Who does this apply to? This requirement applies to all employers with prescription drug benefits within their group health plans.
What action must I take? Must be provided to participants prior to October 15, 2016.
Overview U.S. Department of Health and Human Services regulations require annual notice to all plan participants regarding the Medicare Part D Prescription benefit “creditability” of your group health plan. This notice must be provided prior to October 15 to coincide with the annual Medicare open enrollment period which runs from October 15 to December 7. This notification provides Medicare-eligible employees with important information to help determine whether they need to enroll in Medicare Part D. In 2011, the Medicare open enrollment period was altered by an amendment to the Social Security Act that was part of the Patient Protection and Affordable Care Act (PPACA). Prior to that amendment, the disclosure deadline and open enrollment period was November 15.
Again? Didn’t I just do this in January/February? Not quite. Same law, different requirement. In addition to this annual employee disclosure requirement each fall, plan sponsors must report creditability information directly to the Centers for Medicare and Medicaid Services (CMS) within 60 days of the first day of the ERISA plan year. Many Vita benefits clients have a January 1 ERISA plan year (which may – or may not – coincide with your renewal or policy year); so for many employers, the deadline is the end of February.
How Do We Know If Our Prescription Benefit Is “Creditable”? A prescription drug plan is considered "creditable" if the prescription drug benefits are expected to pay as much as or more than standard Medicare Part D prescription drug coverage. If a plan will not pay out as much as Medicare prescription drug plans pay, it is considered "non-creditable".
If you are a Vita Benefits Group client, you can confirm the creditability of your own plan by referring to your ERISA Welfare Plan Summary Plan Description (SPD).
Employer Action Item The ERISA SPD that Vita provides for your welfare plans has been designed to incorporate all of the necessary disclosure language for the Medicare Part D Creditability requirement. If you have distributed this SPD to your employees in 2016 (or since October 15 of last year), you are already in compliance with the annual disclosure requirement. If you have not already distributed the latest SPD, now would be a good time to do so!
If you prefer to send a separate Medicare Part D creditability notice, you may use the sample documents (model notices) available through the Center for Medicare & Medicaid Services website. There you can find sample documents for plans that are creditable or non-creditable for Medicare Part D purposes. Please note that the vast majority of group health plans include prescription benefits that are creditable.
Questions about the Medicare Part D annual disclosure? Email us at firstname.lastname@example.org.
Securities, when offered, are offered through Liberty Group, LLC, Member FINRA, SIPC. Insurance offered through Vita Insurance Associates, Inc. (CA License #0581175), LG Financial and Insurance Services, and Lifetime Insurance Marketing, Inc. (CA License #0D10261). Investment advisory services offered through Liberty Wealth Management (LWM), a registered investment adviser with the SEC. For additional information on LWM or your investment adviser representative, please visit the following website: www.adviserinfo.sec.gov.