Group health plans and individual health insurance policies that offer prescription drug coverage to Medicare-eligible individuals must comply with the following requirements:
Disclosure Notice to the Centers for Medicare and Medicaid Services (CMS)
The plan sponsor (typically the employer) must disclose to CMS whether the plan's prescription drug coverage is creditable or non-creditable compared with the prescription drug coverage provided under Medicare Part D.
Disclosure must be completed online within 60 days following the start of the plan year via the CMS website.
Disclosure Notice to Medicare Part D Eligible Individuals
The plan sponsor must notify individuals eligible to participate in the plan as to whether the plan's prescription coverage is creditable or non-creditable. The notice must be provided to Medicare Part D eligible individuals:
- On an annual basis prior to November 15th, which is the Medicare Enrollment Period
- When the individual originally becomes eligible under the group plan
- Upon a change in the plan's creditable status
- Upon termination of the prescription drug plan
- Upon an individual's request
Model notices are available from CMS
FAQs
Does an employer need to send the notice to all eligible employees or only those older than 65?
An individual can be eligible for Medicare due to age or disability. Additionally, an employee's spouse or dependent could be eligible for Medicare. Therefore, it might be difficult for an employer to identify individuals who are eligible for Medicare. It is recommended that the notice be distributed to all employees who are eligible to participate in the plan.
Can the notice be emailed to employees or posted on an employer's intranet?
An employer could provide the Notice of Creditable Coverage to plan participants via a work email address if the participant has email access at their regular place of work on a daily basis as part of their work duties. The email should include a statement indicating the significance of the document; that a paper version of the notice is available and how to obtain one; and a statement that the participant is responsible for providing a copy of the notice to their dependents who are covered under the group health plan and eligible for Medicare. Additionally, the employer should post the notice on the employer's website with a link to the notice on the website's main page.
If an employee does not have access to work email as a part of their regular work duties, the employer may still email the notice to them, but certain conditions must be met first:
- The individual must notify the employer that they have adequate electronic access, provide the employer with a valid email address, and send an email to the employer consenting to the electronic notification.
- The employer must notify the individual of their right to a paper version of the notice, how to cancel their consent, how to revise an address, and any hardware/software requirements.
A hand-delivered copy is not recommended as a primary method of distribution. For those individuals that do not receive the notice electronically, first class mail would be the next preferred method of delivery.
CMS has provided the following instructions and guidance:
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