We’d like take this opportunity to remind you of your annual requirements as an employer who offers prescription drug coverage to its employees. If you haven’t already, you will soon be receiving similar reminders from your health insurance carrier and/or Center for Medicare & Medicaid Services (CMS). Under these regulations, it’s your responsibility to disclose to your employees whether your current coverage is creditable or non-creditable. Since it does require action from you whether you have Medicare eligible employees or not, we wanted to provide a quick summary.
Background:
Open Enrollment for Medicare Part D Coverage (Prescription Drug Coverage) begins October 15th. Any Medicare Part D applicant who is now eligible for coverage for the first time pays a “base” premium. Any applicant that was previously eligible for Part D coverage (and did not have “creditable” Prescription Drug Coverage prior to their application) must pay a higher premium. To avoid having to pay this higher premium, an applicant must provide the “Creditable Coverage Notice” from their previous plan. Therefore, the Center for Medicare & Medicaid Services (CMS) has made it the responsibility of ALL employers to provide the applicable notice to their employees.
WHAT YOU NEED TO DO:
There are two disclosure requirements:
1) The 1st disclosure requirement is
to provide a written disclosure notice to all Medicare eligible individuals who
are covered under your prescription drug plan, prior to October 15th
as stated in the regulations, including to a Medicare eligible individual when
he/she joins the plan. This disclosure must be provided to:
medicare eligible active working individuals and their dependents
- Medicare eligible disabled individuals covered under your prescription drug plan
- Retirees and their dependents
- Medicare eligible active working individuals and their dependents
- Most employer don’t know who their Medicare-covered enrollees are and thus, federal rules allow plan sponsors to meet this obligation by sending the applicable notice to ALL plan participations. The DOL model notices can be found here:
https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/Model-Notice-Letters.html
IF your plan(s) is CREDITABLE per the guidance below, feel free to utilize the attached Model Disclosure Notice (Word doc). Please note, you must format with your company name (red highlights) & medical carrier (blue highlights).
2) The 2nd disclosure requirement is for employers to complete the online Disclosure to CMS form and report the creditable coverage status of their prescription drug plan. The disclosure should be completed annually, no later than 60 days from the beginning of a plan year, within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. The link (with instruction below) can be found here:
https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosureForm.html
Here are the simple steps to follow:
- Enter your Company’s Information (Name, TaxID, Address, etc)
- For Coverage Type, select “Group Health Plan: Employer Sponsored” in the drop down box
- Are your options creditable? Please note for this purpose that NOT all major medical group plans have Creditable Rx Coverage. However, a significant majority of the medical plans offered by our clients have Creditable Rx Coverage. The types of plans that may be NON-Creditable typically have the following designs:
- qualified High-Deductible health plans (HSA eligible) with prescription copays after the deductible
- qualified High-Deductible health plans (HSA eligible) with individual deductibles greater than $3,000
- qualified High-Deductible health plans (HSA eligible) with less than 100% coinsurance after deductible
- health plans with separate Rx deductibles
- Plan Year Beginning date is your renewal date for your medical coverage (i.e. 6/1/2019)
- Plan Year Ending date is the day before your next renewal (i.e 5/31/2020)
- Enter the number of Medicare Part D eligible employees you ‘expect’ to be covered on your health plan
- Of those eligible employees ‘expected’ to be covered, how many are ‘expected’ be covered through an Employer/Union Retiree Group Health plan
- Use today’s date as the “date this disclosure was completed”
- Enter Yes/No if your creditable coverage status has changed from last year
- Enter contact information and continue
- Submit disclosure (save a copy of disclosure for your files)