Reminder: Medicare Part D Notices Are Due to CMS by March 1

Each year, group health plan sponsors that provide prescription drug coverage to individuals eligible for Medicare Part D must electronically disclose to the Centers for Medicare & Medicaid Services (CMS) whether that coverage is "creditable" or "noncreditable." The disclosure obligation applies to all plan sponsors that provide prescription drug coverage, even those that offer prescription drug coverage only to active employees and not to retirees. Calendar-year plans must submit this year's disclosure to CMS by March 1, 2019.

Background

Individuals who fail to enroll in Medicare Part D prescription drug coverage when first eligible may be subject to late enrollment penalties if they go 63 consecutive days or longer without creditable prescription drug coverage. Prescription drug coverage is "creditable" when it is at least actuarially equivalent to Medicare Part D prescription drug coverage. Because of this potential penalty, both Medicare Part D-eligible individuals and CMS need to know whether a group health plan's prescription drug coverage is creditable or noncreditable.

Plan sponsors that provide prescription drug coverage also must furnish Part D-eligible individuals with a notice disclosing the creditable or noncreditable status of their coverage before the beginning of the Medicare Part D annual enrollment period on Oct. 15 and at certain other times.

Disclosures to CMS

Plan sponsors generally must disclose creditable coverage status to CMS within 60 days after the beginning of each plan year. Disclosure is made online using the creditable coverage Disclosure to CMS Form available on the CMS website.

All Part D-eligible individuals covered under an employer's prescription drug plan—regardless of whether the coverage is primary or secondary to Medicare Part D—should be included in the disclosure. Part D-eligible individuals are generally age 65 and older or under age 65 and disabled, and include active employees and their dependents, COBRA participants and their dependents, and retirees and their dependents. Even employers without retiree coverage may need to file the disclosure.

Plan sponsors that contract directly with Medicare or a private insurer to provide a Medicare Part D plan as their prescription drug coverage for those who are Medicare-eligible do not need to disclose those individuals who participate in the Part D plan.

In addition to the annual disclosure, plan sponsors must submit a new disclosure form to CMS within 30 days following any change in the creditable coverage status of a prescription drug plan. This includes both a change in the coverage offered so that it is no longer creditable and the termination of a creditable coverage option. A new disclosure form must also be submitted to CMS within 30 days after the termination of a prescription drug plan.

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Information Needed

In preparing the disclosure to CMS, plan sponsors need to:

• Identify the number of prescription drug options offered to Medicare-eligible individuals. This is the total number of benefit options offered, excluding any benefit options the plan sponsor is claiming under the retiree drug subsidy (RDS) program, because an employer participating in the RDS program must have already certified to CMS that its drug coverage is creditable. Also excluded from disclosure are options offered under employer group waiver plans (EGWPs) that are Medicare Part D coverage.
  

• Determine the number of benefit options offered that are creditable coverage and the number that are noncreditable.
  

• Estimate the total number of Part D-eligible individuals expected to have coverage under the plan at the start of the plan year (or, if both creditable and noncreditable coverage options are offered, estimate the total number of Part D-eligible individuals expected to enroll in each coverage category). This includes Part D-eligible active employees, retirees and disabled individuals and any of their Part D-eligible dependents, and any individuals on COBRA who are Part D. eligible. Individuals who will become Part D eligible after the start of the plan year should not be included in the count for that year. However, they must be provided a notice of creditable or noncreditable coverage prior to their initial enrollment period for Part D.
  

• Provide the most recent calendar date on which the required notices of creditable or noncreditable coverage were provided.
  

In Closing

Plan sponsors should review the instructions carefully before completing the Disclosure to CMS Form to make sure that they have all necessary information, and calendar year plans should report the information by March 1, 2019.

Richard Stover, FSA, MAAA, is a principal at HR advisory firm Buck. Leslye Laderman, JD, LLM, is a principal in the Knowledge Resource Center at Buck. This article originally appeared in the Feb. 4, 2019 issue of Buck's For Your Information. © 2019 Buck Global LLC. All rights reserved. Republished with permission.

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