Medicare Part D Disclosures due by March 1, 2017 for Calendar Year Plans
March 1 may seem like an eternity away, but better to be in the know early, yes?
The Centers for Medicare & Medicaid Services (CMS) require all group health plan sponsors to complete an online disclosure form once per year and at other select times. These forms indicate whether the plan’s prescription drug coverage is creditable or non-creditable. Sponsors must submit this disclosure when an employer-sponsored group health plan provides prescription drug coverage to individuals eligible for coverage under Medicare Part D to be compliant.
The plan sponsor must complete the online form 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.
To determine if the CMS reporting requirement applies, employers should check whether their group health plans cover any Medicare- eligible individuals at the start of each plan year. If so, advisers can help determine whether the prescription drug coverage is creditable or non-creditable. They should also visit CMS’s Creditable Coverage website, which includes links to the online disclosure form and related instructions.
Medicare Part D Disclosure to CMS
Group health plan sponsors must disclose to CMS whether their prescription drug coverage is creditable or non-creditable. This disclosure is required regardless of whether the health plan’s coverage is primary or secondary to Medicare.
A group health plan’s prescription drug coverage is considered creditable if its actuarial value is equal to or greater than that of the Medicare Part D prescription drug coverage. In general, this actuarial comparison measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage meets or exceeds the amount under the Medicare benefit. The determining whether the coverage is creditable does not need to be done by a qualified actuary unless the plan sponsor chooses the Retiree Drug Subsidy for the group health plan.
Compliance Tip: CMS does NOT require an online disclosure form if an employer’s group health plan does NOT offer prescription drug benefits to any Medicare Part D eligible individuals as of the beginning of the plan year. Examples of eligible individuals include active employees, disabled employees, COBRA participants, retirees, and their covered spouses and dependents.
Also, a plan sponsor who has been approved for the Retiree Drug Subsidy does not need to file the CMS disclosure notice for the individuals they claim under the Retiree Drug Subsidy.
Timing of Disclosures to CMS
CMS requires the disclosure on an annual basis and whenever any change occurs that affects whether the coverage is creditable. More specifically, the Medicare Part D disclosure notice must be provided within the following time frames:
- Within 60 days after the beginning date of the plan year for which the entity is providing the disclosure to CMS;
- Within 30 days after the termination of a plan’s prescription drug coverage; and
- Within 30 days after any change in the plan’s creditable coverage status.
Online Disclosure Method
Plan sponsors must use the online disclosure form on the CMS Creditable Coverage Web page. This form is the only method for compliance with the disclosure requirement, unless Internet access is unavailable.
The disclosure form requires the following information:
- 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
- any change in creditable coverage status.
CMS has also provided instructions for including detailed descriptions for each of these categories and guidance on how to complete the form.
Disclosures to Individuals
In addition to the annual disclosure to CMS, group health plan sponsors must inform individuals who are eligible for Medicare Part D whether the plan’s prescription drug coverage is creditable. At a minimum, creditable coverage disclosure notices must be provided to individuals at the following times:
When to provide creditable coverage disclosures
|1||Prior to the Medicare Part D annual coordinated election period—beginning Oct. 15 through Dec. 7 of each year|
|2||Prior to an individual’s initial enrollment period for Part D|
|3||Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan|
|4||Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable|
|5||Upon a beneficiary’s request|
If the creditable coverage disclosure notice is provided to all plan participants annually, before Oct. 15 of each year, items (1) and (2) above will be satisfied. “Prior to,” as used above, means the individual must have been provided with the notice within the past 12 months. 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 for plan sponsors to use when disclosing their creditable coverage status to Medicare beneficiaries. The model disclosure notices are available on CMS’ website.
This Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.This information is abstracted from Zywave’s “Creating a Strong Safety Culture” newsletter