Medicare Part D imposes disclosure requirements on employers that offer group health plans with prescription drug coverage to Medicare-eligible individuals.
Plan sponsors must disclose whether their prescription drug coverage is creditable, i.e., whether it is expected to pay as much as or more than standard Medicare Part D coverage.
Deadline: October 15, 2024
Each year, employers must:
- Provide Medicare Part D Creditable Coverage Disclosure Notices to Medicare-eligible individuals by October 15 (before the Medicare Part D annual enrollment period).
- Complete the online CMS disclosure form by the same date.
Why This Matters:
Medicare beneficiaries without creditable prescription drug coverage who delay enrollment in Part D may pay late enrollment penalties.
While there are no direct penalties for employers who miss the notice deadline, failure to provide the disclosure could negatively impact employee healthcare decisions and, by extension, affect employee satisfaction with benefits.
What Is Creditable Coverage?
Creditable coverage means that the expected amount of paid claims under the group health plan’s prescription drug coverage is at least equal to the standard Medicare Part D benefit.
For plans with multiple benefit options (e.g., PPO, HDHP, HMO), each option must be tested separately.
Key Steps for Employers
- Determine if your plan’s prescription drug coverage is creditable or non-creditable.
- Provide the appropriate disclosure notices to eligible individuals before October 15.
- Submit the CMS Disclosure to CMS Form electronically by the same deadline.
- Consider including the notices with open enrollment materials or benefit communications to streamline the delivery process.
Notification Requirements
You must provide the Medicare Part D disclosure notice:
- Before the Medicare Part D annual election period (October 15–December 7)
- Before an individual’s initial eligibility for Medicare Part D
- Before the effective date of coverage for a Medicare-eligible participant
- When coverage ends or changes (e.g., creditable becomes non-creditable or vice versa)
- Upon request
If notices are issued annually before October 15, the first two requirements are automatically satisfied. Employers are also encouraged to include notices in onboarding materials for new hires.
How to Deliver Notices
Employers can deliver notices:
- As standalone communications, or
- Alongside other benefit materials (such as open enrollment packets), if specific conditions are met.
- Electronically, in certain cases, following DOL e-delivery guidelines.
If a Medicare-eligible dependent lives at a different address than the employee, a separate notice must be sent to that individual.
CMS Reporting Requirement
Employers must submit the Disclosure to CMS Form online via the CMS website annually by October 15, stating whether coverage is creditable or non-creditable.
Have Questions?
Please do not hesitate to reach out to the Group Benefits team at Mason-McBride. We’re here to discuss your particular situation further if you have additional questions.
Thank you for allowing Mason-McBride to serve you!
Article By: Amy Purcilly
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Sources: https://www.keystoneinsgrp.com; https://www.cms.gov