Medicare Part D Creditable Coverage Disclosure to CMS

For employers offering prescription drug coverage to Medicare-eligible employees or retirees, maintaining compliance with Medicare Part D regulations is crucial. One of the key responsibilities is submitting the Medicare Part D Creditable Coverage Disclosure to the Centers for Medicare & Medicaid Services (“CMS”).

In this blog, we’ll explore what this disclosure is, why it matters, and the steps employers need to take to stay compliant.

What is Medicare Part D Creditable Coverage Disclosure?

The Medicare Part D Creditable Coverage Disclosure is an annual requirement for employers offering prescription drug coverage to Medicare-eligible individuals. The disclosure informs CMS whether the prescription drug coverage you provide is creditable or non-creditable.

• Creditable Coverage means that your prescription drug plan is expected to pay as much as or more than the standard Medicare Part D plan.
• Non-Creditable Coverage means that the coverage pays less than the Medicare standard.

This information is crucial because it helps Medicare-eligible individuals, such as employees or retirees, make informed decisions about whether to keep their employer-provided coverage or enroll in a Medicare Part D plan. It also helps avoid late enrollment penalties for those who delay Medicare Part D enrollment without having creditable coverage.

Why Is This Disclosure Important?

As an employer, the CMS disclosure requirement serves two important purposes:

• Compliance: Federal law mandates that employers report whether their prescription drug plans are creditable or non-creditable. Failing to do so can lead to compliance issues and potential audits.
• Protecting Employees: Employees without creditable coverage may face a lifetime late enrollment penalty if they choose to delay enrolling in Medicare Part D. By properly disclosing to CMS and notifying employees, you help protect them from these penalties and give them the information they need to make timely decisions.

When Must Employers Submit the Disclosure?

Employers must submit the Medicare Part D Creditable Coverage Disclosure at specific times:

• Annually: The disclosure must be submitted within 60 days of the start of your plan year.
• Within 60 Days of a Change: If the status of your prescription drug coverage changes from creditable to non-creditable (or vice versa), you must submit a new disclosure to CMS within 60 days of the change.
• Upon Request: CMS may request the disclosure information at any time, so it’s important to keep your records up to date.

How to Submit the CMS Disclosure

Submitting your Medicare Part D disclosure is a straightforward process but must be done carefully to avoid errors. Here’s a step-by-step breakdown of the submission process:

• Determine Coverage Status: First, you need to evaluate whether your plan is creditable or non-creditable. You can do this by reviewing the guidelines provided by CMS. If you use Wisterm as your benefits consultant, we will work directly with your third-party administrator (“TPA”) or insurance carrier to help determine if your coverage is creditable.
• Access the CMS Disclosure Form: Submissions must be made electronically. Visit the CMS Creditable Coverage Disclosure Form to access the online form.
• Complete the Disclosure Form: You’ll need to provide details about your plan sponsor (your company), the plan year, and whether your prescription drug coverage is creditable or non-creditable.
• Submit the Form: After verifying the accuracy of your information, submit the form online. Be sure to keep a confirmation of your submission for your records.
• Maintain Records: Keep a copy of your submission and any supporting documentation, such as how you determined your plan’s status. This will protect your organization in case of an audit or if there are any questions about your coverage.

Resources to Help You Stay Compliant

Navigating the Medicare Part D disclosure process doesn’t have to be overwhelming. CMS provides helpful resources to guide you:

• CMS Creditable Coverage Guidance: For detailed instructions on determining whether your plan is creditable, visit CMS’s Creditable Coverage Guidance.
• CMS Disclosure Form: Access the form and instructions directly at the CMS Disclosure Website.

Final Thoughts

Submitting the Medicare Part D Creditable Coverage Disclosure to CMS is an essential part of employer compliance with Medicare regulations. By determining whether your plan is creditable, submitting your disclosure on time, and keeping thorough records, you can avoid compliance issues and help your Medicare-eligible employees make informed decisions.