Annual Notice Action Required by October 15, 2011
Starting this year, employers must provide Medicare Part D notices prior to October 15th due to changes made as part of Health Care Reform. If you remember in previous years, notices were required prior to November 15th.
By October 15th, you are required to give notice to employees, retirees and COBRA participants regarding the Creditability of your health plan’s Rx benefit.
Once complete, you are then required to register online with the Centers for Medicare and Medicaid Services (CMS).
As of 2006, Medicare offers a “Part D” prescription drug benefit to eligible Medicare individuals (Medicare Beneficiaries).
The Annual Notice:
CMS has provided sample notices for creditable coverage and non-creditable coverage disclosure notices. Plan Sponsors must determine whether the prescription drug benefit they offer is considered creditable or not creditable, and distribute the appropriate notice by October 15th each year, and whenever plans change during the year. Each Plan Sponsor will need to add specific content to these notices. Please refer to the links above for Sample Notices.
In general, if your plan has a 3-tier drug copay, your plan is Creditable. If your drug benefit is subject to a deductible, i.e. HSA plan, or your drug benefit has an annual benefit limit, your plan is Non-Creditable. But, check with your health insurance carrier to determine the creditability of your plan(s).
How to provide notice to members of your plan:
1. Plan Sponsors have the option of using the sample notices or producing their own notices which contain all of the necessary elements, as described in the updated guidance. This guidance is available on the CMS website: www.cms.gov
2. Delivering the Notice by Mail. Plan Sponsors may mail the notice as a stand alone mailing or choose to incorporate the notice into other documents or disclosures, so long as there is prominent first-page, 14-point reference to the incorporated notice language.
3. Electronic Delivery. Plan Sponsors may also deliver the notice electronically to plan participants who have the ability to access the Plan Sponsor’s electronic information system on a daily basis as a part of their work duties. Plan Sponsors should inform participants that they are to share the electronic notice with all family members who are covered under the group health plan.
4. Recipients. Plan Sponsors should provide the notice to all health plan participants including COBRA beneficiaries. As we stated above, Plan Sponsors need only to provide a single notice to a participant with covered dependents, unless the sponsor records contain a separate address for other family members. Our attorney recommends that you distribute the notice to every enrolled participant, regardless of age, in the event someone has a Medicare-eligible dependent.
5. The Deadline. October 15, 2011. Medicare beneficiaries begin an open enrollment period on that date. To assist them in electing prescription drug coverage, they must know the status (creditable / non-creditable) of their current coverage. This requirement applies whether the plan coverage is primary or secondary.
If for some reason, a Plan Sponsor does not meet this deadline, it is critical to distribute the notice as soon as possible thereafter.
For a more detailed discussion of the Medicare Part-D notice and coverage requirements, and to download all notices and to file, go to the CMS website: http://www.cms.hhs.gov
Annual Notice Instructions
- Download the Sample CREDITABLE and/or NON-CREDITABLE notice, whichever applies, and customize to your organization.
- Distribute to all employees by October 15th. You may have one plan that is Creditable and one that is not, and therefore, need to download both forms. Distribute to employees depending on the plan in which they are enrolled.
- Click on the “Disclosure to CMS Form” link and complete the form by October 15th. When asked about the number that will be eligible for Medicare Part D, just estimate 1 or 2, unless you are certain there is no one eligible. When hiring someone new, include the notice in the New Hire packet. Also, send the attached notice to all enrolled employees each time you change plans or carriers, and prior to October 15th each year.
- Print copies of everything and keep in a file year-to-year.