RxDC (Prescription Drug Data Collection)
This annual reporting is a federal requirement under the Consolidated Appropriations Act (CAA), passed in 2021. It requires health plans and insurers to submit data on prescription drug costs and overall healthcare spending to the Centers for Medicare & Medicaid Services (CMS).
For fully insured plans and for some level-funded plans (varies by level-funded carrier – see guidelines of your specific carrier), the insurance carrier is responsible for submitting the data on your behalf. However, they may require certain information from you, such as employee and employer contribution details. Most carriers have already communicated this requirement and the applicable deadlines. If the requested information is not provided by the deadline, the majority of the submission your carrier is doing on your behalf will become your responsibility.
For self-funded or some level-funded plans (varies by carrier – see guidelines of your specific level-funded carrier), the employer is responsible for completing and submitting the RxDC reporting. This information is due to CMS by June 1 each year for the prior year’s coverage period and must be submitted electronically through the RxDC module within the Health Insurance Oversight System (HIOS) on the CMS Enterprise Portal.
Please Note: RxDC reporting is separate from the annual CMS Disclosure of Creditable Coverage. The CMS Disclosure should be completed annually within 60 days following your plan renewal date, as well as within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. As always, please contact your Stumm Insurance Service Team if have any questions.
COBRA Qualifying Events Reminder
Qualifying events are “triggers” that can cause the loss of group health coverage and may result in the right to COBRA coverage. The type of qualifying event determines who the qualified beneficiaries are for that event.
The following are qualifying events under federal COBRA if they cause a covered individual to lose health coverage:
Qualifying Events for Covered Employees
- Termination of the covered employee’s employment (whether voluntary or involuntary) for reasons other than gross misconduct
- Reduction in the covered employee’s hours of employment
Qualifying Events for Spouses and Dependent Children
- Termination of the covered employee’s employment (whether voluntary or involuntary) for reasons other than gross misconduct
- Reduction in hours worked by the covered employee
- The covered employee becoming entitled to Medicare
- Divorce or legal separation of the spouse from the covered employee
- Death of the covered employee
- Losing “dependent child” status under the plan rules
If a qualifying event occurs, the group health plan must be notified, and who gives notice depends on the type of qualifying event. The employer must notify the plan within 30 days after the following qualifying events occur:
- Termination or reduction in hours of employment of the covered employee
- Death of the covered employee
- Covered employee’s becoming entitled to Medicare
Alternatively, the employee, spouse, or dependent is responsible for notifying the plan (meaning the employer) if the qualifying event is divorce, legal separation, or a child’s loss of dependent status under the plan. This notice generally must be provided within 60 days after the later of the date of the qualifying event or the date the employee, spouse, or dependent would lose coverage due to the qualifying event.
Providing Notice to Qualified Beneficiaries: After receiving notice of a qualifying event, the plan (employer or COBRA administrator) generally must provide the qualified beneficiaries with the COBRA election notice within 14 days. The individual then has 60 days to decide whether to elect COBRA coverage.
2026 Payroll Deduction Difference Reminder
Have you noticed that 2026 looks different? On many fronts, of course, but in regard to payroll periods and those employers that process payroll on a biweekly basis, take note of a possible twenty-seventh payroll period depending on when payroll is processed. This occurs approximately every 11 years due to the way the calendar cycles and pay periods intersect.
While it may seem trivial, the extra pay period can create some compliance, budgeting and additional work for employers if not addressed properly. The potential impact may include overpayment to employees for a 27th payroll cycle as well as contributions, garnishments and deductions that may not align with the annual totals associated under the “standard” 26 payroll period year.
Hopefully employers in this situation have made adjustments and arrangements with their payroll vendor by now. If not, it would be best to address this now as opposed to delaying to the end of the year before it is too late.
Individual Disability Insurance
Are your highly compensated employees (HCEs) properly covered? Most employer Long-Term Disability plans pay a benefit of 60% of income, but they cap out at a certain monthly maximum. As a result, many HCEs have a benefit of less than the expected 60% income replacement. In the event of a disability, they could be surprised if they do not receive the 60% benefit that they thought they had. A savvy HR or Finance team can work with their Stumm Insurance Service Team to proactively identify the gaps for HCEs and work with an insurance carrier to purchase additional Individual Disability Insurance (IDI) policies. IDI policies can be tailored for specific income needs, covering bonuses, commissions, and incentives that a standard group LTD plan may exclude, and may also remain with the HCE if they change jobs. If you would like to explore an IDI program to improve overall benefits competitiveness and support talent attraction and retention with your HCEs, contact your Stumm Insurance Service Team.
Upcoming Holidays
Please note that Stumm Insurance is “closed” on certain Holidays throughout the year. Your Stumm Insurance Service Team will not be readily available on this date during this 2nd quarter: 05/25/26 (Memorial Day).