Companies that sponsor a prescription drug plan are required to distribute a form called the Medicare Part D Notice each year. This notice is required to be distributed to individuals that are eligible for Medicare Part D and informs those eligible for Medicare Part D whether the prescription drug coverage their group health plan offers is creditable or noncreditable. This requirement has been in place since 2006 when prescription drug coverage became available as part of the Medicare Prescription Drug Improvement and Modernization Act of 2003.
The company that sponsors the health plan may not know which of its participants are eligible for Medicare Part D, so to simplify distribution of the notices, most companies will distribute to all plan participants. The form can be distributed in printed form either through first class mail or by providing a copy of the notice to the employee. It is acceptable for companies to provide the notice in the open enrollment packets distributed to all employees provided it would be received prior to October 15 each year. If the employer knows that a dependent does not reside at the same address as the employee, a separate notice must be sent to the dependent. Some employers include the notice in a new hire packet provided to each employee when employment begins. The notice may also be provided electronically but the Department of Labor (DOL) rules must be followed for electronic disclosure.
Health plan sponsors are also required to report on whether their plan offers prescription drug coverage that is creditable or non-creditable to Centers for Medicare & Medicaid Services (CMS) on an annual basis. This requirement is met through the completion of the Online Disclosure to CMS form. This online disclosure must be completed no later than 60 days from the beginning of the plan year and also within 30 days after a prescription drug plan is terminated or after a prescription drug plan has a change in its creditable coverage status. This disclosure to CMS must be completed regardless of whether the group health plan is primary or secondary to Medicare. The online tool must be used. See Disclosure to CMS tab.