Valhalla Business Advisors brings tools and resources to clients to support their efforts to provide high impact, cost effective, and compliant employee benefit programs. Included in compliance considerations are steps required by the Centers for Medicare and Medicaid Services related to the creditable status of an employers prescription drug benefits.
As described on this CMS website:
Creditable Coverage The Medicare Modernization Act (MMA) requires entities (whose policies include prescription drug coverage) to notify Medicare eligible policyholders whether 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. For these entities, there are two disclosure requirements: 1. The first disclosure requirement is to provide a written disclosure notice to all Medicare eligible individuals annually who are covered under its prescription drug plan, prior to October 15th each year and at various times as stated in the regulations, including to a Medicare eligible individual when he/she joins the plan. This disclosure must be provided to Medicare eligible active working individuals and their dependents, Medicare eligible COBRA individuals and their dependents, Medicare eligible disabled individuals covered under your 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. 2. The second disclosure requirement is for entities to complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. The Disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status. -- This requirement does not pertain to the Medicare beneficiaries for whom entities are receiving the Retiree Drug Subsidy (RDS).
Employer Obligations
As described above, the obligation to provide the creditable coverage notice is limited to all Medicare eligible individuals who are covered under, or apply for, your prescription drug plan. At first blush, this may appear to be as simple as identifying those individuals who are of the appropriate age to be eligible for Medicare; However, there are non-age related eligibility conditions, such as patients with certain disabilities, ESRD, or ALS.
A best practice is to provide the required disclosures to all covered individuals annually (prior to October 15) as well as other appropriate times, such as upon request, at times of plan termination, or change in creditable status.
An online disclosure to CMS is also required for entities to report the creditable coverage status of their plans. This disclosure is to be completed no later than 60 days from the beginning of a plan year, or within 30 days after any change in creditable coverage status.
The Valhalla advantage
Valhalla Business Advisors is extremely proud to bring boutique services to clients; As a client, details around topics like these creditable coverage notices and disclosure processes can feel complicated; Our team can help you. Feel free to reach out to Stuart or Jens to discuss further!
Sample Scope of Work
