Annual Medicare Part D Notices Due Before Oct. 15

Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable.

Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2016 – the start date of the annual enrollment period for Medicare Part D.  Group health plan sponsors often provide the creditable coverage disclosure notices to all plan participants, regardless of Medicare Part D eligibility.

Model Notices

CMS has provided two model notices (Creditable or Non-Creditable) for employers to use.  Employers are not required to use the model notices from CMS. However, if the model language is not used, a plan sponsor’s notices must include certain information, including a disclosure about whether the plan’s coverage is creditable and explanations of the meaning of creditable coverage and why creditable coverage is important.

A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit.  For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.

Online Disclosure Form

Plan sponsors are also required to disclose to CMS whether their prescription drug coverage is creditable. The disclosure must be made to CMS on an annual basis, or upon any change that affects whether the coverage is creditable, and can be found here.  This is the sole method for compliance with the CMS disclosure requirement, unless a specific exception applies.

At a minimum, the CMS creditable coverage disclosure notice must be provided within 60 days after the beginning date of the plan year for which the entity is providing the form; within 30 days after the termination of the prescription drug plan; and within 30 days after any change in the creditable coverage status of the prescription drug plan.

Timing of Notices

At a minimum, creditable coverage disclosure notices must be provided at the following times:

  • Prior to the Medicare Part D annual coordinated election period – beginning Oct. 15 through Dec. 7 of each year
  • Prior to an individual’s initial enrollment period for Part D
  • Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan
  • Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable
  • Upon a beneficiary’s request