Medicare Creditable Coverage Disclosures Due before October 15th
Sponsors of group health plans must provide notice to participants describing whether the prescription drug coverage provided under the employer-sponsored health plan is considered "creditable" for purposes of the Medicare Part D prescription drug program. An "employer-sponsored health plan" includes any group health plan that is established or maintained by an employer, if that plan offers prescription drug coverage to participants (whether retired or active workers) who are eligible for Medicare Part D.
This may include, for example, the following types of group health plans, to the extent they offer prescription drug coverage, regardless of whether they are self-insured or fully-insured:
high deductible health plans ("HDHPs"),
multiple employer welfare arrangements,
collectively-bargained health plans,
prescription drug plans,
health reimbursement accounts (stand alone or coupled with and HDHP),
on-site medical clinic programs,
certain wellness and/or employee assistance plans, and
some cancer policies.
The disclosure requirement does not apply to account-based medical plans such as health savings accounts ("HSAs"), health flexible spending accounts ("health FSAs"), or Archer medical savings accounts ("Archer MSAs"). However, disclosures would be required for HDHPs and other non-account benefits available to participants with these account types, to the extent the HDHP or other non-account benefit offers prescription drug coverage.
If you still sponsor Health Reimbursement Arrangements ("HRAs"), however, note that they may be creditable coverage as a stand-alone HRA or if combined with an HDHP. The notice must advise if the coverage provided through the HRA in either form, is creditable. Note that stand-alone HRAs may generally only be provided to former employees.
The notice must be provided to all participants who are eligible for Medicare Part D and may be included with the plan's open enrollment materials; however, due to the difficulty of identifying all participants who are eligible for Medicare Part D, we recommend the notice be provided to all participants. In addition, this notice must also be given to new enrollees in the plan eligible for Medicare Part D. The notice to participants must be provided prior to October 15th every year.
In addition to the participant notice, each employer that sponsors prescription drug coverage for their employees or retirees is required to report the creditable coverage status of its prescription drug plan to the Centers for Medicare & Medicaid Services ("CMS"). This online disclosure through the CMS website should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. This requirement does not pertain to the Medicare beneficiaries for whom entities are receiving the Retiree Drug Subsidy (RDS).
Our Firm’s actuary, Eric Dawes
, can assist you in determining whether or not the prescription drug coverage under your health sponsored is "creditable." If you have additional questions or concerns about the creditable coverage notice, please contact Sarah Funke
, Melissa Proffitt
, Chris Sears
, Tara Schulstad Sciscoe
or the Ice Miller employee benefits attorney
with whom you work.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.