Medicare Part D Disclosure Notice Requirement

Medicare Part D: Disclosure Notice Requirement

Medicare Part D: Disclosure Notice Requirement disclosure notice creditable coverage non-creditable coverage CMS Creditable Coverage Employer prescription drug coverage compliance Employer prescription drug coverage compliance CMS reporting requirements Annual disclosure notice deadline Medicare-eligible employees and retirees Prescription drug coverage determination CMS notification requirements Medicare Part D compliance for employers Group health plan obligations

You probably offer your employees a healthcare plan if you’re an employer. For those offering a health plan for staff eligible for Medicare Part D (prescription drug coverage), you must learn about these requirements from the Centers for Medicare & Medicaid Services (CMS). 

 

Recently, the CMS released its report, which reviewed the requirements for reporting on Medicare Part D plans, and whether your plan that includes prescription drug coverage is creditable or non-creditable. 


You will need to go online to fill out their form on the CMS Creditable Coverage webpage to complete your assessment.

When do you need to complete this form?

• You must complete the online form within 60 days after the beginning of the plan year. If it is a calendar year plan, the deadline is March 1. 

• You must disclose to CMS whether your Medicare Part D prescription drug coverage is creditable or non-creditable every year. 

Work With Your Advisor

 Work with your advisor to determine if your prescription drug coverage is creditable or non-creditable to complete this disclosure requirement.

 

To learn more about the form and the requirements, visit the CMS Creditable Coverage webpage and review the online disclosure form and instructions. 

 

Creditable Coverage 

How do you know if your plan is creditable? Your prescription drug plan is creditable if it meets or exceeds the Medicare Part D coverage standard. In other words, the actuarial value, or the estimated average costs for benefits paid by the health insurance plan, must be met.  

There are a few ways to determine if your plan is creditable:

Simplified Determination Method

The Simplified Determination Method applies if you are not applying for the retiree drug subsidy and is based on whether your prescription drug coverage is integrated with other benefits.

How do you know if the simplified determination method considers your prescription drug plan creditable?

• Your prescription drug plan will cover brand name and generic prescriptions with reasonable access to retail providers.

• The plan pays at least 60% of your employee’s prescription drug expenses.

• It falls under one of the following requirements:

• Your prescription drug coverage has no maximum annual benefit, OR the plan pays the yearly maximum benefit up to at least $25,000.

• Your prescription drug coverage will pay the Medicare-eligible employee at least $2,000 annually.

• If you have an integrated health plan, it will have no more than a $250 deductible per year, or no annual limit, and a $1 million lifetime combined benefit maximum.

Actuarial Determination Method

If you cannot use the simplified method, use this method to determine your plan’s creditability. You must disclose every year whether the expected amount of claims paid under the employee’s prescription drug coverage is as much or more than anticipated under Medicare Part D. For more guidance on the retiree drug subsidy, HRAs, and if those contributions may be considered when determining if your plan is creditable, CMS has a more detailed resource. 

How do you disclose this information?

The CMS has an online form for Creditable Coverage Disclosure and you will input your information through the online form. You will need to have this information handy:

• Type of coverage

• Creditability status

• Number of Part D-eligible employees covered

• Any changes in creditable status

Provide Notice to Your Medicare-Eligible Employees

In addition to your CMS reporting, you will also need to notify your Medicare-eligible employees on these important dates:

• Before the annual Medicare Part-D open enrollment period (OEP) from October 15 through December 7

• Before the individual’s initial enrollment period for Part D

• Before the effective date of coverage for the Medicare-eligible employee

• When coverage ends or changes status

• Upon request

Provide this notice to all your employees annually before October 15 to ensure that you are compliant with Medicare disclosure rules and include in any new hire materials.

Here at Schatz Benefits Group, we help employers like you stay informed. 

This blog is an overview of the Medicare Part D requirements for employers and is not legal advice. Consult legal counsel for guidance on compliance and Medicare regulations. 

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