Medicare Part D: Plan Sponsors Must Provide Notices of Credible Coverage to Participants by October 15th

9/6/2023

4-Minute Read

Disclosure to Individuals 

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 Medicare Part D (Prescription Drug coverage). The enrollment period for Medicare Part D is October 15th – December 7th. The October 15th deadline for distributing the Notice 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 fully insured or self-funded. 

Purpose of Disclosure  

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.  

Two Versions of the Notice  

There are different versions of the required disclosure depending on whether the group health plan the participant is enrolled in is considered creditable coverage or not. 

• Creditable Coverage: A health plan’s prescription drug coverage is creditable when the amount the plan expects to pay, on average, for prescription drugs for individuals covered by the plan is the same or more than what standard Medicare prescription drug coverage would be expected to pay.  

• Non-Creditable Coverage: A health plan’s prescription drug coverage in non-creditable when the amount the plan expects to pay, on average, for prescription drugs for individuals covered by the plan is less than that which standard Medicare prescription drug coverage would be expected to pay. 

If you offer Anthem group health coverage, click here to see a list of their plans and identify which version of the notice to send. Many plan sponsors customize the Model Medicare Part D Notices provided by the Centers for Medicare and Medicaid Services (CMS) to provide plan participants with information specific to their situation. 

Disclosure Recipients  

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 

Since plan sponsors often do not know with certainty which of their Plan’s enrollees are eligible for Medicare, we recommend distributing the Part D Notice to all benefit-eligible employees. There is no penalty for distributing the Notice to a non-Medicare-eligible individual.

Model Notices 

CMS provides model creditable coverage notices in their website here. Model notices are available in both English and Spanish. Morris & Garritano also offers models notices for clients use. 

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 (i.e. wired at work). 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. 

Disclosure to CMS 

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, or no later than March 1 for calendar year plans. Click here for the online CMS Disclosure site:https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosureForm

Timelines 

Make note of the following time periods associated with the Medicare creditable coverage notice requirements: 

• October 15th: Deadline to provide Medicare Part D creditable coverage notices.  
• October 15th – December 7th: Medicare annual enrollment period for Pard D, Prescription Drug Coverage.  

• March 1st: Deadline to provide online disclosure to CMS (for calendar year plans). Provide 60 days after plan year start for non-calendar year plans.  

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This information is general and is provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.