Are you an employer, providing group health benefits that offers prescription drug coverage? Are any of your employees aged 65 or older, or are any of their dependents disabled? Do you provide group healthcare benefits to retired employees, aged 65 or older? Are any former employees disabled, or on COBRA coverage?
Okay, you need to pay very close attention to this notice.
According to the Medicare Modernization Act, you must notify your Medicare-eligible employees, by October 15, as to whether their prescription drug coverage is “creditable coverage”. This rule applies to both employees who are eligible for Medicare, as well as their dependents, if any.
So, who is “Medicare eligible”? We all become eligible for Medicare when we turn 65, so this notice applies to any of your employees who are currently age 65 or older.
What is “creditable coverage”? It means that a particular healthcare plan is expected to pay (on average) at least as much as standard Medicare Part D coverage. This allows your Medicare-eligible employee to make a decision as to whether enrolling in a Part D plan might benefit them.
If your employee has a lapse in “creditable” prescription drug coverage after turning 65, that lasts for more 63 days or longer, he or she could be penalized. They will also have to wait until the following October (the Annual Election Period) to join a Part D plan. So, your employees who are eligible for Part D really need to know whether their current coverage is creditable or not. This way they can make a decision regarding Part D coverage, without incurring a late enrollment penalty.
You also must notify CMS. You must also notify the Centers for Medicare and Medicaid Coverage (CMS) that you have sent these Part D notices to your employees. This notice is due within 60 days of the start of the plan year… So you don’t have to send it now, but it might be better to get it out of the way quickly, before end-of-year business distracts you.
So, on that note, give us a call if you have questions about this Part D notice. We can help you understand what you need to do, so that you can comply adequately with the law. Remember, you must send this notice by October 15.