As part of the compliance requirements under Medicare Part D, employers who offer prescription drug coverage to employees or retirees must submit an annual disclosure to the Centers for Medicare & Medicaid Services (CMS). This disclosure ensures that the government is informed about whether your plan provides “creditable” or “non-creditable” prescription drug coverage. The online disclosure is required to be made 60 days after the start of the plan year (March 1, 2025 for calendar year plans).
What is the Medicare Part D Disclosure?
The Medicare Part D disclosure informs CMS whether the prescription drug coverage offered under your group health plan is creditable or non-creditable.
- Creditable coverage: The coverage is expected to pay, on average, as much as the standard Medicare Part D prescription drug plan.
- Non-creditable coverage: The coverage does not meet the standard set by Medicare Part D.
This information is important for Medicare-eligible individuals because it impacts whether they could face a late enrollment penalty for joining a Part D plan after their initial enrollment period.
Who Must File the Disclosure?
All employers offering prescription drug coverage to employees, retirees, or their dependents—whether the plan is self-funded or fully insured—must file the disclosure annually, regardless of the number of Medicare-eligible individuals covered.
How to Comply with the Requirement
1. Log onto the CMS Medicare Disclosure Website
To submit the disclosure, employers must complete the process through the CMS online portal, which can be accessed by clicking here.
2. Complete the Disclosure Form
The form will ask for the following information:
- Employer and Contact Information
- Legal name of the organization.
- Employer Tax ID Number
- Address, phone number, and contact person responsible for the disclosure.
- Coverage Details
- Whether your prescription drug plan is creditable or non-creditable.
- The type of plan (e.g., employer group health plan).
- Whether the plan is offered to active employees, retirees, or both.
- Plan Year and Coverage Period
- Start and end dates for the group health plan year.
- Number of Medicare-eligible individuals covered under the plan.
- Plan Funding
- Indicate whether the plan is self-funded or fully insured.
Key Due Date
The disclosure must be submitted annually within 60 days of the start of the plan year. Additionally, an updated disclosure is required if:
- The plan is terminated.
- Prescription drug coverage is added or dropped.
Best Practices for Compliance
- Document Your Coverage Status: Ensure your determination of whether the coverage is creditable or non-creditable is documented, often provided by your insurance carrier if your plan is fully insured.
- Notify Medicare-Eligible Individuals: Remember, you must also provide written notification to all Medicare-eligible individuals about whether your prescription drug coverage is creditable or non-creditable. This notice is due by October 15th each year. The online disclosure is in addition to providing the written notice to Medicare-eligible individuals.
- Keep Records: Retain copies of your CMS disclosure and creditable coverage notices for at least three years for audit purposes.
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