Employers Must Make Medicare Part D Creditable Coverage Disclosure to CMS
CMS Issues Guidance on Making Required Disclosure

Employers that sponsor prescription drug coverage for their employees are required to provide notice to the Centers for Medicare and Medicaid Services (CMS) of whether their drug coverage is as good as or better than the drug coverage provided by the Medicare Part D Prescription Drug Program. Coverage that is as good as or better than Medicare Part D is "creditable" coverage. All other coverage is "non-creditable" coverage. This Creditable Coverage Disclosure requirement also applies to other entities that provide prescription drug coverage to Medicare Part D eligible individuals such as church plans, union/Taft-Hartley plans, state and local governmental plans, individual health insurers, tribal health plans, military and veterans plans, and Medigap plans.

On December 30, 2005, CMS posted guidance and the required disclosure form on its website for prescription drug coverage sponsors to provide the Creditable Coverage Disclosure to CMS. The exclusive method of providing the Disclosure to CMS is through an on-line form on the CMS Creditable Coverage Disclosure Web Page at http://www.cms.hhs.gov/creditablecoverage. The form requires information about the sponsor of the prescription drug coverage, the type of plan offering the coverage and the options available, estimates of the number of Medicare Part D eligible individuals and retirees covered by the sponsor's drug coverage, and the date the Creditable Coverage Notice was generally distributed to plan participants.

This new Disclosure must be completed on-line no later than March 31, 2006 for plan years that end in 2006. (This disclosure was originally due to CMS by November 15, 2005, but the due date was extended). For plan years that end in 2007 and beyond, disclosure of the plan's creditable coverage status must be made within 60 days after the beginning date of the plan year for which the entity is providing the disclosure to CMS. Disclosure must also be made within 30 days after the drug coverage terminates or changes its creditable coverage status.

For assistance in completing the CMS Creditable Coverage Disclosure, or for more information about Medicare Part D Prescription Drug Coverage and employers' obligations, please contact Tara Schulstad Sciscoe, Christopher Sears, Stephanie Smithey, or Linda Rowings.