*If you provided participants and new hires with the annual notice packet provided by Bim Group or generated by HR Service in the last 12 months, the Medicare Part D notice is included in this packet so no additional action is required at this time. *
What you should know:
Medicare Part D is a federal program to subsidize the costs of prescription drugs for Medicare beneficiaries in the United States. The Medicare Modernization Act (MMA) mandates that employer health plan sponsors disclose to all Medicare eligible individuals with prescription drug coverage under the plan whether such coverage is “creditable.” This information is essential to an individual’s decision whether to enroll in a Medicare Part D prescription drug plan. Individuals who do not receive timely and accurate notification of the plan’s creditable coverage status may incur a late enrollment penalty when applying for Medicare Part D.
A Notice with information about your prescription drug coverage and Medicare Part D must be distributed by October 15th of each year.
- Plan Sponsors must provide noticeof this determination to Medicare eligible individuals:
- by October 15 of each year;
- when he/she joins the plan; and
- whenever the drug benefits offered under the plan change.
- Plan Sponsors must send a disclosure notice of this determination to the Centers for Medicare and Medicaid Services (CMS) within 60 days after the beginning date of the plan year, within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status, for which the disclosure is provided.
- This is not included in the annual notice packet and requires additional action. Visit the CMS website to complete the online disclosure to CMS.
The Medicare Part D notice must be distributed by October 15 to all Medicare Part D eligible participants (employees, spouses, dependents, COBRA, etc…). If you have provided this notice to new hires upon becoming eligible for the plan, and to current participants at annual enrollment during the last 12 months, no additional notice is required at this time.
Notice Distribution Requirements:
Plan Sponsors have flexibility in the form and manner of providing Disclosure Notices to beneficiaries. The notice need not be sent as a separate mailing.
- The Disclosure Notice may be provided with other plan participant information materials (including enrollment and/or renewal materials).
- If a plan sponsor chooses to incorporate disclosures with other plan participant information, the disclosure must be prominent and conspicuous. This means that the disclosure notice portion of the document (or a reference to the section in the document being provided to the individual that contains the required statement) must be prominently referenced in at least 14-point font in a separate box, bolded, or offset on the first page of the provided plan participant information.
- The plan may provide a single disclosure notice to the covered Medicare individual and all his/her Medicare eligible dependent(s) covered under the same plan.
- However, the plan is required to provide a separate disclosure notice if it is known that any spouse or dependent that is Medicare eligible resides at a different address than from where the participant/policyholder materials were provided.
- Plan Sponsors may use electronic disclosure requirements to meet the creditable coverage disclosure requirements provided the recipients have adequate access to electronic information.
Should you have any additional questions, please contact your account representative at Bim Group.
This information was adapted from Compliancedashboard and is intended for educational and informational purposes only. This information is not legal advice, and should not be construed as such.