Employers who provide prescription drug coverage to workers, dependents or retirees age 65 or older—those who are eligible for Medicare Part D—should be ready for March 1. That’s the day by which calendar-year plans must disclose to the Centers for Medicare and Medicaid Services whether their drug plan is “creditable” -- at least as good as Medicare Part D’s prescription drug benefit -- or “noncreditable” -- not as good.

A report from the Society for Human Resource Management reminds employers that Medicare-eligible employees, retirees and dependents, too, must be notified at least once a year whether the drug coverage they’re offered is creditable or noncreditable. Those notices are required each year before the annual Part D enrollment window, which opens each Oct. 15.

Part D-eligible individuals, SHRM clarifies, are generally age 65 and older or under age 65 and disabled, and include active employees and their dependents, COBRA participants and their dependents, and retirees and their dependents.

The report also cites Kin Chan and Leslye Laderman, consultants at New York City-based Conduent HR Services, who write in a blog post that plan sponsors who contract directly with Medicare as a Part D plan, or who contract with a Part D plan to provide qualified prescription drug coverage, are exempt from the CMS disclosure requirement for individuals who participate in the Part D plan.

Notices to Part D-eligible individuals also have to be provided before an individual enrolls in Medicare Part D coverage for the first time; before a newly eligible employee or dependent enrolls in the employer’s plan; when the plan stops providing drug coverage, or when the creditable nature of the drug coverage becomes noncreditable or vice versa; and upon request.

Notification to employees, retirees and dependents can be done by a blanket notice to all covered members that’s included in annual open enrollment packets before the deadline, rather than having to seek out each eligible individual.

Disclosures to CMS are made online using the Disclosure to CMS Form on the CMS website, in accordance with guidance and instructions posted on the site. Plans that do not offer drug coverage to anyone who is Medicare eligible are exempt from the disclosure requirement.

The form is different this year, so employers need to watch for that. Although the information requested is pretty much the same, the format has been altered, according to Lisa Carlson, a senior attorney at Kansas City, Missouri-based Lockton Compliance Services.

Carlson is quoted saying, “Questions relating to your specific plan and population do not appear until after you identify whether your coverage is creditable, noncreditable or a combination of the two. This has caused some confusion, as it looks slightly different than the prior online form since expected questions are not immediately seen.”

Chan and Laderman suggest that employers go through the form’s instructions carefully, and take several steps before completing it.

First, they should identify the number of prescription drug options offered to Medicare-eligible individuals, then determine the number of benefit options offered that are creditable coverage and the number that are noncreditable. They should then estimate the total number of Part D-eligible individuals expected to have coverage under the plan at the start of the plan year (excluding any Part D-eligible retirees being claimed under the Medicare retiree drug subsidy program or retirees in an employer group waiver plan).

Finally, they should find the most recent calendar date when required notices of creditable and noncreditable coverage were provided to Medicare-enrolled employees, retirees and dependents.

Instant Insights /

Employer due date approaching for drug coverage disclosures

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