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February 22, 2022Do you offer health coverage to your employees? And does your group health plan cover outpatient prescription drugs?
If you answered yes to both of those questions, you’ll need to complete an online disclosure form within 60 days from the start of your health plan year, or if your health plan runs by calendar year, by March 1, 2022.
Why Do I Need To Do This?
Employers need to provide their eligible employees with information about Medicare Part D prescription drug coverage. Individuals who fail to enroll in Medicare Part D prescription drug coverage when they’re first eligible may be subject to penalties if they go without “creditable” prescription drug coverage for 63 consecutive days or longer. As a result, both the Centers for Medicare and Medicaid Services (CMS) and individuals who are eligible for Medicare Part D coverage need information about whether an employer’s group health plan prescription coverage is creditable or noncreditable. Group health plans report this information to CMS via an online form.
Creditable coverage means the group health plan’s prescription drug coverage is actuarially equivalent to Medicare’s Part D drug plans. In other words, the group plan is considered creditable if its drug benefits are as good as or better than Medicare’s benefits.
To confirm whether your plan provides creditable or noncreditable coverage, check with the plan’s carrier or HMO (if insured) or the plan’s actuary (if self-funded). CMS provides guidance to help plan sponsors, carriers, and actuaries determine the plan’s status.
Disclosure Deadline
For a calendar year health plan, the deadline to submit the disclosure is March 1, 2022. For non-calendar year plans, you’ll need to count 60 days from the start of your plan year to determine the due date.
The reporting requirement applies to all employers, regardless of size, and applies equally to plans that are insured, self-funded, grandfathered, or nongrandfathered.
If your plan terminates or changes its status between creditable and noncreditable coverage, disclose the updated information to CMS within 30 days.
Completing the Disclosure Form
All employers must use the Disclosure to CMS Form to provide the the required information; the same link is used regardless of whether the plan provides creditable or noncreditable coverage. You will be asked to respond to a series of questions about the plan, and the process shouldn’t take more than a few minutes. Save time by having the following information handy before you begin:
- Information about the plan sponsor (employer): Name, address, phone number, and federal Employer Identification Number (EIN).
- Number of prescription drug options offered (e.g., if you offer two plan options with different benefit levels, the number is “2”).
- Creditable/Noncreditable Offer: Indicate whether all options are creditable or noncreditable, or whether some are creditable and others are noncreditable.
- Plan year start and end dates.
- Estimated number of plan participants eligible for Medicare (and how many are participants in the employer’s retiree health plan, if any).
- Date that the plan’s Notice of Creditable (or Noncreditable) Coverage was provided to participants.
- Name, title, and email address of the authorized individual completing the disclosure.
Once finished, print a copy of the completed disclosure to keep for your records.
Note that if you receive the Retiree Drug Subsidy (RDS) or sponsor health plans that contract directly with one or more Medicare Part D plans, you should seek the advice of legal counsel regarding the applicable disclosure requirements.
Additional Disclosure Requirement
Separate from the CMS disclosure requirement, you’ll need to also distribute a disclosure notice to Medicare-eligible group health plan participants. This participant notice is due by October 14 of the preceding year. To simplify, most employers distribute the notice to all participants regardless of age or status. You can read more in our previous post.
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