Group health plan sponsors that offer prescription drug coverage must, at least annually, notify Medicare Part D eligible individuals and the Centers for Medicare & Medicaid Services (CMS) of their plan’s creditable coverage status. Both disclosures (to Medicare Part D eligible individuals and to CMS) must meet specific form, content and timing requirements as prescribed by CMS. This update addresses the required disclosure to CMS and reminds plan sponsors that online disclosure should be completed annually no later than 60 days from the beginning of the plan year. This means that employers with calendar year plans that begin on January 1, 2020 must complete reporting no later than March 1, 2020. (For more information on Medicare Part D disclosures to individuals, please see our update, Medicare Part D Notices Due Before October 15th).
General Background Rules under Medicare Part D generally require group health plans with a prescription drug benefit to disclose whether the prescription drug coverage offered is “creditable” or “non-creditable”. “Creditable” prescription drug coverage generally means the actuarial value of prescription drug coverage under the group health plan is equal to (pays out as much) or better than the prescription drug benefits offered under Medicare Part D. Conversely, “non-creditable” prescription drug coverage is coverage that is actuarially less in value (expected to pay out less) than the coverage offered under Medicare Part D. This disclosure is required whether the entity’s coverage is primary or secondary to Medicare. This creditable coverage reporting is in addition to the mandatory CMS Medicare Secondary Payer reporting typically handled by an insurer or third-party administrator for a group health plan (see the CMS site on Mandatory MSP Reporting for more information).
Notification to CMS of Creditable Coverage Status CMS should receive a prescription drug plan’s creditable coverage disclosure:
Annually; disclosure must be received by CMS within 60 days of the beginning of the plan year for which the disclosure is being reported.
Within 30 days of a change in creditable coverage status.
Within 30 days of the prescription drug plan’s termination.
A prescription drug plan must use the online CMS Disclosure Form to report its “creditable” or “non-creditable” prescription drug status at the times noted above. Guidance and instructions are provided to assist prescription drug plan sponsors with completing the form.
Should you have questions about this or any aspect of group health plan requirements, contact your Conner Strong & Buckelew account representative toll-free at 1-877-861-3220. For a complete list of Legislative Updates issued by Conner Strong & Buckelew, visit our online Resource Center.
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