Group health plan sponsors must provide Medicare Part D creditable coverage notices prior to October 15th, the start date of the Medicare annual enrollment period for Part D, Prescription Drug coverage. The enrollment period is October 15th – December 7th. Most plan sponsors customize the Model Medicare Part D Notices provided by the Centers for Medicare and Medicaid Services (CMS) to notify affected plan participants. The October 15th deadline applies for all group health plan sponsors that offer prescription drug benefits, regardless of plan year, plan size, employer size, grandfather status, or whether the plan is insured or self-funded.
The purpose of the disclosure is to inform Medicare beneficiaries of whether the employer’s drug coverage is expected to provide coverage comparable to the Medicare Part D prescription drug coverage. Medicare-eligible employees should keep the creditable coverage notice for future reference. If a Medicare-eligible employee or dependent becomes eligible for Part D and decides not to enroll because he or she has employer-sponsored coverage, a creditable coverage notice allows them to enroll in Part D later without being charged a higher premium. For individuals enrolled in a non-creditable drug plan, failure to enroll in Part D when first eligible will result in higher premium if they enroll in Part D later.
The Notice of Creditable Coverage must be distributed to all individuals enrolled in an employer’s group health plan that fall within one of the following categories:
- Active employees or COBRA participants over age 65 entitled to Medicare (Part A and/or B)
- Spouses of active employees over age 65 entitled to Medicare (Part A and/or B)
- Dependent children of active employees entitled to Medicare (Part A and/or B) regardless of age
- Retirees over age 65 entitled to Medicare (Part A and/or B)
- Spouses of active employees and/or retirees entitled to Medicare Part A and/or B
- Dependent children of a retiree entitled to Medicare (Part A and/or B) regardless of age
Because employers typically do not know if a dependent is eligible for Medicare due to disability or end-stage renal disease, many employers provide the notice to all covered employees.
An employer is only required to provide one Notice of Creditable Coverage per household even if more than one member of the household is covered by the employer group health plan and enrolled in Medicare.
Electronic Distribution : Employers can distribute these notices electronically to participants who have the ability to access electronic documents at their regular place of work as long as those participants have access to the electronic information system on a daily basis as part of their work duties. Employers can distribute electronically under these circumstances without the participant’s consent. Participants must be informed, however, that they are responsible for providing a copy of the electronic notice to their Medicare-eligible dependents covered under the group health plan.
Employers are also required to notify CMS online annually that they have sent out these Part D notices. The notice to CMS is due within 60 days after the start of the plan year.
Following are links to the Creditable Coverage Guidance & Simplified Determination form, along with models for the creditable and non-creditable coverage notices provided by CMS. The models can be easily customized for your employees.
Creditable Coverage Guidance & Simplified Determination
Model Creditable Coverage Disclosure Notice
Model Creditable Coverage Disclosure Notice (Spanish)
Model Non-Creditable Coverage Disclosure Notice
Model Non-Creditable Coverage Disclosure Notice (Spanish)
Additional information on Creditable Coverage may be obtained here.
Other resources to answer your questions can be found at www.cms.gov.