The Employer's Role in Medicare Part DHR Resource
October 16, 2012 — 1,676 views
The Employer's Role in Medicare Part D
Medicare Part D, the portion of Medicare which provides prescription drug coverage, places a specific duty on employers who offer prescription drug coverage. The obligation requires employers who provide drug coverage as part of their medical benefits package to inform all Medicare-eligible beneficiaries, including retirees, COBRA recipients, and dependents, as to whether their coverage is considered creditable or non-creditable. In order for coverage to be deemed creditable, it must be at least as good as the standard Medicare Part D prescription benefit. Employers who are uncertain as to whether or not their coverage is considered creditable should consult the test provided by the Centers for Medicare and Medicaid Services (CMS). The CMS test for creditable coverage compliance includes a number of standards that the plan must meet to be considered creditable. Employers that offer more than one drug plan option must make the necessary determination and provide the proper notice for each plan offered. Additionally, CMS provides a model notice that employers can fill information specific to their company and plan and use.
Because Medicare Part D open enrollment is held annually, from October 15th until December 7th, the required creditable coverage disclosure should be provided to all eligible beneficiaries by October 14th of each year. Employers should also provide the notice upon commencement of a new drug plan and also make it available a beneficiary's request. Although the notice is only required to be given to Medicare-eligible beneficiaries, for ease of distribution employers may choose to provide the notice to all plan participants. One notice is sufficient for the employee and their dependents, unless the employer knows that the dependent resides at a different address. The notice may be distributed electronically with proper beneficiary consent.
In additional to providing the creditable coverage disclosure to plan participants, employers must all see that this information is properly reported to CMS to ensure compliance.
The purpose of the creditable coverage disclosure is to inform employees whether or not their coverage is considered creditable for Medicare purposes. This is important to Medicare-eligible employees because those who do not maintain creditable coverage after their initial Medicare eligibility date will be required to pay a penalty when they later enroll in Medicare. Those who maintain creditable coverage will not be penalized when they eventually enroll.
Finally, Medicare-eligible beneficiaries should receive information directly from the Government, including the "Medicare & You Handbook," which should address additional questions that they may have.