Medicare Part D, which covers prescription drugs, involves specific reporting responsibilities for employers sponsoring group health plans. It’s crucial for these employers, whether their plans are insured or self-insured, to understand and adhere to the requirements set by the Centers for Medicare and Medicaid Services (CMS) regarding the creditable coverage status of their prescription drug plans. This blog serves as a reminder of these obligations and the upcoming deadlines.
What is Creditable Coverage?
Creditable coverage, in the context of Medicare Part D, refers to a prescription drug plan that is expected to pay, on average, at least as much as Medicare’s standard prescription drug coverage. Determining whether a plan is creditable is essential as it impacts an individual’s enrollment in Medicare Part D.
Reporting to CMS
Employers must report the creditability of their prescription drug plans to CMS. This is done through the CMS’s online reporting system, which can be accessed here: CMS Creditable Coverage Disclosure Form.
Key Deadlines for Employers
Employers need to be aware of three critical deadlines for reporting:
- Within 60 Days After the Beginning Date of Each Plan Year: This is the primary reporting deadline. For instance, if the plan year begins on January 1st, the employer must complete the reporting by the end of February.
- Within 30 Days After the Termination of the Prescription Drug Plan: If the prescription drug plan is terminated at any point in the year, employers have 30 days from the termination date to report this change to CMS.
- Within 30 Days After Any Change in the Creditable Coverage Status: If there are any changes in the plan’s status as creditable or non-creditable, employers must report this to CMS within 30 days of the change.
Example for Calendar Year Plans
For employers with plans operating on a calendar year (January 1 – December 31, 2024), the deadline for the annual reporting is Wednesday, February 29, 2024. It’s imperative to mark this date in the calendar and ensure that the reporting is completed on time to avoid any compliance issues.
Importance of Compliance
Failing to comply with these reporting requirements can lead to complications for both the employer and employees. It’s important for employers to:
- Understand their Plan’s Status: Know whether the plan is creditable or non-creditable.
- Communicate with Employees: Inform employees about the creditable coverage status of the prescription drug plan, as it affects their Medicare Part D decisions.
- Meet Reporting Deadlines: Ensure that all reporting is done accurately and within the specified time frames.
As we approach the reporting deadlines for 2024, employers should take proactive steps to assess their prescription drug plans and complete the necessary reporting to CMS. This is not just a regulatory requirement but a crucial component of managing employee benefits responsibly. Staying informed and compliant benefits both the employer and the employees, ensuring smooth operation of the prescription drug benefits and adherence to Medicare rules.