Medicare Part D Disclosures Due by March 1
By Russell Head
Employers with health plans that provide prescription drug coverage to individuals who are eligible for Medicare Part D are subject to certain disclosure requirements. One of these requirements provides that plan sponsors must disclose to the Centers for Medicare and Medicaid Services (CMS) on an annual basis and at other select times, whether the plan’s prescription drug coverage is creditable or non-creditable.
This disclosure is required regardless whether the health plan’s coverage is primary or secondary to Medicare.
The plan sponsor must complete the online disclosure within 60 days after the beginning of the plan year. For calendar year health plans, the deadline for the annual online disclosure is March 1.
Online Disclosure Method
Plan sponsors are required to use the online disclosure form on the CMS Creditable Coverage Web page. This is the sole method for compliance with the disclosure requirement, unless the entity does not have Internet access.
The disclosure form lists the required data fields that must be completed in order to generate the disclosure notice to CMS, such as types of coverage, number of options offered, creditable coverage status, period covered by the disclosure notice, number of Part D-eligible individuals covered, date the creditable coverage disclosure notice is provided to Part D-eligible individuals, and change in creditable coverage status.
A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit.
Employers may want to consult with their benefits advisor or an actuary to make sure that their determinations are accurate. For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.
Disclosures to Individuals
In addition to the annual disclosure to CMS, group health plan sponsors must disclose to individuals who are eligible for Medicare Part D whether the plan’s prescription drug coverage is creditable.
Some employers provide the creditable coverage disclosure notice to all participants with their annual Open Enrollment materials to simplify their compliance duties. In addition to providing the notice each year before Oct. 15, plan sponsors should consider including the notice in plan enrollment materials provided to new hires.
CMS has provided model disclosure notices on their website for plan sponsors to use when disclosing their creditable coverage status to Medicare beneficiaries.
CMS Creditable Coverage Web page
Russell T. Head is CEO of Head Capital Advisors, an Acrisure agency partner, and Augusta’s largest employee benefits brokerage. He can be reached at 706-733-3459 or firstname.lastname@example.org.