Medicare Part D Creditable or Non-Creditable Disclosure to CMS
The Medicare Modernization Act requires all employers to complete an Online Disclosure to CMS to report the creditable coverage status of their prescription drug plan. The prescription drug coverage is “creditable” if it is expected to pay, on average, as much as the standard Medicare prescription drug coverage (Medicare Part D); otherwise, it is “non-creditable.” The Online Disclosure should be completed annually no later than 60 days from the beginning of the plan year.
Employers should ensure the Online Disclosure to CMS is completed within 60 days of the start of the plan year. For example, employers with plan years beginning 1/1/2017 should submit their Online Disclosure to CMS no later than 3/1/2017. The Online Disclosure can be completed here. Sequoia clients should also be on the lookout for an e-mail from their Client Service Manager with the Online Disclosure instructions.
Medicare Part D Creditable or Non-Creditable Notice
The Medicare Modernization Act requires all employers to provide written notice to Medicare eligible individuals prior to October 15 each year regarding whether their prescription drug coverage is creditable or non-creditable. The prescription drug coverage is “creditable” if it is expected to pay, on average, as much as the standard Medicare prescription drug coverage (Medicare Part D); otherwise, it is “non-creditable.” The notice must be provided to all Medicare eligible active working individuals and their dependents. Since employers may not be aware of whether a current employee has any dependents that are Medicare eligible, employers should send the notice out to all employees.
Most employers provide the notice to employees within 60 days of the beginning of the plan year, since this is when employers report the creditable coverage status with the Centers for Medicare & Medicaid Services (CMS) (see below for details). Therefore, as long as employers continue to consistently provide the notice to all new hires, employers who have already provided this notice to employees are not required to reissue the notice again during the year. However, it is recommended that employers nonetheless redistribute the notice to all employees closer to the October 15 Medicare Part D open enrollment date, as this ensures that all employees have the notice on hand and reduces any need for them to re-request it from their employer. For Sequoia clients, if you are unable to locate a copy of the notice, please reach out to your Client Service Manager and s/he will be happy to assist you.
Employers should ensure that their Medicare Part D Creditable or Non-Creditable Disclosure Notice has been distributed to all employees prior to October 15.
Additional information is available on the CMS website.
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