Each year, group health plan sponsors that provide prescription drug coverage to Medicare eligible individuals must disclose whether that coverage is “creditable,” meaning it is expected to pay on average as much as the standard Medicare prescription drug plan.
Creditable Coverage Reporting requirements apply to insured and self-funded plans, regardless of plan size, employer size or grandfathered status.
Written Disclosure to Individuals
Written notice of creditable or non-creditable coverage must be provided to Medicare eligible individuals annually, prior to October 15th, and at various times as stated in the regulations, including when a Medicare eligible individual first joins the plan.
Notices may be provided in annual enrollment materials, separate mailings or electronically. Model notices are available from the Centers for Medicare & Medicaid Services (CMS).
This disclosure must be provided to: Medicare-eligible active working individuals and their dependents; 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.
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 plans. This disclosure is also required annually, no later than 60 days from the beginning of a plan year, and at certain other times.
For more information, check out the Creditable Coverage Reporting Episode from our “Compliance Minute” video series.
Employee Health and Benefits
ACA Compliance
