Employers are required to provide Medicare-eligible individuals with written notice as to whether their plan provides prescription drug coverage that is “creditable,” meaning “as good as” Medicare Part D coverage. With this information, individuals can make an informed decision about whether to enroll in Medicare Part D, or remain on an employer plan.
Medicare Part D notices must be provided annually before October 15, which signifies the start of the Medicare open enrollment period. It is the responsibility of employers sponsoring the group health plans to disclose creditable or non-creditable status of the drug coverage each calendar year.
Medicare Part D Notice Requirements
The Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003 requires any employer offering prescription drug coverage to employees to notify any Medicare-eligible workers of the creditable status of a prescription drug plan.
Knowing and understanding this status is often critical to a person’s decision to enroll in a Medicare Part D prescription plan. Medicare beneficiaries who are not covered by creditable prescription drug coverage and choose to not enroll in Medicare Part D before the end of the enrollment period may face higher premiums if they choose to enroll in Medicare Part D on a future date.
Employers must provide a Notice of Creditable Coverage to individuals:
- A minimum of once per year before the start of the annual Medicare Part D enrollment period on October 15;
- Whenever changes are made to the creditable or non-creditable status of a health plan’s prescription drug coverage;
- Whenever a Medicare-eligible employee or their spouse/dependent enrolls in the health plan;
- Whenever an individual requests a Medicare Part D notice.
Not all employees are eligible to receive a Medicare Part D notice. Employers should distribute notices to individuals who are deemed eligible for Medicare, which typically includes people who are age 65 or older. Individuals may be eligible for Medicare if they become disabled at an earlier age or have been diagnosed with end-stage renal disease.
Individuals eligible for a Medicare Part D notice include those entitled to Medicare Part A or Medicare Part B. It can be challenging to determine who may be eligible for these notices; therefore, employers may choose to send a notice to every employee.
Medicare Part D Notices And Documents
The Centers for Medicare & Medicaid Services (CMS) have developed two main standardized notices that are available to plan sponsors for use. The first is ‘Medicare Prescription Drug Coverage and Your Rights’ (CMS-10147) or “Pharmacy Notice;” the second is ‘Notice of Denial of Medicare Part D Prescription Drug Coverage’ which contains information pertaining to Part B step therapy requirements. Instructions for each standardized notice are available from CMS.
Plan sponsors must also review model notices that contain requirements for proper notifications specified by CMS for proper notifications to participants. A plan sponsor may make changes to model notices but must submit them to the CMS for review and approval. Model notices may be used by plan sponsors at their discretion. Several types of model notices are available, including:
- Notice of Right to an Expedited Grievance
- Notice of Case Studies
- Model Redetermination Notice
- Request for Additional Information
- Notice of Inquiry
- Notice of Formulary of Cost-Sharing Change
- DMP Model Redetermination Notice
Employers are not required to use the notices provided by CMS. However, if a CMS notice is not used, a plan sponsor must create a notice that contains specific information, including a statement that identifies the prescription drug coverage as either creditable or non-creditable, a description of the beneficiary’s right to a Part D notice, an explanation of coverage and options available to beneficiaries and an explanation of why coverage is important.
Delivering Medicare Part D Notices
Plan sponsors do have some flexibility in the way in which they deliver Medicare Part D notices. Notices can be sent in a separate mailing, or with other plan materials with the Medicare Part D notice placed on the first page or must be prominently referenced in a separate box, offset on the first page or bolded in a minimum of 14-point font.
A single notice can be provided to a beneficiary and all eligible dependents unless the plan sponsor is aware that dependents reside at a different address in which a separate notice must be sent to the additional address.
In some circumstances, Medicare Part D notices can be delivered electronically. The U.S. Department of Labor has established electronic disclosure standards that plan sponsors must follow if using electronic delivery.
It is also important that plan sponsors provide Medicare Part D notices based on certain timing guidelines. Notices must be delivered prior to an employee’s initial Medicare Part D enrollment period, prior to the annual Medicare Part D election period that starts on October 15th each year and prior to the participant’s coverage start date.
Medicare Part D notices must also be delivered whenever prescription drug coverage is changed, ends, is no longer creditable or is no longer non-creditable. Plan sponsors must also provide a Medicare Part D notice upon the request of a beneficiary.
It can be challenging to monitor which employees, as well as their spouses and dependents, are eligible each year for Medicare benefits. Ideally, employers should include a notice as part of the new-hire enrollment process or in their annual open enrollment materials.
Employers are also required to submit a Disclosure form each year to CMS, regardless of whether their prescription drug coverage is creditable or non-creditable. A Disclosure form must be electronically submitted to CMS within 60 days of the start of each plan year.
Schedule A Consultation With BBG
Many Medicare beneficiaries rely on the Medicare prescription drug benefit to pay for self-administered drugs, such as drugs to treat cancer and other conditions. This optional federal government program of the United States can often help lower prescription drug costs and provide enrollees with access to a wide range of prescription medications. To learn more about Medicare Part D notices or how to submit them, reach out to the experienced benefits consultants at Business Benefits Group today.