If you offer prescription drug coverage, you are required to disclose to Medicare-eligible individuals whether the health plan’s prescription drug coverage is creditable before Oct. 15, 2023 – the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices.
This notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and do not enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date. Although there are no specific penalties associated with this notice requirement, failing to provide the notice may be detrimental to employees.
Action Steps
You should confirm whether your health plans’ prescription drug coverage is creditable or non-creditable. In general, to be creditable, the prescription drug coverage must be expected to pay, on average, as much as the standard Medicare prescription drug coverage. If you’re not sure of your prescription drug plan status, request a determination letter from your carrier or reach out to E2E Benefits Services.
You must provide the disclosure notice to Medicare Part D-eligible individuals who are covered by, or who apply for, the health plan’s prescription drug coverage, including active employees, disabled employees, retirees, COBRA qualified beneficiaries, covered spouses, and dependents. Because you may not know who is eligible for Medicare, the best practice is to provide the disclosure notice to everyone who is enrolled or seeking to enroll in the plan.
If your open enrollment period begins before Oct. 15, you may include this notice with your plan’s open enrollment materials.
