Medicare Part D > AKT Benefit Advisors

The Medicare Modernization Act (MMA) mandates that companies offering prescription drug coverage disclose to all Medicare eligible individuals with prescription drug coverage under the plan whether such coverage is "creditable." This information is essential to an individual's decision whether to enroll in a Medicare Part D prescription drug plan.

Businesses offering prescription drug plans to Medicare eligible individuals, are required to:

Determine if the plan provides "creditable coverage."
Inform Medicare of the creditable or non-creditable status of their plan.
Communicate the creditable or non-creditable status of the plan to Part D eligible individuals annually; no later than November 15th.

When should employees be notified?

All employers who offer a prescription drug plan as part of their health insurance benefits are sent a notice from their insurance carriers stating whether or not their drug plan is "Medicare Compliant." This means that their prescription drug plan is as good as or better than the minimum benefit required by Medicare. This notice must given to every Medicare eligible employee and employees who have Medicare eligible dependents. If an employer is unsure of the Medicare eligibility status of employees and their dependents, AKT Benefit Advisors recommends that employers provide notices to all employees.

Notice must be given to employees:

When benefits are changed at renewal
If an employer changes health insurance companies or discontinues prescription drug coverage
At the time of an employee's retirement
Upon request from an employee
Prior to the Medicare Part D Annual Coordinated Election Period (AEP) beginning November 15th through December 31st of each year.

How do employers satisfy the requirement to notify The Centers for Medicare and Medicaid Services (CMS)?

Employers providing prescription drug coverage to Part D-eligible individuals are required to disclose to Medicare whether the coverage is creditable. Employers must provide the information regarding their plan to CMS by going to the CMS web site and completing a brief online form:

Within 60 days after the first day of each plan year. (For example, if an employer's plan year begins January 1, 2009 CMS must be notified by March 1, 2009.)
Within 30 days of termination of the prescription drug plan.
Within 30 days of any change in the creditable coverage status of the prescription drug plan.