Medicare Part D Notices Due October 15, 2018

Plan sponsors offering prescription drug coverage must provide the annual notice of creditable or non-creditable coverage required under Medicare Part D to Medicare Part D-eligible individuals before October 15, 2018, the start date of the annual open-enrollment period for Medicare Part D.  Prescription drug coverage is considered creditable if it provides, on average, as much as Medicare’s standard part D plan.

The annual notice must be provided to all Medicare-eligible individuals who are covered under, or eligible for, the plan sponsor’s prescription drug plan, regardless of whether the plan pays primary or secondary to Medicare.  The notice obligation is not limited to retirees and their dependents but also includes Medicare-eligible active employees and their dependents and Medicare-eligible COBRA participants and their dependents.  However, ASR recommends plan sponsors provide the notice to all plan participants as a practical matter.

Part D-eligible individuals must also be given the notice before their initial enrollment period for Part D, before the effective date of plan coverage, whenever the creditable status of the plan changes, and upon request.  However, the requirement to provide the notice before an individual’s initial enrollment period will be satisfied if the notice is provided to all plan participants each year before the beginning of the Medicare Part D annual open-enrollment period.

Although there are no specific penalties for plan sponsors associated with this notice requirement, failure to provide the notice may be detrimental to employees.  Medicare beneficiaries who are not covered by creditable prescription drug coverage and do not enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date.

ASR provides these notices to our clients in their Compliance Documents posted on our Website.  We determine creditable status based on the Centers for Medicare and Medicaid Services’ safe-harbor method.  Clients who disagree with ASR’s determination may obtain an actuarial determination.

If you have questions about these notices, call ASR Health Benefits at (616) 957-1751 or (800) 968-2449.