The Medicare Prescription Drug Improvement and Modernization Act of 2003 implemented prescription drug coverage under Medicare (Medicare D), requiring all employers that offer prescription drug benefits to provide an annual notice of Medicare open enrollment. The notice must go to all Medicare eligible plan participants and qualified beneficiaries before October 15th each year. The notice requirement applies to all employers offering prescription drug benefits regardless of size, whether fully-insured or self-funded, or regardless of ACA grandfathered status. Notification must go to all Medicare eligible plan participants, including active employees and their dependents, retirees and COBRA participants. For most employers, it is easier to issue the notice to all participants as a blanket notice than to identify Medicare eligible employees.
The notice requires that the plan sponsor first determine if their plan offers creditable coverage (meaning it is on average at least as comprehensive as Medicare D coverage), or non-creditable. The Centers for Medicare and Medicaid Services (CMS) provides a simple process to determine whether prescription drug coverage is creditable or not. Once that determination is made, CMS provides model notices to send to participants in both English and Spanish. Notices may be sent separately, included as part of open enrollment or other benefit related materials, or electronically as long as the DOL’s rules on electronic delivery are followed.
Additionally, all plan sponsors are required to notify CMS within 60 days of the start of each plan year as to whether or not their prescription drug plan is creditable or not creditable. This notification is done online at CMS here.
For Diversified Group clients who have elected to have Diversified Group handle your Medicare D notices, DG will determine if the plan is considered creditable or not and will then send the notice either to the client or directly to the plan participant depending upon which service was elected.