Employers sponsoring group health plans that offer prescription drug coverage to individuals eligible for Medicare Part D (generally those age 65 and older, including active employees, retirees, COBRA participants, and dependents) must disclose to those individuals whether the group health plan coverage is creditable or non-creditable. Prescription drug coverage is considered creditable for Medicare Part D purposes if the employer's coverage is, on average, at least as good as standard Medicare prescription drug coverage. To make this determination, the employer must determine if the plan's actuarial value equals or exceeds the actuarial value of standard Part D coverage.
The Centers for Medicare and Medicaid Services (CMS) provides guidelines on the standard Medicare Part D benefit. CMS recently updated those parameters for 2013. Employers with prescription drug plans will have to review those plans to determine if their coverage remains creditable. Notice must be provided to Medicare Part D individuals by October 15, 2012.
For 2013 the following parameters will be used to determine actuarial value. Each value is increased from the 2012 values.
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Deductible: $325;
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Initial coverage limit: $2,970;
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Out-of-pocket threshold: $4,750;
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Total covered Part D spending at the out-of-pocket expense for beneficiaries not eligible for the coverage gap discount: $6,733.75;
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Estimated total covered Part D spending at the out-of-pocket expense for beneficiaries are eligible for the coverage gap discount: $6,954.52; and
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Minimum co-pays under the catastrophic coverage benefit: $2.65 for generic/preferred multi-source drugs, and $6.60 for all other drugs.
