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Question:

Are employers required to provide Medicare Part D notices to Medicare-eligible employees and dependents who are NOT enrolled in the employer health plan and already enrolled in Medicare?

Answer:

No.  The notification requirement applies only to Medicare-eligible individuals currently enrolled in a company group health plan. While probably not feasible for certain employer groups, some plan sponsors provide the notices to all employees as an extra precaution to ensure that every employee with a need to know is covered.

To provide more background on this notification requirement, the Medicare Modernization Act (MMA) requires employers with policies including prescription drug coverage to notify Medicare-eligible policyholders whether (or not) their prescription drug coverage is creditable coverage, which means that the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage. Sample notices to satisfy this requirement and additional information are provided in the link below.

The written disclosure notice should be provided to all Medicare-eligible individuals annually who are covered under the company prescription drug plan prior to October 15th each year and at various times as stated in the regulations, including notification to a Medicare-eligible individual when he/she joins the plan, Medicare-eligible active working individuals and their dependents, Medicare-eligible COBRA individuals and their dependents, Medicare-eligible disabled individuals covered under the prescription drug plan and any retirees and their dependents.

The MMA imposes a late enrollment penalty on individuals who do not maintain creditable coverage for a period of 63 days or longer following their initial enrollment period for the Medicare prescription drug benefit. Accordingly, this information is essential to an individual’s decision whether to enroll in a Medicare Part D prescription drug plan.

Reference resources for more information:

Creditable Coverage User Manual

Disclosure to CMS Guidance and Instructions

Creditable Coverage Model Notice Letters

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