EMPLOYEE BENEFITS ALERT – CREDITABLE COVERAGE
Employers Must Comply with Medicare Notice Requirements
October 6, 2008
A_Medicare D_Employer_1008.doc
Page 1 of 2
Notice A
RE: Pharmacy Plan «CAR»-«PLAN»
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 added a new voluntary
prescription drug benefit (Part D) to the Medicare program, and “Part D eligible individuals” can enroll in
this new prescription drug benefit. As a group health plan policyholder that provides prescription drug
coverage to eligible individuals, you are subject to certain mandates as a result of this law. We want to
share the following information to help you understand your responsibilities and prepare.
Annual notice requirement to CMS – All employers who offer group health plans providing prescription
drug coverage are required to notify the Centers for Medicare & Medicaid (CMS) annually regarding the
creditability of their prescription drug coverage. (See “What is creditable prescription drug coverage?”
below.)
Annual disclosure notice requirement – All employers who offer group health plans with prescription
drug coverage must provide an annual disclosure notice to “Part D eligible individuals” each year by
November 15. It is difficult to identify all employees and dependents enrolled in Medicare due to age,
disability, or ESRD. Therefore, we recommend that you provide the disclosure notice to all covered
individuals to ensure compliance. (This includes covered dependents and retirees.) PacificSource benefit
books and proposal summaries include Medicare Part D information.
What is the purpose of the disclosure notice? – “Part D eligible individuals” have the opportunity to
receive Medicare prescription drug coverage. They also have the option of delaying enrollment in
Medicare Part D without penalty if they are covered under a group health plan that provides creditable
prescription drug coverage. “Part D eligible individuals” must enroll during their initial enrollment