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Tuesday, 06 September 2016 20:08

Important Medicare Part D Deadline October 15th

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The Medicare Modernization Act (MMA) requires Employers with prescription drug coverage to complete two items each year regarding Medicare Part D.  The first deadline is October 15th annually, and the other is 60 days from the beginning of each new plan year.  
The only employers exempt from this requirement are those that are small enough to be certain that their plan does not cover anyone eligible for Medicare such as employees or spouses over 65, anyone in end stage renal failure, or any disabled individuals. If you’re not positive – we recommend you comply to be safe.  

These tasks are required regardless of whether your plan’s prescription drug coverage is considered to be creditable coverage, which means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage. 
These steps are important because the MMA imposes a late enrollment penalty on individuals who meet two criteria:

  • NOT electing Medicare Part D during their initial enrollment period for the Medicare prescription drug benefit AND
  • NOT maintaining creditable prescription coverage from the time of the initial eligibility and when the individual ultimately elects Medicare Part D

To avoid this penalty, the creditability information you provide is critical to a Medicare eligible individual’s decision on whether to enroll in a Medicare Part D prescription drug plan. Your job as an employer is simply to communicate the creditable status of your plan, both to participants and to the Centers for Medicare and Medicaid Services (CMS).
Here’s what you need to do:

  1. Send your plan’s creditability information to all Medicare-eligible individuals that are on the employer-sponsored health insurance plan. There are model notices that you can use to notify employees, one stating that a plan is creditable, and one stating that a plan is not creditable.  Although you do not have to send the notice to employees that are not on the employer health plan, we recommend that you send it to all employees who are on the healthcare plan, even if they are not Medicare-eligible.  Many employers have grown to the point where they don’t personally know all their plan participants, so it’s safest to send to all enrolled. This notice is due each year by October 15th.
  2. Certify on the CMS website whether your plan is considered creditable or not, within 60 days) from the beginning of each plan year. Employers can usually find out if their plan is creditable from their broker or prescription drug carrier (or medical plan, if bundled).  Completion of this requirement involves filling out the disclosure form on the CMS website to certify the plan’s creditability.

Please note that although the notice is an annual requirement in the fall, the employer also has an obligation to provide notification to a Medicare-eligible individual when they join the health plan, as well as when a Medicare-eligible individual goes onto COBRA coverage, and to any retirees from the plan.  Again, many employers simply choose to provide this to all new hires to avoid missing anyone.
Click here for the CMS website Model Notice Letters and instructions that you can use for your employees. 
This email address is being protected from spambots. You need JavaScript enabled to view it. if you have any questions!

Read 2059 times Last modified on Monday, 14 September 2020 19:44
Juliet Fitzgibbons

Juliet joins Fall River as an Account Executive and brings over 15 years of prior broker and account management experience. Her experience brings extensive knowledge on employee benefit programs, account management and creative cost-saving strategies and compliance solutions for employers of various sizes.

She is responsible for new business proposals, client renewals including plan benchmarking, rate analysis and mid-year reviews. She helps clients navigate healthcare systems and educates employers and employees through open enrollment meetings and day-to-day service requests. Juliet joined Fall River in 2015.