Employers Must Provide Creditable Coverage Notices for Health Plans Before October 15

Who must comply:

Employers that sponsor a group health plan that covers prescription drugs.

Deadline to comply: Prior to October 15 of each year. “Prior to” means any time in the 12 months preceding October 15.

Note: If the notice was issued in the employer’s open enrollment materials in the past 12 months, there’s no need to resend during this time of year.

What must employers do? Customize the Notice of Creditable (or Non-Creditable) Coverage and distribute to Medicare-eligible individuals enrolled in or eligible for the medical/Rx plan. Best Practice is to send it to every employee.

The model notices should be customized for your employees.

• Employers typically do not know if a dependent is eligible for Medicare due to disability or end-stage renal disease; therefore, it is recommended to provide the notice to all eligible employees.
• An employer is only required to provide one Notice of Creditable Coverage per household even if more than one member of the household is covered by the group health plan and eligible for Medicare.
• Delivery Methods: Electronic distribution may be permissible as outlined in more detail below. If electronic delivery is not an option, employers may also distribute via the following methods: hand delivery, mail, and it can be distributed with the Summary Plan Description (SPD) or other enrollment materials if its significance is sufficiently conveyed to recipients.

The October 15 deadline applies for all group health plan sponsors that offer prescription drug benefits, regardless of plan year, plan size, employer size, or whether the plan is insured or self-funded.

Electronic Distribution:

Employers can distribute these notices electronically to participants who can access electronic documents at their regular place of work as long as those participants have access to the electronic information system on a daily basis as part of their work duties. Employers can distribute electronically under these circumstances without the participant’s consent. Participants must be informed, however, that they are responsible for providing a copy of the electronic notice to their Medicare-eligible dependents covered under the group health plan.

Employers are also required to notify CMS online annually that they have sent out these Part D notices. The notice to CMS is due within 60 days after the start of the employer’s plan year.

If you offer health insurance to your employees, your insurance broker can assist you with Medicare Part D notices.