Creditable Coverage Disclosure to Centers for Medicare and Medicaid (CMS) and to Medicare-eligible Employees or Retirees

If you are an employer that sponsors a group health plan that offers a prescription drug plan to Medicare-eligible employees or retirees, the Centers for Medicare & Medicaid Services (CMS) requires that you disclose to the CMS and to Medicare-eligible policyholders whether the prescription drug coverage offered is creditable or non-creditable to Medicare Part D prescription drug coverage.

Under the CMS rules, employers that sponsor group health plans must take the following actions each year:

1. You must determine if your prescription drug plan provides coverage that is considered ‘creditable’ to Medicare Part D prescription drug coverage. HCSC will not notify CMS of the client's Creditable Coverage status. Instead, a Creditable Coverage letter has been posted in the secure Blue Access for Employers (BAE) and Blue Access for Producers^SM (BAP) portals, to assist you in determining your creditable coverage status. Employers can access the letter by logging in to BAE and clicking on “News and Updates.”
2. You must communicate your plan's creditable or non-creditable status by October 15, 2011, to the following people covered under your group's prescription drug plan:
   • Medicare-eligible, actively working individuals and their dependents;
   • Medicare-eligible COBRA individuals and their dependents;
   • Medicare-eligible disabled individuals
   • Any other Medicare-eligible retirees and their dependents
3. The Medicare Prescription Drug, Improvement, and Modernization Act (MMA)requires that sponsors of group health plans - including employers, unions, churches, federal, state and local governments, among others - disclose creditability status to CMS. This requirement also applies to governmental-sponsored plans (e.g., Medicaid, state high risk pools, etc), military coverage (e.g., Veterans Administration, TRICARE, etc.), individual coverage and Medigap plans, among others.
   • Within 60 days after the beginning of the plan year for which the entity is providing the disclosure to CMS for plan years ending in 2007 and beyond;
   • Within 30 days after the termination of the prescription drug plan; and
   • Within 30 days after any change in the creditable coverage status of the prescription drug plan.

Disclosure must be made electronically via the Disclosure Notice form on the CMS Creditable Coverage webpage. 

Plan sponsors that have applied for and anticipate receiving payment for the retiree drug subsidy (RDS) are not required to make this disclosure to CMS.

The current CMS disclosure guidance is posted on the CMS website.  Helpful hints also can be found under the title "Disclosure to CMS Guidance and Instructions" on the Web site.

The information is this article should not be construed as legal advice or as a legal opinion on any specific facts or circumstances, and is not intended to replace advice of independent legal counsel.