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Employers that provide prescription drug coverage must disclose to plan participants (including COBRA participants) who are eligible for Medicare Part D whether the prescription drug coverage provided under the group health plan is creditable or non-creditable. Employers should send the notices by October 15.
Since it is often difficult for employers to identify all individuals (including dependents) who may be eligible for Medicare, many employers satisfy this requirement by including the notice in enrollment materials or in separate mailings provided to all employees who participate in the plan.
In addition to the annual notification, there are also other times that employers are required to provide this notice. Below is a list of times at which notice of creditable or non-creditable coverage is required:
- Prior to an individual’s initial enrollment period for Part D,
- Prior to the effective date of coverage for any Medicare-eligible individual that joins the plan,
- Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable, or
- Upon the request of the individual.
Some insurance carriers already send the notice annually to all participants, so employers should first check with their carrier to determine if a notice is already being provided to employees. For your convenience, we have attached model creditable and non-creditable coverage notices.
In addition, employers must certify their plan’s creditable or non-creditable status to CMS. CMS requires the disclosure to be made:
- Within 60 days after the start of the plan year; and
- 30 days after plan termination or change in creditable coverage status.
The certification to CMS may be completed online HERE.
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About the Author. This alert was prepared for Marsh & McLennan Agency by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act. Contact Peter Marathas or Stacy Barrow at email@example.com or firstname.lastname@example.org.
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