Each year, Medicare-eligible individuals can take advantage of an open enrollment period running from October 15th through December 7th. Employers that sponsor group health plans must provide a disclosure notice to Medicare-eligible employees prior to the start of the Medicare open enrollment period each year. This year, those notices must be distributed no later than October 14, 2021.
Below is a brief overview of what your organization needs to do to meet this compliance requirement.
General Purpose and Contents of the Notice: Entities that provide prescription drug coverage to Medicare Part D eligible individuals must notify applicable individuals whether the drug coverage they have is creditable or non-creditable. This information can help those ones decide whether they want to join a Medicare drug plan. The U.S. Centers for Medicare & Medicaid Services (CMS) has provided model notices for employers to use for this disclosure.
Who the Notification Should Be Sent To: Employers are required to send out notices to all Medicare Part D eligible individuals who are applying for, or are covered by, the employer’s prescription drug benefits plan.
An individual may become eligible for Medicare for a variety of reasons, including age or disability. Additionally, an employee's spouse or dependent may be eligible for Medicare. It might be difficult, therefore, for an employer to identify individuals who are eligible. Thus, it is generally recommended that employers send the notice to all individuals eligible to participate in the employer's plan.
Traditional Methods of Distributing the Notice: The CMS has stated that plan sponsors have flexibility in the form and manner of how they provide the Disclosure Notices to applicable individuals. The notice does not need to be sent as a separate mailing. The Disclosure Notice may be provided with other plan participant information materials, including enrollment and/or renewal materials. Per the CMS, if entities choose to incorporate disclosures with other plan participant information, the disclosure must be prominent and conspicuous. Please review the CMS’ website for specific details regarding this requirement.
Of course, if the notice will be included with other plan materials, it’s important to ensure that that the notice is distributed prior to the annual October deadline.
Electronic Notification Requirements: Per the CMS, the notice may be distributed electronically if certain conditions are met. For instance, employers may provide the notice to plan participants via a work email address if the participant has email access at their regular place of work on a daily basis. The email should include the following items:
A statement indicating the significance of the document
Details regarding how individuals can obtain a paper version of the notice
A statement that the participant is responsible for providing a copy of the notice to their dependents that are covered under the group plan and eligible for Medicare.
Please be sure to review the CMS’ website for additional guidelines regarding electronic notification requirements.
Additional Requirements: Please note that there are additional times throughout the year when an employer may need to take action to comply with Medicare-related requirements. For example, a disclosure must be completed annually on the CMS website. Plan sponsors generally must disclose creditable coverage status to CMS within 60 days after the beginning of each plan year.
This is not intended to be exhaustive nor should any discussion or opinions be construed as legal or tax advice. Readers should contact their legal counsel and/or tax advisor for guidance.
The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.