Medicare Part D Notices Are Due by October 14, 2016

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 October 15, 2016—the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices for employers to use.

Power Kunkle issues Custom/Distribution Ready Medicare D Disclosure Notices annually to our clients, as well as any additional guidance.  If you did not receive your custom notice or have any additional questions please contact your Client Manager.

This notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and who choose not to enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date. Thus, although there are no specific penalties associated with this notice requirement, failing to provide the notice may trigger adverse employee relations issues.

Employers should confirm whether their health plans’ prescription drug coverage is creditable or non-creditable and prepare to send their Medicare Part D disclosure notices by October 14, 2016. To make the process easier, employers who send out open enrollment packets prior to October 15th often include the Medicare Part D notices in these packets.

Timing of Notices

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

If the creditable coverage disclosure notice is provided to all plan participants annually, before Oct. 15 of each year, items (1) and (2) above will be satisfied. “Prior to,” as used above, means the individual must have been provided with the notice within the past 12 months. In addition to providing the notice each year before Oct. 15, plan sponsors should consider including the notice in plan enrollment materials provided to new hires.

Method of Delivering Notices

Plan sponsors have flexibility in how they must provide their creditable coverage disclosure notices. The disclosure notices can be provided separately, or if certain conditions are met, they can be provided with other plan participant materials, like for example, annual open enrollment materials. The notices can also be sent electronically in some instances.

As a general rule, a single disclosure notice may be provided to the covered Medicare beneficiary and all of his or her Medicare Part D eligible dependents covered under the same plan. However, if it is known that any spouse or dependent who is eligible for Medicare Part D lives at a different address than where the participant materials were mailed, a separate notice must be provided to the Medicare-eligible spouse or dependent residing at a different address.

Electronic Delivery

Creditable coverage disclosure notices may be sent electronically under certain circumstances. CMS has issued guidance indicating that health plan sponsors may use the electronic disclosure standards under Department of Labor (DOL) regulations in order to send the creditable coverage disclosure notices electronically. According to CMS, these regulations allow a plan sponsor to provide a creditable coverage disclosure notice electronically to plan participants who have the ability to access electronic documents at their regular place of work, if they have access to the sponsor’s electronic information system on a daily basis as part of their work duties.

The DOL’s regulations for electronic delivery require that:

  • The plan administrator use appropriate and reasonable means to ensure that the system for furnishing
  • Also, if a plan sponsor uses electronic delivery, the sponsor must inform the plan participant that the participant is responsible for providing a copy of the electronic disclosure to their Medicare-eligible dependents covered under the group health plan.

Disclosure to CMS

In addition to the Medicare D notice to employees, 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. At a minimum, the CMS creditable coverage disclosure notice must be provided at the following times:

  • 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.

Plan sponsors are required to provide the disclosure notice to CMS through completion of the disclosure form on the CMS Creditable Coverage Disclosure web page. This is the sole method for compliance with the CMS disclosure requirement, unless a specific exception applies.

 

DISCLOSURE

The information provided herein is intended solely for the use of our clients. You may not display, reproduce, copy, modify, license, sell or disseminate in any manner any information included herein, without the express permission of the Publisher or Publishers of articles within.

The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.