Dear Valued Clients and Colleagues,
Each year, the Centers for Medicare and Medicaid Services (CMS) requires Employers to notify their Medicare Part D-eligible individuals as to whether the group prescription drug coverage offered qualifies as “creditable prescription drug coverage” to the Medicare Part D coverage. This year CMS is requiring that this notification be provided to your affected employees by October 15, 2011, which coincides with the annual election period for Medicare (October 15 – December 7). During the last few weeks you should have received a notice from your Medical Plan provider as to whether your coverage is creditable or non-creditable. If you are unsure, please let us know and we will find out for you.
In order to assist employers with this process, CMS provides the model notices. Following is a link to the CMS website’s notices in English and Spanish. You can cut and paste the letters, and modify with your contact information. http://www.cms.gov/CreditableCoverage/Model%20Notice%20Letters.asp
Why is this Notification Important?
If the prescription drug coverage you offer is creditable, then your Medicare-eligible beneficiaries will not be penalized later by Medicare if they continue to stay enrolled on your employee group prescription drug coverage.
If the prescription drug coverage you offer is non-creditable, then it is in the Medicare-eligible’s best interest to enroll in Medicare medical and Part D prescription coverage and disenroll from your employer group plan. If they stay on a non-creditable prescription drug plan and do not enroll in Medicare Part D coverage, they will be required to pay a higher premium for the Medicare Part D coverage whenever they decide to enroll for it. The penalty is substantial: one percent over the base premium for each month of delay in enrolling for Medicare D coverage.
Additional information is provided at the CMS website at www.cms.hhs.gov/creditablecoverage including the second step of the disclosure process. (The second disclosure requirement is for entities to complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. The Disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. For more information go to the “Disclosure to CMS Form” Section on the website.)
It is recommended that the notices be mailed to ALL employees since you may not be aware of all your Medicare-eligible employees and their dependents. Electronic delivery may be an option in lieu of mailing. If you have questions or need assistance with these notices please feel free to contact us. We are happy to assist you.
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