Medicare Part D Notice Required By October 15 | Fisher phillips

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Employers who provide prescription drug coverage (Rx coverage) to their employees must notify all Medicare-eligible employees of the credible or non-credible status of Rx coverage under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. (MMA). Affected employers must provide the required notices by October 15 of each year to coordinate with the start of the annual Medicare open enrollment period. The Medicare Part D notification requirement is generally straightforward, but we still see a wave of questions every year regarding these notifications. We’ve created this guide to help answer some of the most common employer requests.

Background

Medicare Part D rules state that individuals must pay a higher cost for Medicare Part D coverage if they do not enroll before the end of their initial Medicare enrollment period, unless they delay. signing up because they have credible Rx coverage. The Centers for Medicare and Medicaid Services (CMS) considers Rx coverage to be credible if it is actuarially equivalent or superior to prescription drug coverage under Medicare Part D. Thus, MMA has included the Medicare Part D notification rule. to ensure that individuals receive the information they must make an informed choice about prescription drug options and avoid the higher Medicare Part D costs for late enrollment.

Target audience

All Medicare Part D eligible people who are covered (or request coverage under) the plan’s Rx coverage must receive a Medicare Part D notice. Medicare defines this group to include anyone who is entitled to Medicare Part A and / or enrolled in Part B on the effective date of Medicare Part D coverage, and who lives in the service area of ​​the Medicare Part D plan. Keep in mind that CMS interprets having Medicare Part A “entitlement” to require an individual to have applied for and obtained Part A coverage.

The tricky part is that people who are eligible for Medicare Part D can be active employees, employees with disabilities, qualified beneficiaries with COBRA coverage, and retirees. In addition, all of their covered spouses and dependents are also eligible for Medicare Part D. Employers generally do not have accurate information about the spouse and dependents, so it is best practice to issue notices to all. people eligible for Rx coverage.

Typically, one Medicare Part D notice will suffice for a Medicare-covered beneficiary and all of their dependents and spouse. But when an employer knows that a Medicare-eligible spouse or dependent resides at a different address, the employer must send a separate notice to that last known address.

Notification deadline

Medicare enrollment begins on October 15 each year. Since Medicare Part D notification rules require employers to issue notifications by this date, employers should make sure to provide notifications by October 14.

Employers tend to focus on Medicare Part D October notices because they relate to a firm and consistent deadline. However, Medicare rules also require employers who offer Rx coverage to issue Medicare Part D notices at other intervals. For example, Medicare Part D notices should be provided:

  • prior to an individual’s initial Medicare Part D enrollment period;
  • before the effective date of Rx coverage for anyone eligible for Medicare who enrolls in the plan during the year; and
  • at the request of a person eligible for Medicare Part D.

To avoid missing any of the above deadlines, many plan sponsors include a Medicare Part D notice in their new hire information materials and with other plan enrollment documents. This will help employers be more certain that all Medicare-eligible people receive timely notification of the credible or non-creditable status of their Rx coverage.

Finally, employers must provide Medicare Part D notice whenever they no longer offer Rx coverage or if coverage changes so that it is no longer credible or becomes so.

Delivery method

Employers can send Medicare Part D notices separately or include them with other plan documents. Employers can choose to send the notices with the registration documents open, but this will only work if the open registration period begins before October 15th. Additionally, if an employer chooses to send Medicare Part D notices along with other plan documents, CMS Part D notice is the first page of the documents. Alternatively, the employer can place a notice on the first page that indicates where in the documents individuals can find the required notice. Employers must highlight such a reference in a separate and prominent box in a bold font of at least 14 points.

CMS allows employers to send Medicare Part D notices electronically and has stated that employers who follow the general electronic disclosure rules set by the United States Department of Labor (DOL) for other information on health plans. group will be deemed to have fulfilled their Medicare Part D notification obligations. Essentially, this would require either that an intended recipient have access to the employer’s messaging system as part of their normal duties, or that the employer would have to overcome several other hurdles to be reasonably certain that Medicare Part D notices were received. received.

In addition, employers who choose electronic delivery must ensure to:

  • prepare and provide electronic documents in accordance with requirements otherwise applicable;
  • advise each recipient of the importance of the document; and
  • indicate that a paper version is available on request.

Additionally, if a plan sponsor chooses to issue Medicare Part D notices under the DOL’s electronic disclosure rules, the plan sponsor must notify plan members that they must deliver a copy of the disclosure to their dependents. Medicare eligible and covered by the group health plan providing Rx coverage.

If the intended recipients do not have access to an employer’s electronic information system as part of their normal duties, an employer can still send Medicare Part D notices electronically, but there are more onerous requirements. Thus, many employers choose to use regular mail to avoid the additional administrative burdens imposed by electronic disclosure rules.

Content of the notice

Keep in mind that the information in the Medicare Part D advisory relates to the upcoming calendar year of coverage, not the current year. For example, a Medicare Part D advisory issued in 2021 will describe the Rx coverage available for 2022. Medicare Part D advisories must:

  • indicate that the plan sponsor has determined that the relevant Rx coverage is or is not eligible;
  • explain what it means for a cover to be credible or non-credible;
  • describe the beneficiary’s right to notice;
  • list the coverage options available to beneficiaries, including the option to enroll in Medicare Part D during the regular annual Medicare enrollment period; and
  • provide details on why creditable coverage is important and how a person might still be subject to higher Medicare Part D premiums if they later have a break in creditable coverage of 63 consecutive days or more before they leave. enroll in a Medicare Part D plan.

CMS has published Medicare Part D notification templates on its website. Employers do not have to use the review templates to fulfill their notice obligations, but they must include the items listed above if they choose to create their own reviews. Be aware that employers cannot use the review templates as is; they will require employer-specific changes, including specifying whether Rx coverage is eligible or not. We see many Medicare Part D notices that have been published or included in open enrollment documents without being appropriately edited.

Conclusion

Employers who offer Rx coverage should be sure to follow CMS rules for properly informing people eligible for Medicare Part D of their prescription drug coverage options, including notifying all those eligible for coverage. Medicare Part D by October 15. Employers should not confuse this requirement for the additional requirement to notify CMS annually of the credible status of Rx coverage through the CMS online portal.


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