Medicare Part D became a part of the health care landscape with the introduction of the Medicare Modernization Act of 2003.  As if Medicare was not already complicated, now it is even more so.  This article will focus on the responsibilities that employers have in communication to employees and Centers for Medicare and Medicaid Services (CMS.)

There are two critical requirements that each employer must satisfy.  First of all, each employers must provide creditable or non-creditable coverage notice to all Medicare-eligible individuals who are covered under, or who apply for, the entity's prescription drug plan (Part D eligibles), whether active employees or retirees, at least once per year.

This creditable coverage notification must be communicated to all employees by November 15th of each year.  Technically, Part D eligible employees should also be told of the status prior to enrolling in the employer's health plan or upon request by the beneficiary or if your health plan's prescription drug status ends or changes. 

I would recommend that you put some form of notification in memorandum format in each employee's payroll check prior to November 15th and let them know if your plan is creditable or not.

What does this mean creditable?  I am glad you asked.  Creditable if the value of the prescription coverage is equal to or exceeds the benefit of Medicare Part D.  The way that most health insurers are interpreting the regulation is that plans that have copayments are creditable and plans that have no copayments but have prescriptions subject to deductible and coinsurance are non-creditable.

Talk to your benefits advisor to get some help on this complex matter.  Oh yea, you need to tell CMS that your plan is either creditable or non-creditable.  You can go to the CMS website to let me them know this information by linking on to:

https://www.cms.hhs.gov/CreditableCoverage/45_CCDisclosureForm.asp 

CMS has determined that if your plan meets ALL of the following criteria, then your plan is creditable:

(1) provides coverage for brand and generic prescriptions, (2) provides reasonable access to retail providers and for mail order coverage, (3) is designed to pay on average at least 60 percent of participants' prescription expenses, and (4) for employers with stand-alone prescription drug plan has no annual limit or at least $25,000 in annual prescription drug coverage per eligible. 

If employers have integrated health coverage, the integrated health plan has no more than a $250 deductible per year, has no annual benefit maximum or a maximum annual benefit payable by the plan of at least $25,000 and has no less than a $1,000,000 lifetime combined benefit maximum.

Each employer must provide a disclosure to CMS on an annual basis, via the above online form.  While it is the employers responsibility to identify the status of their plan, we recommend this be done each year at the same time as the notification goes out to your employees.  This is a complex law with varying interpretations of the filing requirements.    Contact our office if you have any questions on the status of your health plan and its' creditable coverage situation.     

Information to input on the CMS website:

• General information about the filer. The name of the entity offering coverage, the Employer Identification Number (EIN), address and telephone number.
• Type of coverage. For private employers, the type of coverage in most cases would be marked as "Employer Sponsored Plan".
• Number of benefit options offered by the entity. For example, if an employer offers HMO and PPO options to Part D eligible individuals, the number would be "2".
• Creditable coverage status of the benefit options. An employer that offers more than one benefit option may combine the data for all the options that are creditable and combine the data for all the options that are not creditable.
• The period covered by the disclosure notice.
• An estimate of the number of Part D eligible individuals covered under the plan(s) as of the first day of the plan year.
• An estimate of the number of Part D eligible individuals expected to be covered through a group health retiree plan.
• The date the annual notice of creditable coverage was provided to Part D eligible individuals.
• The date the creditable coverage notice was provided to Part D eligible individuals in the case of a change in creditable coverage status.
• The name, title and email of the individual completing the form.

Conclusion

The long and short of CMS requirements is that if you have renewed your health plan in 2007 and have not yet gone to the CMS site listed above, do so in the very near future.  If your health plan renews yet this year, go to the CMS website within 60 days of your renewal and complete the online survey.  Lastly, every employer needs to tell Medicare eligibles about their plan's status of creditable or non-creditable by November 15th.

Other CMS Links:

The CMS provides guidance on creditable coverage issues at http://www.cms.hhs.gov/creditablecoverage.

The guidance about filing the disclosure notice with the CMS is at http://www.cms.hhs.gov/CreditableCoverage/Downloads/Disclosure2CMSGdnc.pdf.

As mentioned above, the electronic disclosure form to be filed with the CMS is at http://www.cms.hhs.gov/apps/ccdisclosure/default.asp.

Also, the CMS may release Question and Answers relating to Creditable Coverage issues from time to time on the CMS website under the MMA Questions and Issues Database website at http://www.cms.hhs.gov/. Information to disclose to CMS

The electronic disclosure form requests the following information: