Every year, employers must provide their Medicare-eligible employees covered under their group health plan a written notice regarding Medicare Part D.
This notice must be received by the employee by October 14th
This notice must contain details about coverage status of the prescription drug benefit. The notice must inform the employee if the prescription drug benefit on their group healthcare plan is as good as the standard Medicare Part D Plan.
There are two types of Medicare Part D notices that need to be sent by October 14th:
- A creditable coverage notice should be provided when the drug benefit is at least as good as the standard Medicare Part D plan.
- A non-creditable coverage notice should be provided when the drug benefit isn’t as good as the standard Part D plan.
Other times when the Medicare Part D notice needs to be sent:
- When creditable coverage status changes
- When a Medicare-eligible employee first joins the plan.
Who should receive the Medicare Part D notice:
- Any covered dependents who are eligible for Medicare,
- Employees who become eligible for Medicare due to a disability.
- COBRA beneficiaries
- Covered retirees who are eligible for Medicare
As a best practice, employers may want to provide this notice to everyone covered under their group health plan.
Please note, anyone who is eligible for Medicare but is late to enroll is subject to a late enrollment penalty unless they have suitable coverage elsewhere. This penalty is calculated at 1% of the base beneficiary premium for every month the person is without creditable coverage.
In August, 217 the Centers for Medicare and Medicaid Services (CMS) announced the average basic premium for Medicare Part D prescription drug plan was projected to decline $1.20 from the 2017 rates to a new level of $33.50. Open enrollment for Medicare begins on October 15th and ends on December 7th.