Oct. 14, 2016 marks the deadline for health care plan sponsors offering prescription drug coverage to provide disclosure to eligible Medicare recipients. It's crucial for human resources teams to distribute these notices as soon as they're able. Triton Benefits has a closer look at what this requirement entails:
Notices regarding Medicare Part D benefits should be sent out by Oct. 14. Medicare Part D: What is it?
The Medicare Prescription Drug, Improvement and Modernization Act of 2003 resulted in the biggest changes to the national social insurance program since Medicare was implemented in 1966. The law's biggest alteration was the introduction of tax breaks and subsidies for prescription drugs.
The benefit became known as Medicare Part D and began in 2006. This coverage is voluntary and is available only through insurance companies and health maintenance organizations (HMOs). The initial costs for the option were as follows:
- A minimum monthly premium of $24.80, although this rate varied.
- A annual deductible ranging of $250.
- 25 percent cost-sharing of drug costs between $250 and $2,250.
Once people had met those obligations, they would enter the donut hole, which entitles the enrollee to the insurance company's negotiated cost of the drug – often less than the retail price without healthcare coverage.
Since the Affordable Care Act went into effect in 2010, these costs have changed. "Obamacare" aims to close the donut hole completely, while retaining Medicare Part D's affordability for those enrolled. Now, recipients have access to a discount on covered brand-name drugs when ordered through the mail or bought at a pharmacy, coverage for generic drugs and extra savings on both brand-name and generic prescriptions until the donut hole is closed – ideally in 2020, according to Obamacare Facts. Additionally, those people in the donut hole can receive 50 percent off Part D-covered brand-name prescription.
"Notices should include whether group plans are creditable or not."
The notices
Group health plan sponsors, under the Medicare Prescription Drug, Improvement and Modernization Act of 2003, are obligated to distribute documentation to those people eligible for Part D benefits about whether their plan is considered creditable or non creditable.
To determine this element, the Centers for Medicare and Medicaid Services created a Creditable Coverage Simplified Determination breakdown insurance companies and HMOs can use. In more simple terms, a plan is considered creditable when the prescription drug coverage is equivalent to Medicare's standard Part D insurance and non creditable when it doesn't.
The eligible individuals who will receive these notices tend to be 65 or older or under age 65 and with disabilities. Many are active employees, COBRA participants, retirees and these groups' dependents.
The purpose of these disclosures is to give potential enrollees the information they need to decide whether they should enroll in Medicare Part D during the enrollment period or stay in their current prescription plan. Notices must be sent out before this time frame.
Part D enrollment
Individuals eligible for Medicare Part D can enroll for coverage from Oct. 15 through Dec. 7 every year, according to AARP. People who fail to sign up during their initial enrollment period – and also go 63 consecutive days without creditable Medicare insurance – will most likely have to pay higher premiums. Those who face these increased costs often experience them as a result of dropping their former creditable coverage for Part D benefits or have non-creditable insurance already.
Next steps
Once notices have been distributed and the open enrollment period for Medicare Part D has begun, group health plan sponsors who provide this benefit must also share information regarding their coverage to the CMS. Documentation should be submitted by March 1, 2017 and includes disclosure of whether the plan is creditable or not.
If employees eligible for Medicare Part D have not received the appropriate notice as of yet, they should reach out to their human resources teams for information and assistance.