Sep 29, 2023
Another Reminder! Medicare Part D Creditable Coverage Notice To Be Distributed by October 13, 2023
September 2023
Before October 15, 2023, plan sponsors that offer prescription drug coverage must provide notices of creditable or non-creditable coverage to Medicare-eligible individuals. Because October 14, 2023 falls on a Saturday this year, the notice must be provided by Friday, October 13, 2023.
More detail can be found in our article published earlier this year.
Required Disclosure of Creditable Coverage to Eligible Plan Participants
Detailed guidance from CMS on these disclosures can be found here.
Content of the Disclosure
Disclosures of creditable coverage must address the following:
- That the employer has determined that the prescription drug coverage is creditable;
- The meaning of creditable coverage, as defined by the guidance; and
- Why creditable coverage is important and that the individual could be subject to payment of higher Part D premiums if there is a break in creditable coverage of 63 days or longer before enrolling in a Part D plan.
Disclosures of non-creditable coverage must address the following:
- That the employer has determined that the prescription drug coverage is not creditable;
- The meaning of creditable coverage, as defined by the guidance;
- That an individual generally may only enroll in a Part D plan from October 15 through December 7 of each year; and
- An explanation of why creditable coverage is important and that the individual may be subject to payment of higher Part D premiums if he or she fails to enroll in a Part D plan when first eligible.
CMS makes model notices available in both English and Spanish, for purposes of the disclosure requirement. The model notices can be found on CMS’ page here.
Method of Delivery of the Disclosure
When providing the notices, CMS prefers using paper documents because Part D eligible individuals are more likely to receive and understand them, and because it is easier to ensure that paper documents have been received by both employees and eligible spouses and dependents. However, although paper notices sent by mail are preferred, the notices may be sent electronically in accordance with the Department of Labor’s (DOL’s) electronic delivery safe harbor for required ERISA disclosures. The safe harbor allows for electronic distribution to those who have access to the employer’s electronic system as an integral part of their daily duties at their regular workplace, and to those who provide consent.
In general, CMS has indicated that a plan sponsor providing a disclosure notice may generally provide a single notice to both the eligible individual and all of his or her eligible dependents. However, a separate disclosure notice must be provided if the plan sponsor knows that any eligible spouse or dependent resides at a different address from the participant.
While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.
