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Medicare Part D 'Creditable Coverage' Disclosures Due October 15th –

note delivery method listed below

Each year, group health plan sponsors that provide prescription drug coverage to individuals eligible for Medicare Part D must disclose to the Centers for Medicare & Medicaid Services (CMS) whether that coverage is “creditable” or “non-creditable.” The disclosure obligation applies to all plan sponsors that provide prescription drug coverage, even those that do not offer prescription drug coverage to retirees. All plans must submit this year’s disclosure to CMS by October 15th.


Individuals who fail to enroll in Medicare Part D prescription drug coverage when first eligible may be subject to late enrollment penalties if they go 63 consecutive days or longer without creditable prescription drug coverage. Prescription drug coverage is “creditable” when it is at least actuarially equivalent to Medicare Part D prescription drug coverage. Because of this potential penalty, both Medicare Part D-eligible individuals and the Centers for Medicare & Medicaid Services (CMS) need to know whether a group health plan’s prescription drug coverage is creditable or non-creditable. 


Plan sponsors that provide prescription drug coverage must:


• Furnish Part-D-eligible individuals with a notice disclosing the creditable or non-creditable status of their coverage before the beginning of the Medicare Part D annual enrollment period [generally by Oct. 15] and at certain other times. (March 1st for Calendar Year Plans)


• Disclose to CMS, on an annual basis and at certain other times, whether the coverage they provide is creditable or non-creditable. The deadline for disclosure to CMS by calendar year plans is March 1. 

Making Annual Disclosures to CMS:

Plan sponsors generally must disclose creditable coverage status to CMS no later than 60 days after the beginning of each plan year. Disclosure is made online using the “Disclosure to CMS Form” available on the CMS website. An entity that does not offer outpatient prescription drug benefits to any Part D-eligible individual on the first day of its plan year is not required to complete the CMS disclosure form for that plan year. Plan sponsors that contract directly with Medicare as a Part D plan or that contract with a Part D plan to provide qualified prescription drug coverage are also exempt from the CMS disclosure requirement. 

In addition to the annual disclosure, plan sponsors must submit a new disclosure form to CMS within 30 days following any change in the creditable coverage status of a prescription drug plan. This includes both a change in the coverage offered so that it is no longer creditable and the termination of a creditable coverage option. A new disclosure form must also be submitted to CMS within 30 days after the termination of a prescription drug plan.

Note: The disclosure requirement applies to all plan sponsors that provide prescription drug coverage, even those that do not make prescription drug coverage available to retirees.

Calendar year plans must submit this disclosure to CMS by March 1 & October 15th

Information Needed to Complete Disclosures

In preparing the disclosure to CMS, plan sponsors need to: 

• Identify the number of prescription drug options they offer to Medicare-eligible individuals. This is the total number of benefit options they offer, excluding any benefit options they are claiming under the retiree drug subsidy (RDS) program (i.e., benefit options for which the plan sponsor is expected to collect the subsidy). For example, a plan sponsor with an HMO, a PPO, and an indemnity option available under its plan would identify three prescription drug options.   

• Determine the number of benefit options offered that are creditable coverage and the number that are noncreditable.

• Estimate the total number of Part D-eligible individuals expected to have coverage under the plan at the start of the plan year (or, if both creditable and non-creditable coverage options are offered, estimate the total number of Part D-eligible individuals expected to enroll in each coverage category). This includes Part D-eligible active employees, retirees, and disabled individuals and any of their Part D-eligible dependents, and any individuals on COBRA who are Part D-eligible. The estimate should not include any Part D-eligible individuals being claimed under the RDS program. If a plan sponsor provides retiree prescription drug coverage, it will have to be able to provide a similar estimate of Part D-eligible individuals who have retiree coverage at the start of the plan year.

Note: Individuals who will become Part D eligible after the start of the plan year should not be included in the count for that year, but they must be provided a notice of creditable or non-creditable coverage prior to their initial enrollment period for Part D.

• State the most recent calendar date on which the required notices of creditable or non-creditable coverage were provided. 

Delivery Method

There have been no revisions to the 2015 model notices provided by the Centers for Medicare & Medicaid Services (CMS) and [plan sponsors] should continue to use the 2011 model notices. CMS posts the Model Disclosure Notices on its website at Creditable Coverage Model Notice Letters.

Notices do not have to be sent as a separate mailing; they can be provided as part of enrollment/renewal or other plan information materials. If the notice is included with other plan information, the notice must be “prominent and conspicuous.” Additionally, a single notice can be provided to a covered Medicare individual and all his or her covered Medicare-eligible dependents. However, a separate notice is required “if it is known that any spouse or dependent that is Medicare eligible resides at a different address than from where the participant/policyholder materials were provided.”

The guidance also clarifies that notices can be electronically distributed. These regulations permit electronic distribution to participants “who have the ability to access electronic documents at their regular place of work if they have access to the plan sponsor’s electronic information system on a daily basis as part of their work duties.”

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