Health plan sponsors must notify the Centers for Medicare and Medicaid Services (CMS) within 60 days from the beginning of the plan or policy year as to whether their group health plan prescription drug coverage (for the current year) is “creditable coverage” under Medicare Part D. For calendar year plans, this deadline is March 1st.
This notice can only be made by using the Online Disclosure to CMS Form on the CMS website. See below for additional details. The website also requires the plan sponsor to report the date they sent the Medicare Part D notices to Medicare-eligible plan participants. The notices must be provided to participants no later than October 15th and can be provided with open enrollment materials if they are distributed before October 15th.
The Medicare Modernization Act requires group health plan sponsors that offer prescription drug coverage to notify Medicare Part D eligible participants (employees and dependents) as to whether their prescription drug coverage is “creditable coverage”. Coverage is “creditable” if it is expected to pay on average at least as much as the standard Medicare Part D prescription drug coverage.
Group health plans that offer prescription drug coverage to Medicare Part D eligible individuals also must provide an annual notice to CMS, through the CMS website, regarding whether their prescription drug coverage is, for the current plan year, “creditable coverage.”
A penalty will be imposed on a participant if, after becoming eligible for Medicare Part D coverage, there is a lapse of “creditable” prescription drug coverage for a period of at least 63 days. Thus, Medicare-eligible participants in employer group health plans must know whether or not the employer group coverage is “creditable” so they do not unwittingly incur a late enrollment penalty.
Details on the Online Disclosure to CMS
WHEN: Medicare Part D Notice to CMS must be reported within 60 days from the beginning of the plan year (contract date or renewal date, for small plans that do not file Form 5500 and do not specify a plan year). For calendar year plans, this means notice must be provided to CMS no later than March 1st. (As noted in an earlier post, for plans that renewed early on December 1, 2013, the notice deadline was January 29, 2014.) This notice must be made at the CMS website using the Online Disclosure to CMS Form. (Any employer who does not have internet access, should contact CMS and can fax a hard copy of the Part D notice it sent to participants.)
WHERE: Completing the online Form is fairly simple. Go online to https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosureForm.html.
WHAT: The information you will need to complete the online submission is:
- Plan sponsor’s name, Federal Tax ID number, address, phone number, type of coverage (a drop-down box lists employer-sponsored GHP, Union GHP, government GHPs, church GHP, etc.), how many prescription drug options are offered under this coverage (e.g., if you offer both an HMO and a PPO, enter “2”), and whether all or some of the options are creditable or non-creditable. Be sure to obtain a submission confirmation (step #3).
- Period covered by the Disclosure Notice, number of Part D eligible individuals expected to be covered under these Plan(s) as of the beginning date of the plan year, date the employer provided the Notice of Creditable Coverage to Part D eligible individuals, change in Creditable Coverage status of previously disclosed information to CMS
WHO: As part of the online disclosure, you will also need to input the name, title, and email of the Employer’s “Authorized Individual” who is completing the disclosure form. An “Authorized Individual” must be either:
- an employee of the employer/plan sponsor; or
- contracted with the employer as an “Authorized Individual” to complete the disclosure on behalf of the entity.
The Authorized Individual must sign a statement agreeing to the following four items:
- that this submission supersedes any previous submission of this information with dates prior to the date below.
- that the entity/plan sponsor agrees to disclose to CMS and all Medicare Part D eligible individuals any changes that would affect the creditable status of the above coverage as outlined under §423.56.
- that I am authorized to supply this disclosure of creditable coverage on behalf of the Entity; and
- that the information provided in this disclosure is true, correct, and complete to the best of my knowledge and belief.
Note: Because of this attestation requirement, and the definition of an “Authorized Individual”, an employer should complete its own online disclosure to CMS, unless there is a written contract authorizing another party (such as the broker or benefits advisor) to be the “Authorized Individual” on behalf of the employer.
MORE: Once you click the “Submit” button, you should receive a confirmation message. Print a copy of this page for your records. If you receive an error message or have technical problems that you are unable to fix, contact the Disclosure to CMS Technical Help line at: 1-877-243-1285
Plan sponsors also must complete the Online Disclosure to CMS Form within 30 days after termination of a prescription drug plan or within 30 days after any change in creditable coverage status.
For additional information, the main CMS webpage that provides guidance on “creditable coverage” is: http://www.cms.gov/CreditableCoverage/
Medicare Part D Notices to Participants
The notices must be provided to participants no later than October 15th and can be provided with open enrollment materials if they are distributed before October 15th. The enrollment period for prescription drug coverage is October 15th through December 7th. The following entities must provide the Medicare Part D notice if they offer prescription drug benefits to any Medicare Part D individual on the first day of the plan year (or contract renewal year): all employers and unions; multiple employer welfare arrangements (MEWAs); federal, state and local government employers; and churches. An employer that does not offer prescription drug benefits to any Part D individuals is not required to complete the CMS Disclosure form for that plan year.
Additional notices must be provided to participants throughout the year when:
• there is any change in the creditable coverage status of the employer’s prescription drug plan
• the employer terminates the prescription drug plan • an individual requests a copy of the notice
• an individual first enrolls in the employer plan
The Part D Notice must be provided not only to Medicare-eligible active working employees and their dependents, but also to participants who are retired, on COBRA, or disabled and covered under the employer’s prescription drug plan. Although the requirement is only that “Medicare-eligible” individuals be provided this notice, employers often provide it to all plan participants and dependents, because of the practical difficulty of knowing who is Medicare-eligible.
Most plan sponsors use the Model Medicare Part D Notices provided by CMS to notify affected plan participants. Click here for the Notice of Creditable Coverage.
(If you are reading this in hard copy, you can go to: https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/Downloads/ModelCreditableCoverageDisclosureNotice051711.pdf)