In preparation for the Medicare fall open enrollment period, employers sponsoring group health plans that include prescription drug coverage are required to notify all Medicare-eligible individuals whether such coverage is “creditable” under the law. Creditable coverage means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage.
Written Disclosure to Individuals
Employers can satisfy this notice requirement by providing a written disclosure notice annually by October 14, and at various other times as required under the law, to the following individuals:
- Medicare-eligible active working individuals and their dependents (including a Medicare-eligible individual when he or she joins the group health plan);
- Medicare-eligible COBRA individuals and their dependents;
- Medicare-eligible disabled individuals covered under an employer’s prescription drug plan; and
- Any retirees and their dependents.
Model notices are available from the Centers for Medicare & Medicaid Services (CMS).
Online Disclosure to CMS Also Required
Additionally, employers are required to complete an online disclosure to CMS to report the creditable coverage status of their prescription drug coverage. This disclosure must be completed annually no later than 60 days from the beginning of a plan year, and at certain other times.
Our section on Medicare further details how the program impacts group health plans.