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Medicare Part D Disclosure Due to Individuals

 September 9 2019     Diane Cross

With the bustle of open enrollment season, it is a good time to remind employers that the annual Medicare Part D Creditable Coverage Disclosure is due to individuals by October 14th.  

Overview
  • Employers with plans providing prescription drug coverage to individuals that are Medicare Part D eligible must disclose to such individuals and to the Centers for Medicare & Medicaid Services* (CMS) whether their drug benefit is equal to or better than (i.e. “creditable”) the Part D program. 
  • The disclosure to eligible individuals must be distributed prior to the start of the annual Medicare Part D enrollment period which runs October 15 through December 7 each year.   

Purpose
Knowing the status of their plan's prescription coverage helps Medicare-eligible individuals make an informed decision about enrolling in Medicare Part D.  This is especially important as individuals who do not enroll in Medicare Part D when first eligible will pay higher premiums permanently when they later enroll in Medicare Part D if they go 63 days or longer without creditable coverage.

Distribution
While the requirement is that only Part D eligible individuals need to receive a notice, distributing to all benefit eligible individuals will eliminate administrative efforts in determining who must receive the notice and will avoid a notification failure. Notices may be provided separately or with other materials (like employer open enrollment materials) as long as the information is “prominently and conspicuously displayed”. This means that the disclosure notice portion of the document must be referenced in at least 14 point font in a separate box, bolded, or offset on the first page of other information being provided.  Practically speaking, it is recommended to use a standalone notice based on the CMS Creditable Coverage Model Notice Letters. CMS confirmed that notices may be distributed electronically in accordance with Department of Labor electronic distribution guidelines. 

As a reminder, the Medicare Part D disclosure notice requirement to eligible individuals is not just limited to distribution prior to the Medicare open enrollment period.  The notice must also be given:

  • When a Medicare eligible individual enrolls in the plan prior to the effective date of coverage;
  • When there is a change in the creditable status of the prescription drug coverage under the plan; and
  • Upon an individual’s request. 

A copy of the notice should also be provided prior to an individual’s initial enrollment period for Medicare, however, CMS has stated this requirement is considered to be met if the notice is being distributed to all participants annually. 

Please contact your HORAN representative with any questions.

*The disclosure to CMS must be made within 60 days after the beginning of the plan year (March 1st for calendar-year plans).