Employers sponsoring group health plans with pharmacy benefits need to know the creditable status of their plan if offering medical benefits or pharmacy carve-outs to Medicare-eligible persons. Creditable means that the plan being offered is at least as good, if not better, than what Medicare Part D would offer them. Once determining the creditable status of their plan, the plan sponsor (often the employer) will know which notice to send to plan participants annually by October 15 and for reporting to the Centers for Medicare and Medicaid Services (CMS) by March 2nd. For complete details, see the CMS webpage.
To determine if your pharmacy plan is creditable consider if the following terms are better or worse than the terms applicable to your pharmacy benefit.
Deductible: $445 (up $10)
Initial Coverage Limit: $4,130 (up $110)
Out-Of-Pocket (OOP)Threshold: $6,550 (up $200)
Total Covered Part D at the OOP: Threshold for Beneficiaries Who are Not Eligible for the Coverage Gap Discount Program (CGDP): $9,313.75 (up (275)
Estimated Total Covered Spending at OOP Expense: Threshold when Eligible for Coverage CGDP: $10,048.39 (up $329.01)
Minimum Cost-Sharing Under Catastrophic Benefits: $3.70 generic/preferred multi-source drugs (up ten cents); $9.20 for all other drugs (up 25 cents)
Action Items
Employers sponsoring pharmacy benefits should work with their insurance provider to determine if your plan is creditable or non-creditable. Some assumptions and conservative routes may be encouraged where information is not available. For example, you may want to distribute the notice to all participants because one cannot know whether a plan participant has a Medicare-eligible spouse/dependent.
- Be sure to distribute the appropriate notice annually.
- By email (only if they have daily access to email);
- First-class mail; or
- Hand-delivery.
- Always document compliance in the event of an audit.
- Don’t forget CMS reporting.
The information contained here is intended as education only and not legal or other advice. Be sure to consult with your own legal professional to ensure compliance with all applicable law.