provide prescription drug benefits are required to notify Medicare-eligible individuals annually as to whether the employer-provided benefit is creditable or non-creditable so that these individuals can decide whether or not to delay Part D enrollment. The notification must be provided prior to October 15th each year.
In order to assist employers in their compliance obligations, the Centers for Medicare & Medicaid Services (“CMS”) have issued participant disclosure model notices for both creditable and non-creditable coverage (notices last updated by CMS for use on or after April 1, 2011). These model notices, when appropriately modified, will serve as a proper notice for purposes of this requirement. Spanish notices are also provided at the above link.
Also, following the plan’s annual renewal, the employer must annually notify the CMS as to whether or not the employer plan is creditable. This notice must be provided by the following deadlines:
- Within 60 days after the beginning date of the plan year (March 1, 2015 for a 2015 calendar-year plan);
- Within 30 days after the termination of the prescription drug plan; and
- Within 30 days after any change in the creditable coverage status.
Notice must be submitted electronically by completion of a Creditable Coverage Disclosure Form.
If you have any questions, contact your USI service team.