Compliance Corner: Remind Your Employees About Medicare Part D Creditability!
Now is the time to remind plan participants about Medicare Part D Creditability. The federal government requires that employers notify plan participants who may be making decisions about Medicare coverage of their plan’s status so they can make an informed decision. The deadline is October 14, 2022.
To make life a little easier for you, ARC Benefit Solutions began preparing Annual Notice Packets in PDF that include the Medicare Part D Creditability (or Non-Creditability) Notices based on the plan that will be in effect during the Open Enrollment Period. It would have been sent via email with your open enrollment materials or under separate cover.
If you’ve provided the Annual Notice packet to your employees for your plan that was effective November 1, 2021, or after—congratulations! You’ve met the requirement. You may want to remind employees that the notice has been provided and how they can obtain a copy of it if they need it again.
If you’ve not provided the Annual Notice packet to your employees, here is a brief FAQ to help you understand your obligations:
What notices must employers provide to Medicare Part D eligible individuals?
Employers that offer prescription drug coverage to active or retired employees who are eligible for Medicare Part D, or their spouses/dependents, must notify each Part D eligible individual who is enrolled in or seeks to enroll in this coverage whether the coverage qualifies as creditable coverage under the Part D rules. If the coverage is not creditable, the notice must explain that there are limits on when the individual may enroll in a Part D plan during a year, and that he or she may be subject to a lifetime late enrollment penalty under Part D.
Why must plan sponsors tell Part D eligible individuals whether their prescription drug coverage is creditable?
Plan sponsors must tell Part D eligible individuals whether their prescription drug coverage is creditable so that the Medicare eligible individuals can compare their existing coverage with the coverage provided under a Part D plan. Part D eligible individuals who are not covered under creditable prescription drug coverage may be subject to a permanent late enrollment penalty in the form of higher premiums in the event that they choose to enroll in Part D coverage at any time after the end of their Initial Enrollment Period.
When must the creditable coverage disclosure notices be provided?
The notices must be provided to Part D eligible individuals annually, before October 15 of each year. Furthermore, the notices must be provided:
- Before the individual’s Initial Enrollment Period for Part D;
- Before the effective date of enrollment in the prescription drug coverage;
- Upon any change that affects whether the coverage is creditable prescription drug coverage; and
- Upon request.
We generally recommend including the Part D Notice in the Annual Packet and give to all employees to ensure they are aware for any Part D eligible spouses or dependents. Some employers may opt to send separately so as not to overwhelm employees with information.
How must the creditable coverage disclosure notices be provided?
Health plan sponsors have flexibility in the form and manner of providing creditable coverage disclosure notices to beneficiaries. The notice need not be sent as a separate mailing. It may be provided with other plan participant information materials, including enrollment and/or renewal materials.
The sponsor may provide a single disclosure notice to the covered Medicare individual and all Medicare-eligible dependent(s) covered under the same plan. However, the sponsor is required to provide a separate disclosure notice if it is known that any spouse or dependent who is Medicare-eligible resides at a different address than from where the participant materials were provided. If a plan sponsor chooses to incorporate the creditable coverage disclosure notice with other plan participant information, then the disclosure must be prominent and conspicuous. This is why we suggest a reminder email or notice to employees around this time of year if Annual Notices were provided at Open Enrollment last fall or in the spring.
If you have questions about your Part D Notice or need more help, please feel free to reach out to your ARC Client Relations Advisor.
Resources
Visit CMS’ creditable coverage webpage for information about creditable coverage disclosure notices.
