Posted: August 30, 2019 by Paul Roberts
Medicare’s Annual Election Period (AEP) begins on October 15, 2019, and ends on December 7, 2019.
Employers of any size providing group prescription drug coverage to Medicare-eligible individuals – including both employees and dependents – must distribute notices to such individuals indicating whether their employer-sponsored prescription drug coverage is creditable or non-creditable.
When prescription drug coverage is “creditable,” the prescription drug benefit is equivalent to (or richer than) the prescription drug coverage provided by Medicare Part D. That is, the prescription drug coverage provided by the employer-sponsored plan is expected to pay, on average, as much as the standard Medicare Part D prescription drug coverage.
“Non-creditable” prescription drug coverage is the opposite; it is less rich than Medicare Part D’s prescription drug coverage. In other words, non-creditable coverage means the prescription drug coverage provided by the employer-sponsored plan is not expected to pay, on average, as much as the standard Medicare Part D prescription drug coverage.
These required notices, called Medicare Part D Disclosure Notices, must be distributed to all impacted individuals (those who are eligible for Medicare coverage) before the Medicare AEP begins on October 15, 2019.
The information in these notices is essential for Medicare-eligible individuals to make a decision regarding whether or not to enroll in a Medicare Part D plan during the AEP. Any person who does not maintain creditable coverage for more than 62 days after his or her initial Medicare enrollment period is subject to a late enrollee penalty for the remainder of the time on Medicare Part D coverage.
Employers are likely to turn to you, as their health insurance broker, for help determining whether or not the prescription drug coverage they sponsor is creditable. They may also seek an understanding of what to distribute to employees – and when. Word & Brown has you covered.
Medicare Part D Charts – Creditable or Non-Creditable Designation
We’ve surveyed our carriers and have placed creditable/non-creditable designations in easy-to-reference charts for all carriers’ Small Group plans and Large Group plans. Refer to these charts to determine whether the coverage sponsored by the employer is creditable or non-creditable.
Creditable Coverage Model Notice
The Centers for Medicare & Medicaid Services (CMS) provide model notices to meet these distribution requirements, along with additional information on the required distribution. The model notices must be customized by the employer, as indicated on the model notices, before the employer releases them to Medicare-eligible individuals. There are different notices for creditable coverage and non-creditable coverage. The forms are also available in Spanish.
CMS Online Reporting Requirement for Employers
Employers providing prescription drug coverage to Medicare-eligible individuals must also submit an online disclosure to CMS annually, and upon any change that affects creditable status. The disclosure is due no later than 60 days from the beginning of a plan year, within 30 days after the termination of prescription drug coverage, or within 30 days after any change in creditable coverage status. This disclosure is required whether the employer-sponsored group coverage pays primary or secondary to Medicare coverage.
For help on calculating group size relating to “Medicare Primary” vs “Medicare Secondary,” COBRA, and the Affordable Care Act (ACA), refer to Word & Brown’s Group Count Reference (CA) or Group Count Reference (NV).
For additional support, contact WBCompliance via phone at 866.375.2039 or by email at ComplianceSupport@wordandbrown.com.
More about the author:
Paul Roberts is the Director of Education and Market Development at the Word & Brown General Agency, responsible for leading Word & Brown’s educational initiatives and providing oversight of the WBCompliance team in California and Nevada. Paul is a tenured veteran in the health insurance industry, carrying a long history of health insurance experience and an education in business management. He has performed nearly every operational role at Word & Brown General Agency in his fourteen-year tenure, and was a leader in the creation and development of Word & Brown’s legendary in-house Compliance team. Paul is passionate about education and keeping health insurance brokers and employers in-line with compliance. Paul can be found at many industry events across the nation delivering CE, HRCI and SHRM courses, educating himself, advocating for the role of the agent, and working directly with brokers and employers. This gives Paul the best ability to innovate and improve Compliance and educational resources to support the businesses and abilities of brokers. Paul is passionate about education, diversity and helping others. He is grateful for his opportunity to support both brokers and employers and is committed to your success.
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