Group health plan sponsors must disclose whether their health plan’s prescription drug coverage is creditable or non-creditable to individuals eligible for Medicare Part D and to the Centers for Medicare and Medicaid (CMS). The annual disclosure must be provided to Medicare-eligible individuals before October 15, 2023 (the start of Medicare’s annual enrollment period).
After employers determine whether their health plans’ prescription drug coverage is creditable or non-creditable, they are required to send the appropriate model disclosure notice provided by CMS. Spanish versions are available as well.
What is creditable coverage?
Coverage is considered creditable “if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage.” This measures whether, under the group’s prescription drug coverage, the expected amount of paid claims is at least as much as the expected amount of paid claims under the Part D benefit. The creditable coverage test must be applied separately for those with multiple benefits options, like a PPO, HMO, and HDHP.
Who receives the notice?
Notice must be given to all individuals eligible for Medicare Part D. Eligible individuals are those entitled to Part A or enrolled in Part B and those who live in the service area of a Part D plan. Furthermore, active and disabled employees, retirees, COBRA participants, and covered spouses and dependents who are eligible for Part D should also receive notices.
Disclosing to CMS
The creditable disclosure notice must be given by plan sponsors to CMS within 60 days following the effective date of the plan year, within 30 days following the termination of the prescription drug plan, and within 30 days following a change in the creditable coverage status of the drug plan. The disclosure form can be accessed and completed on the CMS Creditable Coverage Disclosure page.
If you have any questions regarding the Medicare Part D disclosure notices, please contact your dedicated Creative Benefits, Inc. team member.