The Medicare Modernization Act of 2003 requires employers who offer prescription drug coverage to Medicare-eligible employees to notify their policyholders if the prescription drug coverage provided is considered creditable coverage. A written notice must be sent to all Medicare-eligible employees prior to October 15^th each year. These employees include:

1. Active working and COBRA individuals and their dependents
2. Medicare-eligible disabled individuals covered under an employer’s prescription drug plan
3. Any retirees and their dependents

Because it is often difficult to know who is “entitled” to Medicare, we recommend that you provide the notice to all eligible members of your health plan, including retirees and those on COBRA. The Centers for Medicare & Medicaid Services (CMS) has provided example notices on its website – https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/Model-Notice-Letters.html.

Under the Act, employers are also required to complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. Please note that this form does not have to be completed by October 15^th, but should be completed annually no later than 60 days from the beginning of a plan year.  For detailed guidance and instructions complete the form https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/CCDisclosureForm.html

For more information regarding the Act, the disclosure requirements, or how to determine if your plan is a creditable or non-creditable plan, please visit the CMS website – http://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/index.html.

Please contact us if you have any questions regarding these requirements.