Medicare Part D provides prescription drug coverage to millions of Americans. Employers offering health benefits that include prescription drug coverage provided to Medicare-eligible individuals are required to make an annual disclosure to the Centers for Medicare & Medicaid Services (CMS) regarding the creditable or non-creditable status of their prescription drug plan.
This annual disclosure is required by the Medicare Modernization Act (MMA) and helps CMS ensure that Medicare beneficiaries have access to accurate information about their prescription drug coverage options. The disclosure must be submitted to CMS no later than 60 days after the start of the plan year, or within 30 days of any changes to the prescription drug coverage. For calendar year plans, the CMS disclosure is due today.
Employers can determine whether their prescription drug coverage is creditable or non-creditable by comparing it to Medicare's standard prescription drug coverage. If the employer's coverage is expected to pay, on average, at least as much as Medicare's standard prescription drug coverage, it is considered creditable. Conversely, if the coverage is expected to pay less than Medicare's standard prescription drug coverage, it is considered non-creditable.
The annual disclosure to CMS typically includes information such as the plan sponsor's name, the plan year, the number of Medicare-eligible individuals covered under the plan, and whether the prescription drug coverage is creditable or non-creditable. Employers submit the disclosure electronically through CMS's online tool which is available here.
Failure to comply with the annual disclosure requirement can result in penalties imposed by CMS. Employers should ensure timely and accurate submission of the disclosure to avoid any potential repercussions.
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