Coverage Notices
Coverage notice obligations under the Medicare Part D law applies to virtually all prescription drug plan sponsors with any participants or beneficiaries who are age 65 or older (or under age 65 but eligible for Medicare coverage due to disability or end stage renal disease). This requirement applies to plans that do not provide coverage to retirees, so long as there is even a single covered individual who is also eligible for Medicare.
Notices to Individuals
Plan sponsors are required to perform for each prescription drug "benefit option" the following tasks:
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Using the methodology provided by the Centers for Medicare and Medicaid Services (CMS), determine whether the coverage provided under the benefit option is "creditable" or "noncreditable," i.e., whether the coverage is, on average, at least as good as coverage available under Medicare Part D.
- Among the participants and beneficiaries under that benefit option, identify each employee, retiree, or dependent who could qualify for Medicare (Part A or B) in 2007 ("Medicare-Eligible Individuals").
- Prepare and send to each Medicare-Eligible Individual a notice regarding the creditable (or noncreditable) status of the benefit option.
- Retain for at least 6 years documentation of the analysis and assumptions used in preparing the notices, as well as supporting workpapers, and keep it available for audit by CMS.
- Send updated notices upon any change in the drug coverage that results in it being less or more valuable.
- Do it all again next year!
Notice to CMS
Plan sponsors are also required to report to CMS whether prescription drug coverage they provide to Medicare-Eligible Individuals is "creditable" or "noncreditable". Some important aspects of this requirement include the following:
- Notice to CMS must be done electronically, using a CMS web-based form.
- Notice to CMS need not include information regarding prescription drug plan participants and beneficiaries for whom the Retiree Drug Subsidy application has been approved.
- Providing notice to CMS is not a one-time event. It is required at each of the following times:
- For plan years that end in 2007 and beyond, within 60 days after the first day of the plan year for which the entity is providing the report to CMS
- Within 30 days after the termination of the prescription drug plan
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Within 30 days after any change in the creditable coverage status of the prescription drug plan
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