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Employers who administer their own Medicare Part D notice compliance must update their notices as of May 15, 2006, in accordance with recent guidance from the Centers for Medicare and Medicaid Services (CMS).
CMS recently issued guidance on employer disclosure notices to participants who are eligible for Medicare Part D coverage. In addition, CMS changed its two standard model notices (Creditable Coverage and Non-Creditable Coverage) and added a third, personalized model notice.
You may review the revised guidance and all three model notices at:
www.cms.hhs.gov/CreditableCoverage/02_CCafterMay15.asp#TopOfPage
The model notices changed substantially. The major change is that references to the Initial Enrollment Period (ending on May 15, 2006) have been replaced with the Annual Enrollment Period (November 15 through December 31 of every year, starting in 2006).
Employers may use the personalized notice upon an individuals request and instead of the two other model notices. The concept is similar to that of a Certificate of Creditable Coverage under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Personal information, including an account number or Social Security Number, is included along with the dates of creditable coverage after May 15, 2006. Recall that employers are obligated to provide a Medicare Part D notice whenever an individual requests. A common occurrence after May 15, 2006, will be that a new Medicare Part D enrollee must show not only that he or she had creditable coverage but also the dates of that coverage.
The guidance provides several clarifications to the original guidance that was issued in May 2005. First, it is now clear that required Medicare Part D recipients include not only active employees, but also their covered spouse and dependents, COBRA Qualified Beneficiaries, retirees and disabled employees.
Second, CMS clarified how the late enrollment penalty will be imposed for those without creditable coverage for at least 63 days after May 15, 2006. The premium will be increased “by at least 1% of the national benchmark beneficiary premium (which is set by CMS and published each year) for each month without creditable coverage.”
Third, CMS defined what it means by the term “integrated plan” in determining creditable coverage status. An integrated plan is one where the prescription drug benefit is combined with other coverage offered under the plan in a single annual deductible, annual benefit maximum, and lifetime benefit maximum. Thus, a plan that offers a prescription drug co-payment before the annual deductible is satisfied is a non-integrated plan.
This new guidance should not surprise those who have attended any Webinars or Seminars conducted by Infinisource since last September. We had already advised attendee’s of the guidance described above, based on informal discussions with CMS.
Compliance with the revised guidance will take some effort and require notice content changes. In addition, an employer who has adopted a blanket mailing approach (i.e., sending a notice to all participants whether or not they are Medicare Part D eligible) will need to adapt its notices as well.
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