Download Medicare Part D Creditable Coverage Notice

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Medicare Part D: Creditable Coverage Disclosure Notices Due by Oct. 14
September 10, 2014
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The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) created a voluntary prescription
drug program for Medicare Part D eligible individuals. Under the MMA, group health plans — or entities that offer
prescription drug coverage on a group basis to active and retired employees and to Medicare Part D eligible individuals
— must provide, or arrange to provide, a notice of creditable or non-creditable coverage.
The creditable or non-creditable coverage notice must be provided to Medicare Part D eligible individuals who are
covered by, or who apply for, the plan’s prescription drug coverage. This includes active, retired, disabled, and
COBRA beneficiaries. The creditable or non-creditable coverage notice alerts the individuals as to whether or not their
plan’s prescription drug coverage is at least as good as the Medicare Part D coverage. Medicare beneficiaries who are
not covered by creditable prescription drug coverage and who choose not to enroll in Medicare Part D before the end
of their initial enrollment period will likely pay higher premiums if they enroll in Medicare Part D at a later date.
At a minimum, creditable or non-creditable coverage notices must be provided at the following times:
1. Prior to the Medicare Part D Annual Coordinated Election Period which runs from October 15th through
December 7th of each year (i.e. by October 14th);
2. Prior to an individual’s Initial Enrollment Period for Part D;
3. Prior to the effective date of coverage for any Medicare eligible individual that joins the plan;
4. Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable;
and
5. Upon a beneficiary’s request.
If the creditable or non-creditable coverage notice is provided to all plan participants annually, before Oct. 15 of each
year, items (1) and (2) above will be satisfied. The notice can be provided to the covered employee on behalf of its
Medicare eligible dependents unless it is known that any spouse or dependent resides at a different address.
Because it may be difficult to identify all Medicare Part D participants in the group health plan, it may be prudent to
provide the disclosure to all plan participants annually, prior to October 15th as well as to all new hires prior to initial
enrollment in the group health plan.
The Centers for Medicare & Medicaid Services (CMS) has provided model creditable coverage notices for use on or
after April 1, 2011. Through these model notices, CMS has provided sample language for plan sponsors to use when
disclosing their creditable coverage status to Medicare beneficiaries. However, plan sponsors are not required to
use the model notices; they can choose to draft their own notices. If the entity chooses not to use the model
disclosure notice, it can provide a personalized statement of creditable coverage that contains all of the legally
required elements.
The CMS model Individual Creditable Coverage Disclosure Notice should be used when prescription drug coverage is
creditable. When prescription drug coverage is not creditable, the model Individual Non-Creditable Coverage
Disclosure Notice should be used. Coverage is considered creditable if its actuarial value equals or exceeds the
actuarial value of standard prescription drug coverage under the Medicare prescription drug benefit.
This Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal
counsel for legal advice.