Employers whose health care plans include prescription drug benefits for active employees (or retirees) who are Medicare eligible must notify those covered individuals by Oct. 15 of each year whether their drug benefit is “creditable coverage”; meaning that it is expected to cover, on average, as much as the standard Medicare Part D prescription drug plan. The Centers for Medicaid and Medicare Services (CMS) require that companies provide the notice before the annual Medicare Part D election period which is October 15 to December 7 each year for coverage beginning January 1. The CMS Creditable Coverage website, www.cms.gov, provides complete text of the guidance and sample disclosure notices.
The creditable coverage notice must be given to all Part D eligible individuals who are covered under, or apply for, an employer’s prescription drug benefits plan. This requirement applies to Medicare beneficiaries who are active employees and those who are retired, as well as Medicare beneficiaries who are covered as spouses under active or retiree coverage. We suggest that employers provide this notice to all covered employees.
CMS also requires plan sponsors to provide notice of their creditable coverage status to Part D eligible members at other times, including:
• Before an individual’s initial opportunity to enroll in Part D (generally satisfied by the requirement to provide the notice annually to all Medicare eligible employees prior to October 15).
• Before the effective date of coverage for any Medicare-eligible individual that joins the employer’s plan.
• When the plan’s prescription drug coverage ends or its creditable coverage status changes.
• Upon an individual’s request.