If you sponsor a group health plan that includes prescription coverage, there are two Medicare Part D requirements imposed by the Centers for Medicare and Medicaid Services (CMS):
1. Written Notice to Medicare Eligible Individuals
Plan sponsors are required to send participants either a Notice of Creditable Coverage or a Notice of Non-Creditable Coverage, whichever is applicable, by November 15th each year. If the company’s prescription coverage is creditable, it means the company plan is expected to pay on average as much as the standard Medicare Part D prescription coverage. Your health insurance carrier/TPA can assist you in determining whether your plan’s prescription coverage is creditable, and should be able to provide you with a sample notice, or even send the notice on your behalf. There are also model notices on the CMS website that you can use.
The purpose of sending the notice is to help Medicare eligible individuals decide if they should enroll in a Medicare Part D prescription plan during the Medicare open enrollment period of 11/15 – 12/31. The notice contains a warning that if they lose the company’s prescription coverage and go 63 days or longer without coverage, they will pay a penalty if they want to enroll in a Medicare prescription plan later. CMS requires that the notice be sent to Medicare eligible participants and their dependents in your plan, whether they are active employees, COBRA eligible, disabled, or retirees. This notice also needs to be given to any Medicare eligible employee when they first join the company plan. Some carriers recommend that the notice be sent to all covered participants, regardless of Medicare eligibility, to ensure the requirement is met.
2. Reporting The Status Of Your Plan to CMS
Group health plans must also notify the CMA about their creditable coverage status no later than the 60th day after the start of each plan year. The Disclosure to CMS Form is an online form.
See more information about the Medicare Part D creditable coverage requirements on the CMS website.