Medicare Part D: Creditable Coverage Disclosures
By Danielle Capilla, Chief Compliance Officer, United Benefit Advisors
Entities such as employers with group health plans that provide prescription drug coverage to individuals that are eligible for Medicare Part D have two major disclosure requirements that they must meet at least annually:
- Provide annual written notice to all Medicare eligible individuals (employees, spouses, dependents, retirees, COBRA participants, etc.) who are covered under the prescription drug plan.
- Disclose to the Centers for Medicare and Medicaid Services (CMS) whether the coverage is "creditable prescription drug coverage."
Because there is often ambiguity regarding who in a covered population is Medicare eligible, it is best practice for employers to provide the notice to all plan participants.
CMS provides guidance for disclosure of creditable coverage for both individuals and employers.
Who Must Disclose?
These disclosure requirements apply regardless of whether the plan is large or small, is self-funded or fully insured, or whether the group health plan pays primary or secondary to Medicare. Entities that provide prescription drug coverage through a group health plan must provide the disclosures. Group health plans include:
- Group health plans under ERISA, including health reimbursement arrangements (HRAs), dental and vision plans, certain cancer policies, and employee assistance plans (EAPs) if they provide medical care
- Group health plans sponsored for employees or retirees by a multiple employer welfare arrangement (MEWA)
- Qualified prescription drug plans
Health flexible spending accounts (FSAs), Archer medical savings accounts, and health savings accounts (HSAs) do not have disclosure requirements. In contrast, the high deductible health plan (HDHP) offered in conjunction with the HSA would have disclosure requirements.
There are no exceptions for church plans or government plans.
For more information on determining if coverage is creditable, the required disclosures to plan participants about whether coverage is creditable, and how notices must be delivered, view UBA’s Compliance Advisor, “Medicare Part D: Creditable Coverage Disclosures”.