IMPORTANT FEDERAL MANDATE REGARDING MEDICARE DISCLOSURE

In our October 2005 Benefits Update, we notified you that the Medicare Prescription Drug, Improvement and Modernization Act of 2003 required disclosure from all employer groups that provide prescription drug benefits to any Medicare-eligible individual (whether employee, dependent or retiree) confirming whether your plan was considered "creditable" (equal to or better than the Medicare RX benefit).  At that time, the actual notification requirements were pending.  CMS recently issued final guidance for completing this disclosure.  Information concerning the timing, manner and form for this important disclosure notice may be found at the CMS website: http://cms.hhs.gov/creditablecoverage

In general, if an entity provides prescription drug coverage to Medicare Part D eligible individuals, they are required to electronically complete and submit the disclosure form which may be found at the CMS website:  http://www.cms.hhs.gov/apps/ccdisclosure/default.asp

Disclosure notices must be made to CMS annually and upon any change that affects whether the prescription drug coverage is creditable.  At a minimum, disclosure to CMS must be made at the following times:

1.      For plan years ending in 2006, disclosure of creditable coverage status must be provided no later than March 31, 2006.

2.      For plan years ending in 2007 and later, disclosure of creditable coverage status must be provided within 60 days after the beginning of the plan year.

Example:  Plan year begins January 1, 2007 and ends December 31, 2007.  Disclosure is required no later than March 1, 2007.

3.      Within 30 days after the termination of the prescription drug plan.

4.      Within 30 days after any change in the creditable coverage status of the prescription drug plan.

This disclosure is required whether the entity’s coverage is primary or secondary to Medicare, regardless of whether the Medicare-eligible individual(s) actually participates in Medicare.   

This also confirms that all of the fully insured plans with Personal Choice, Keystone and Aetna are "creditable." 

As always, please contact us if you have any questions.

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MANDATED DISCLOSURE REQUIREMENTS REGARDING MEDICARE PART "D"

All plan sponsors/employer groups that provide prescription drug coverage to Medicare-eligible active employees and/or dependents, as well as Medicare-eligible retirees and/or dependents, must disclose to their members whether the drug coverage they offer is "creditable" or "non-creditable".  This must be provided by November 14, 2005.  The purpose is to assist those who are Medicare-eligible in making a determination of whether to enroll for Medicare Part "D" prescription drug coverage.  Those who are eligible and who do not enroll during the initial enrollment period (beginning November 15th) will likely pay a higher premium on a permanent basis if they subsequently enroll.  The major insurance companies are highly recommending that you notify all employees and/or retirees participating in your plan as many employers are not aware of the Medicare-eligible status of employees and their dependents. 

All of the fully insured plans that our clients have with Keystone, Personal Choice and/or Aetna have been determined by the insurance companies to pass the "creditable" coverage test. 

A model "Creditable" letter is available here.

There is also a requirement that you, as an employer group, notify The Centers for Medicare and Medicaid Services (CMS) on an annual basis whether your prescription drug benefit qualifies as creditable, however, CMS has not yet finalized the guidelines on how and when to satisfy this requirement.  On the CMS website, they stated that "Rules for making disclosures to CMS will be provided in future guidance."  We'll keep you advised as we learn more.

As always, please contact us if you have any questions.

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