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Medicare Part D Creditable Coverage Disclosure Due to CMS by March 1st

Question:

I just heard that I need to report my health plan “credibility” with CMS and my employees.  What in the world is this and what is it I need to do?

Answer:

It’s time again for many employers to disclose Medicare Part D Creditable Coverage status to the Centers for Medicare & Medicaid Services (CMS). As a reminder, there are two disclosures required annually for certain employers related to Medicare Part D. Employers with plans providing prescription drug coverage to individuals that are eligible for Medicare Part D must disclose whether their drug benefit is equal to or better than (also known as “creditable”) the Part D program to (1) individuals eligible for Medicare Part D and (2) to CMS. The disclosure to CMS is due by March 1st for calendar-year plans.

At a minimum, disclosure to CMS must be made within:

  • 60 days after the beginning of the plan year;
  • 30 days after the termination of the prescription drug coverage; and
  • 30 days after any change in the creditable coverage status of the prescription drug plan

Employers must submit the disclosure online via form CMS-10198, providing the following information:

  • Name of Entity
  • Federal Tax Identification Number (EIN)
  • Entity geographical information
  • Phone number of entity
  • Type of coverage
  • Creditable coverage status
  • Identify “authorized individual” of the entity

As mentioned, any employer offering prescription drug plan is required to disclose creditable coverage status.  However, there are limited exceptions including (1) employers who contract directly with Medicare as a Part D plan (or contract with a Part D plan to provide qualified retiree prescription drug coverage) are exempt from the disclosure requirement for that plan year; (2) employers not offering prescription benefits to any Medicare D eligible individuals on the beginning date of the plan year are not required to complete a disclosure to CMS form for that plan year; (3) employers and unions that have applied and been approved for the Retiree Drug Subsidy (RDS) are exempt from filing the form. The exemption applies only to the covered members and plan options for which the employer is claiming the RDS. The plan sponsor’s RDS application will serve as disclosure to CMS.

For background, Medicare eligible individuals may pay higher premiums for Part D coverage if they fail to enroll in Medicare Part D during their initial enrollment period (beginning 3 months prior to 65th birthday and ending three months after 65th birthday) and have a lapse of creditable prescription drug coverage for more than 63 days.  This disclosure assists CMS with administering penalties as applicable to late enrollees. Further guidance and instructions for disclosure is found at CMS Creditable Coverage. Please contact your HORAN account representative with additional questions.

Thank you to HORAN for providing the content for our Question of the Week. HORAN serves as a trusted advisor on employee benefits, wealth management and life and disability insurance. To learn more about HORAN, please contact HORAN for additional information.

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