Medicare Part D Creditable Coverage
Plans that provide prescription drug coverage
must give all employees, retirees, and dependents who are or who may become
eligible for Medicare Part D during next 12 months a notice explaining whether
the prescription drug coverage provided by the group health plan is
"creditable" or "non-creditable" coverage for purposes of
Medicare. The notice must be given each year before the start of open
enrollment for Medicare Part D prescription drug coverage -- the notice is due
each year by October 14. Due to difficulty identifying dependents who may be
Medicare-eligible, many employers provide the notice to all employees.
The Centers for Medicare & Medicaid
Services (CMS) also requires plan sponsors to provide notice of their
creditable-coverage status to Part D-eligible members before an individual's
initial opportunity to enroll in Part D (this is generally satisfied by the
annual notice), before the effective date of coverage for any Medicare-eligible
individual who joins the employer's plan, if the plan's prescription drug
coverage ends or its creditable coverage status changes, and upon an
individual's request.
Whether coverage is creditable matters
because a penalty in the form of a higher premium will apply to individuals who
do not elect Medicare Part D or other creditable prescription drug coverage
when first eligible if they later elect drug coverage. Coverage is considered
creditable if it is expected to cover, on average, as much as the standard
Medicare Part D prescription drug plan.
The CIOMA Employee Benefits Program includes
solutions for maintaining benefits-related compliance. Contact the team at
Maniaci Insurance Services at 866-541-4824 or mail@maniaciinsurance.com for more
information.