Background
It’s that time again – time to ensure you’ve sent a Medicare Part D notice of creditable coverage to your eligible employees letting them know if the prescription drug coverage you offer them is creditable. A group health plan’s prescription drug coverage is considered creditable if it is at least as generous as Medicare Part D prescription drug coverage.
Summary
Who Needs to Notify Their Employees?
All employers, regardless of size, who sponsor group health plans with prescription drug coverage must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2021 – the start date of the annual enrollment period for Medicare Part D.
Which Employees Do I Need to Notify?
- You are required to give the creditable-coverage notice to all Part D eligible individuals who are covered under, or apply for, an employer’s prescription drug benefits plan. This requirement applies to Medicare beneficiaries who are active employees and those whoa re retired, as well as Medicare beneficiaries who are covered as spouses under active or retiree coverage. COBRA participants must also be notified.
- To alleviate the responsibility of determining who is a “Medicare-eligible” participant, HR Knowledge recommends that you provide this notice to ALL employees and COBRA participants enrolled in your employer-sponsored medical plans.
Disclosure Requirement #1
If you’ve already provided the Creditable/Non-Creditable Notice to your staff since your last renewal date, you do not need to provide it again.
If you have not provided the Notice to your staff prior to October 14, 2021 (for your current plan year), you must communicate your plan(s) status. We recommend that you conduct a blanket mailing to all participants and their dependents (including COBRA participants), because you may not be aware of a dependent’s Medicare eligibility (such as a spouse over 65 or disabled dependents). If you are aware that a covered spouse or dependent child resides at a different address from the employee, you must mail a separate notice to that address.
- This mailing must be conducted prior to the October 15, 2021, deadline.
- The CMS website also has the template available in Spanish.
- If you need a copy of your Creditable/Non-Creditable Notice, please contact the Benefit Support Team for assistance.
Disclosure Requirement #2
As a health plan sponsor, your organization must notify CMS of your plan’s creditable coverage status on an annual basis. You are required to provide the disclosure notice to CMS by completing the disclosure form on the CMS webpage. The Disclosure to CMS Form is available on the left-hand side menu, under Creditable Coverage. Instructions to completing the form are in the same location, titled, Disclosure to CMS Guidance and Instructions. Completing and submitting the form online is the only allowable way to provide CMS with the notice. You must complete the disclosure annually, no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status.
Each employer must report to CMS directly, HR Knowledge is unable to do this on your behalf.
Employers Next Steps
- View the HR Knowledge Compliance Overview
- Determine if you’ve provided the Creditable/Non-Creditable Notice to eligible members for the current plan year.
- Disclosure #1: Communicate your plan(s) status by sending a blanket mailing to all participants and their dependents (including COBRA participants). This mailing must be conducted prior to the October 15, 2021, deadline.
- If you have further questions regarding this e-Alert, please contact our Benefits Team.
- If you are a Full-Service or Virtual HR client and would like our assistance with updating your policy, please email us.
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This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this content, please contact HR Knowledge at 508.339.1300 or email us.
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