Medicare Part D requires group health plan sponsors to disclose to the Centers for Medicare & Medicaid Services (CMS) whether their prescription drug coverage is creditable or non-creditable. This disclosure requirement applies when the group health plan provides prescription drug coverage to individuals who are eligible for coverage under Medicare Part D. The disclosure must be done annually within 60 days after the beginning of the plan year. Therefore, calendar year plans generally have until March 1 to fulfill this requirement.
A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit. For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.
If the plan experiences any change throughout the plan year that affects whether the drug coverage is creditable, an additional disclosure is required within 30 days of the change.
The disclosure to CMS must be made using the online disclosure form on the CMS creditable coverage website. This is the sole method for compliance unless the entity does not have internet access. CMS has also prepared guidance and instructions users may reference, also found on the CMS creditable coverage website.
Reach out to your Hylant representative for further information.
The above information does not constitute advice. Always contact your employee benefits broker or trusted adviser for insurance-related questions.