What Multiemployer Plan Trustees Need to Know About Medicare Part D

IS YOUR FUND REQUIRED TO NOTIFY PARTICIPANTS? Notices Must Be Issued By November 15, 2005.

Does your multiemployer health fund cover anyone who is eligible for Medicare (whether because of age or disability)? If so, your fund has new notice obligations, even if it does not cover retirees.

Even if your fund is not eligible for, or not interested in, the subsidy, if your fund covers anyone who is eligible for Medicare, additional obligations apply to your fund. Under the new law, all plan sponsors of a health plan that covers an individual who is eligible for the new "Medicare Part D" prescription drug benefit must issue a notice by November 15, 2005 indicating whether the plan's drug coverage is "creditable."

For purposes of this new notice, a health plan's drug coverage is creditable if it is as good, on average, as the benefits provided by Part D. This determination is not quite as sophisticated as the certification required for the subsidy and may not necessarily require an actuary's involvement.

Who is entitled to this new notice?

The notice must be sent to plan participants who are eligible for Medicare Part D. This includes anyone who is entitled to Medicare Part A or enrolled in Part B. It also includes workers, retirees, and spouses aged 65 and older, as well as individuals under age 65 who are eligible for Medicare because they have received Social Security Disability benefits for two or more years or they have end stage renal (kidney) disease. Because of the complexities involved in identifying all individuals who are entitled to receive the notice, trustees may want to consider providing the notice to all plan participants.

When must the fund send the notice?

The notice must be given to participants as they become eligible for Part D, to new participants who are eligible for Part D when they enroll in the plan, annually before the Part D open enrollment period, when the plan's creditable coverage status changes, and upon an individual's request. Due to the difficulty of identifying all relevant recipients at all relevant times, plan sponsors may wish to simply provide the notice to all participants.

What should the notice say?

CMS has issued model notices, instructions, and a simplified method to determine whether your plan's drug coverage is "creditable." This information is posted on the CMS website at www.cms.hhs.gov/medicarereform/Credcovrg.asp). Trustees may want to tailor the notice to their particular fund.

What should trustees do before November 15?

Before November 15^th, trustees must:

· Determine whether your fund's drug coverage is "creditable."

· Develop procedures for distributing creditable coverage notices.

· Create and distribute a notice to participants informing them of the plan's creditable coverage status by November 15, 2005.

If you would like assistance with your fund's Medicare Part D compliance, including your creditable coverage certification, subsidy application, or Medicare Part D notice, please contact Stephanie Smithey or Linda Rowings.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.